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.
11:20 am
The Agriculture Index advanced above the combination 50-day and Intermediate support lines today. This action gives a long-awaited confirmed buy signal. For the past three months, the Cycles Model has suggested an accumulation period before taking off to new heights. The near-term targets may be the Cycle Top at 406.06, then the neckline of the Head and Shoulders formation, approaching 425.00.
11:06 am
The Banking Index has also crossed beneath its Ending Diagonal, offering a sell signal. The Master Cycle high was made last Friday, at 131.43. The Cycles Model allows the BKX to decline to the first week of June. The Head & Shoulders target may come into view during that time.
10:55 am
SPX has broken through the lower trendline of the Ending Diagonal formation, offering a possible sell signal. Close-by supports are at 5895.00 and 5850.00, should you care to use them instead of the ED formation as a sell signal. Additional weakness may be due in the next few days.
8:00 am
Good Morning!
SPX futures dipped to 5887.50 this morning as it leaves Monday’s Master Cycle high behind. It’s time to take upside profits while SPX remains in a throw-over above the Ending Diagonal formation at 58850.00, beneath which an aggressive sell signal may be found. The mid-Cycle support at 5792.11 may confirm the sell signal. The Cycles Model anticipates a decline to mid-June with a potential low beneath the April 7 low at 4835.04.
Today’s options chain shows Max Pain at 5930.00. Long gamma rises above 5950.00 while short gamma resides beneath 5900.00 with a huge put wall at 5875.00.
ZeroHedge reports, “US equity futures and global markets are weaker with both tech and small caps underperforming as yields rise (10Y TSY at 4.53% last) and the curve bear steepens. As of 8:00am ET, S&P futures are down 0.5% with sentiment hit by a CNN report that Israel may be preparing to strike Iranian nuclear facilities. That sent oil higher, while haven assets outperformed; Nasdaq futures also drop 0.6%, with Mag7 names mostly lower and Semis/Cyclicals underperforming. In Europe major markets are mostly lower with the UK leading and France lagging. UK inflation his a 15-month high. Treasury yields ticked above key psychological levels, with the 30-year above 5%. The dollar lost ground against all major currencies pushing the DXY index back below 100 as the yen continues its relentless ascent while Japanese long bonds crater. Commodities are higher this morning, benefiting from the lower dollar and led higher by energy and precious metals with the former higher on elevated geopolitical risk. Oil climbed about 0.7% on a report that Israel could be gearing up for a possible strike on Iran’s nuclear facilities. It is another light macro data day with no macro news but with multiple Fed speakers. Earnings from big retailers will be in focus for clues on the impact of tariffs.”
VIX futures rose to 20.08 this morning, potentially offering a buy signal above the mid-Cycle resistance at 19.20. The Master Cycle low was made on Friday. The VIX may not remain near its “floor” as it offers another potential day of strength off the low. VIX may recognize the 30-year bond is above 5% again, where larger moves are anticipated.
TNX futures rose to 45.48 this morning, as it resumes its upward trend, challenging the Cycle Top resistance at 48.13. Today’s 20-year Treasury auction is on tap for some possible fireworks with a follow-up of the 10-year auction on Friday. The Cycles Model anticipates a panic rally in yields lasting to early June.
ZeroHedge observes, “Late last week, the Joint Committee on Taxation (JCT) released its preliminary score of the House Ways and Means Committee mark-up of the large budget reconciliation bill working its way through Congress, also known as Trump’s “Big, Beautiful Bill” (BBB). And while the BBB is inching to passing through Congress – despite holdouts still remaining especially over the size of the SALT deduction – here is a snapshot of what is in the Bill, and how it will affect the US in the coming decade.”
Bitcoin rose to 108040.51 before easing back. It has not exceeded the January high. Failure to do so signals a potential decline ahead that may shake up the Crypto sector.
USD futures declined to 99.27 this morning, just above the Cycle Bottom support at 98.23. Should it bounce at support, we may see an uptrend developing. Currently, the USD is considered a short candidate.
Japanese Yen futures rose to 69.69 this morning as it continues its rally toward the Cycle Top at 71.19 and possibly beyond. It is on a doubly confirmed buy signal that may last to the first week of June. Should the Yen slip back beneath Intermediate support at 69.17, an alternate route (decline) may be taken. The BOJ is in a quandary whether to raise rates, thereby strengthening the Yen or let things take their course and postpone the inevitable collapse. The Yen carry trade is at risk.
Gold futures rose to test the Cycle Top and trendline resistance at 3322.07 this morning. Having tested its strength against resistance and finding it wanting, it is likely to reverse course today. It remains on a sell signal that may obtain additional confirmation beneath Intermediate support at 3248.72 and the 50-day Moving Average at 3166.43. The decline may continue to mid-July. Nearby support lies near 2600.00. However, should a panic ensue, supports may be found at 1900.00 and 1600.00.
Crude oil futures rose to 64.13 this morning, emerging above the 50-day Moving Average and confirming the buy signal made at the Intermediate support/resistance at 61.76. There is approximately a week left in the current Master Cycle, allowing crude to rise to the mid-Cycle resistance at 69.09 and possibly higher should war intensify in the Middle East.
ZeroHedge observes, “Oil prices are modestly higher ahead of this morning’s official energy inventory and supply data, but have come dramatically back off the overnight spike highs driven by CNN headlines suggesting Israel is ready to strike Iranian nuclear enrichment sites.
“Either the impact on the oil market in case of an attack is assumed to be low, or the probability for an attack is assumed to be low,” said Bjarne Schieldrop, chief commodities analyst at SEB AB.
Wednesday’s gain “is not much when we are talking bombs in the Middle East major oil producing region.””