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.
10:06 am
The Ag Index declined beneath its April low, leaving two more weeks of potential decline. Possible targets at the trendline near 360.00 and the Cycle Bottom support currently at 352.85. Food offers a potential long-term gain that cannot be ignored. The present situation offers a promising accumulation phase for the next two weeks. DBA is an agricultural ETF.
ZeroHedge warns, “In a plot that reads like a Tom Clancy novel crossed with a dystopian agribusiness nightmare, two Chinese nationals, Yunqing Jian, 33, and Zunyong Liu, 34, have been slapped with federal charges for allegedly smuggling a biological ticking time bomb into the U.S.
The weapon? Fusarium graminearum, a fungus dubbed a “potential agroterrorism weapon” by scientific literature, capable of wreaking havoc on America’s wheat, barley, maize, and rice crops while poisoning humans and livestock with its toxic byproducts.”
7:45 am
Good Morning!
SPX futures rose to 5987.30 this morning, on its way to a test of 6006.00, where short buying began at the end of March as SPX cascaded beneath the 50-day Moving Average, prompting massive hedging/shorting. Once the short covering is complete, market liquidity runs thin. The Cycles Model suggests a reversal is possible within the next week.
The Fractal similarity guideline suggests a possible high nearby at 6020.00. These are simply guidelines. SPX may go higher, possibly 6050.00 in a final exhaustion probe. In any event, this week offers the last opportunity to squeeze the shorts. Keep in mind that more than 50% of the buying in the past week came from short covering.
Today’s options chain shows Max Pain near 5950.00. Long gamma may begin near 5975.00 while short gamma lies beneath 5900.00.
ZeroHedge reports, “US equity futures are higher, following European and Asian markets, while the MSCI All-country world index surpassed the February record high: as if April never happened. As of 8:00am, S&P futures are up 0.2%, trading just shy of 6,000 and on the verge of a 20% bull market rebound from the April low even with some negative trade developments overnight: Trump said that China’s Xi is very tough to make a deal with, and signed an order to raise steel and aluminum tariffs to 50% from 25%. Nasdaq 100 futures are up roughly the same, with Mag 7 names mostly higher premarket led by NVDA (+0.9%) and TSLA (+0.8%). Bond yields and USD are flat; Commodities are mostly unchanged as well, although Ags are higher and gold dips. Trump says Xi is “extremely hard” to make a deal with (here); the White House said that they are expecting a Trump-Xi call this week. The 50% steel tariffs will take effect today; key macro data to watch are May ADP employment change (8:15am), S&P Global US services PMI (9:45am) and ISM services index (10am).”
VIX futures are testing the lower trendline at 17.41 this morning. The rising trendline may act as a floor for the VIX. The Cycles Model suggests that a Master Cycle low may be made ant any time in the next week.
USD futures rose to 99.39 after making its Probable Master Cycle low at 98.58. The USD is now neutral. Tomorrow may offer a burst of strength to rise above Intermediate resistance at 99.76. A buy signal may await that event.
TNX futures ;declined to 43.95 thus far this morning, possibly testing its Master Cycle low at 43.94. Lower targets include the 50-day Moving Average at 43.48 and the mid-Cycle support at 43.01.
ZeroHedge remarks, “Back on April 14 when bond yields were soaring in the aftermath of Trump’s liberation day amid speculation that China or Japan were selling some of their US paper to stabilize their currency, a selloff which was compounded by the concurrent unwind of the massive $2 trillion basis trade, Treasury Secretary Steve Bessent appeared on Bloomberg TV to ease fears of a wholesale unwind of the US bond market. In the interview, among other things, Bessent revealed that he has breakfast with Powell every week, and also said that if the Fed does nothing, he might take matters in his own hands, and since the Treasury has a “big toolkit” one of the things it could do is “up the Treasury buybacks” (to prop up Treasuries, in lieu of QE).”
Japanese Yen futures are consolidating above the 50-day Moving average. Today may be a day of trending strength which may assist it to the Cycle Top resistance at 71.25. The rising Yen places the Yen carry trade at risk, since the low rate offered by the Bank of Japan is more than offset by the rising cost of the principal payment.
Gold futures rose to 3396.92 this morning, making a new high. The potential target may be 3440.00 in a flat correction. This is sure to bring in more investors thinking that new highs may be made. However, the Cycles Model suggests the decline may resume in a matter of days, as the euphoria wears off.
Crude oil futures are making new highs above the 50-day Moving Average at 63.09+. The Cycles Model infers that crude oil may continue its rise to mid-July.
Bitcoin remains above rising Intermediate support at 104083.00. Its possible target may be the trendline and 50-day Moving Average at 99890.00 followed by a bounce.