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.
12:05 pm
The Banking Index has found support at the mid-Cycle line at 125.22 thus far. A decline beneath it triggers a second sell signal that shoud be taken seriously. Rising rates may begin to play havoc on bank balance sheets, causing a potential liquidity crisis. Once begun, the crisis may extend to early-mid July.
7:45 am
Good Morning!
SPX futures declined to 5857.10, crossing into the sell zone beneath 5875.00. Further confirmation lies beneath Friday’s low at 5843.66. The mid-Cycle support is at 5802.00 beneath which the decline may pick up momentum. The Cycles Model suggests the decline may last another two weeks. News from the Ukraine provokes further concern about the markets.
Today’s options chain shows Max Pain at 5890.00. Long gamma may begin above 5900.00 while short gamma lies beneath 5850.00.
VIX futures spiked to 20,45 yesterday at the news from the Ukraine. The excitement has eased a bit as the markets await a response from the White House. The VIX ix due for an imminent burst of trending strength.
ZeroHedge remarks, “Ukraine carried out strategic drone strikes on Sunday against several bases all across Russia that are known to house elements of its nuclear triad. This came a day before the second round of the newly resumed Russian-Ukrainian talks in Istanbul and less than a week after Trump warned Putin that “bad things..REALLY BAD” might soon happen to Russia. It therefore can’t be ruled out that he knew about this and might have even discreetly signaled his approval in order to “force Russia into peace”.”
Gold futures spiked to a weekend high at 3385.11 before calming somewhat. The Cycles Model had anticipated a strong move today. Additional volatility may come later this week.
ZeroHedge observes, “Gold is back flirting with the short term negative trend line. The bounces on the 50 day and the long term trend were once again schoolbook examples of buying dips in strong trends. A “proper” close above the $3350 and gold risks going squeezy again.”
The USD futures made a low at 98.61 this weekend. The double bottom may find resolution as the Cycles Model allows two more weeks to completion. Support is found at the Cycle Bottom at 97.92. Should it remain above it, the Master Cycle may end much higher, to the chagrin of the short sellers.
TNX is rising from its Master Cycle low on Friday. The Cycles Model calls for rising rates for the next six weeks. Unknown to many analysts, war is very inflationary. The Cycle Top at 48.15 is the first of several targets.
RealInvestmentAdvice comments, “Some bearish bond investors in Japan and the US appear to believe that a paradigm shift is underway in the sovereign bond markets. To wit, consider the following statement from Jim Bianco on Thoughtful Money: “If these deficits are really going to kick in and cause problems, these rates are going to go much higher than this.” The bond market paradigm shift we observe is that some people believe the governments and central banks of the largest nations are no longer managing interest rates. For those who believe in this paradigm shift, we ask a simple question: Why Would They Stop Now?”