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.
7:30 am
SPX futures traded in a very narrow range…between 5939.00 and 5900.00. SPX has lost momentum beneath 6000.00, despite hedge fund leverage nearing the 99th percentile. Valuations are at 21X earnings, leaving little upside potential. After six weeks of rally, commercials are about to turn into sellers. So, with investors all in, upside potential may be limited, while the downside may be looming. The Cycles Model calls for a possible 2-week decline straight ahead. Should the powers that be resist the urge to sell, then the SPX may stay range-bound for the next two weeks.
Today’s options chain shows Max Pain at 5925.00 Long gamma may rise above 5950 while short gamma lurks beneath 5915.00.
ZeroHedge reports, “US equity futures follow European markets lower, although off session lows, amid more tariff gloom confronting traders this morning: the pressure of Trump’s tariffs pushed China’s manufacturing PMI survey to its lowest since 2022, while the OECD cut its 2025growth outlook for a second time. As of 8:00am, S&P futures are down 0.2%, erasing almost a 0.7% drop as the US benchmark is set to continue a run of daily swings between gains and losses; Nasdaq 100 futures were flat even as all Mag 7 are modestly lower premarket (AMZN/META -0.4%). Meanwhile, the OECD slashed its global economic forecast again, blaming trade anxiety for holding back investment and warning that protectionism is inflationary (which it clearly isn’t judging by recent inflation prints). The OECD now expects 2025 and 2026 US GDP to print 1.6% and 1.5%, respectively; this is below the G20 average of 2.9% and 2.9% in 2025 and 2026, respectively. Bond yields are 2-3bp lower; the USD is stronger. Commodities are mixed with oil moving higher and precious metals lower. Overnight headlines are mostly muted. Today’s US economic data includes April factory orders and JOLTS job openings (10am). ”
VIX futures also remains range-bound within yesterdays highs and lows. The Cycles Model suggests a possible surge in strength starting today and lasting through the end of next week. VIX shows the invers of the SPX. There is limited downside, bu unlimited upside.
TNX futures rose to 44.34 in the overnight session, but has pulled back from yesterday’s high. The Master Cycle low may have been made on Friday. Since then it has remained above the 50-day Moving Average at 43.44, suggesting the buy signal remains intact. Most analysts classify TNX as range-bound. However, the Cycles Model anticipates higher yields, with an initial target at the Cycle Topp at 48.13.
USD futures have made an overnight low at 98.53, but have risen since then. The attempt at a double bottom has left the April 21 low intact, leaving the USD room for a rally lasting up tot two weeks. USD short sellers have piled on, but may provide the fuel for the rally as shorts may have to be covered in a panic rally.
Japanese Yen futures have declined to 69.81 as it pulls back toward supports. The pullback may be strong as it may target the 50-day Moving Average at 68.76 to complete its correction.
Bitcoin futures bounced at Intermediate support at 103670.00 this morning. Should bitcoin decline beneath support, the strength may turn to the downside. Otherwise, Bitcoin may continue its rally through the next two months.
Gold made an overnight high at 3417.45, then drifted down to 3372.93 this morning. There may be resistance near 3440.00 that could stop the retracement. In the meantime, gold is drawing a crowd of investors.
Crude oil has risen above its 50-day Moving Average at 63.16 this morning after making its Master Cycle low on Friday at the Cycle Bottom. The Cycles Model shows strength returning to the rally that may last until mid-July. It is on a buy signal.