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.
8:35 am Note: This blog will be abbreviated due to a medical procedure later today.
Good Morning!
SPX futures rose to 5973.70 this morning before easing back beneath yesterday’s high at 5968.61. I have red-lined the level of the 50-day Moving Average (6006.00) at the end of February as it marks the beginning of the short covering in earnest for that decline. As mentioned last week, this rally is largely due to short covering as new money lags behind, until yesterday. The past six weeks have been painful for the shorts. You may recall that on April 8 I had instructed to take short profits in anticipation of this rally. Since then I have remained neutral, looking for a potential sell signal to develop.
ZeroHedge reports, “US equity futures are weaker with Tech underperforming, threatening a six-day winning streak that propelled the S&P 500 to the brink of a bull market. Then again, Monday started off even worse and then we saw the biggest burst of retail buying on record resulting in one of the biggest intraday reversals in recent history (according to JPM, more here), so brace for more unexpected moves. As of 8:00am ET, S&P futures are down 0.2%, while Nasdaq 100 futs drop 0.3% with Mag7 stocks mixed amid weakness in semis into today’s Google I/O developer conference; healthcare is leading Defensives over Cyclicals. The yield curve is twisting steeper with the 10Y yield flat and USD weakening. Commodities are mixed with crude down, natgas up, base metals down, precious up, and Ags generally higher. Macro data is light, with just the Philly non-mfg PMI on deck ahead of Thursday’s Flash PMIs & Claims prints, but we have another round of Fed speakers where the message continues to be patience.”
VIX futures have been consolidating above the trendline as Friday’s low at 17.15 remains the Master Cycle low. Volatility compression is extreme. It has yet to cross above the mid-Cycle resistance at 19.70 where a buy signal may be found. VIX may have found its “floor” from which the next rally may emerge.
TNX may be bouncing again after a brief pullback. The Master Cycle has two more weeks left to venture toward the Cycle Top at 48.12. A 20-year and 10-year auction will be held in the next two days.
Bitcoin consolidates beneath the Cycle Top resistance at 108760.00 this morning in a somewhat stretched Master Cycle. Once the turn is made, Bitcoin may decline to the end of July.