The Lord’s Prayer
Our Father, who art in heaven, hallowed be thy name. Thy Kingdom come, Thy Will be done, on earth as it is in heaven. Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us. And lead us not into temptation, but deliver us from evil. Amen.
3:37 pm
As SPX completes its second day of throw-over, the room to move becomes narrower. Top-picking is frustrating. Most shorts were made between 5900.00 and 6000.00, just beneath the 50-day Moving Average on February 26 when it was 6006.00. This rally may collapse when the last bear has thrown in the towel.
7:45 am
Good Morning!
SPX futures drifted lower, bottoming out at 5816.60 in the overnight session. Yesterday’s spike rally took the form of a throw-over, having risen above the trendline of the Ending Diagonal. Commercial traders (trend followers) may be buying this week as the SPX has crossed the median pivot level. Short-term support lies at the combined 100-day and mid-Cycle support at 5780.95. The 50-day Moving Average and 1987 trendline are at 5563.20. The Cycles Model suggests the current Master Cycle may have played out, leaving the probability of an imminent decline to mid-June. Ending Diagonals are often completely retraced.
Today’s options chain shows Max Pain at 5795.00. Long gamma may begin above 5800.00 while short gamma may begin beneath 5770.00 and intensifies beneath 5750.00.
ZeroHedge reports, “US equity futures are modestly lower ahead of today’s CPI report, but well off session lows, as markets take a slight pause following yesterday’s surge and as trade war truce euphoria gives way to lingering concerns about inflation and economic growth. As of 8:00am ET, S&P and Nasdaq 100 futures were down 0.2% with Mag7 and Semis names weaker pre-mkt, pulling the index lower. UnitedHealth Group sank 10% in pre-market trading after suspending its 2025 outlook. In the latest trade war news, US reduced the tariff on ‘de minimis’ shipments from China, per Reuters, from 120% to 54%, while China reversed its ban on Boeing jets. Appetite for safer assets picked up again, with Treasury yields falling and gold prices on the rise. The dollar slipped after gaining more than 1.4% yesterday, its strongest day since Nov 6, 2024, the day after the election. Today’s macro data focus is on CPI where the YoY numbers are expected to remain flat MoM despite an acceleration in the MoM prints. Earnings prints are not expected to be market moving today.”
VIX futures are consolidating near yesterday’s low after an exhausted close at the lower trendline. This may be the last bottom-test for quite some time.
Tomorrow’s options chain shows Max Pain at 20.00. Short gamma has a big presence at 18.00 while long gamma begins at 24.00 with a very large presence at 30.00.
TNX is consolidating with a slight slope downward. It may have not yet reacted to this morning’s news of a treasury surplus. The Cycles Model allows three more weeks in the present Master Cycle. This may allow for a pivot lower to the mid-Cycle support at 42.48 or possibly lower, near 40.00. Despite the “good news” from the Treasury Department, tariffs are considered inflationary in the longer term.
ZeroHedge remarks, “Two weeks ago, as part of its quarterly refunding announcement, the Treasury surprised the market when it unveiled a funding need for the current quarter that was $53 billion lower than it had initially forecast in February, and which we said “indicates that DOGE is indeed working and the US funding needs are actually declining.”
Needless to say, for a market that was habituated to Joe Biden’s debt-funded drunken sailor spending ways, the news that the US would needs less – not more – spending than previously expected, came as a shock, and yields slumped as less debt than expected would be required to fund the world’s most indebted government.”
Bitcoin is consolidating beneath yesterday’s Master Cycle high. Should the Master Cycle pivot have been made, an extended decline may be underway.
USD is consolidating between Intermediate support at 100.89 and the 50-day Moving Average at 102.01. The Cycles Model indicates a blast of trending strength may appear once the consolidation is done.. This may be the cause of pain for the USD shorts and add fuel to the rally as they cover.
Gold futures bounced off the Intermediate support at 3219.00 and may be consolidating beneath the Cycle Top resistance at 3287.98. The Cycles Model suggests the decline may strengthen towards the end of the week. A likely downside target in the near term may be the bottom trendline of the upward-sloping trading channel near 2900.00.