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.
8:00 am
Good Morning!
SPX futures have been trading in a narrow trading range during the overnight session. A sell signal has been made. The nearest support is Intermediate support at 5868.24. The mid-Cycle support lies at 5830.12 and the 50-day Moving average lies at 5680.89. Alarms may not be raised until the SPX declines beneath the 50-day. This week’s Cycles show a steady erosion. Next week shows the decline gaining momentum, with some fireworks around the holiday.
Today’s options chain shows Max Pain at 6000.00. Long gamma may begin above 6035.00 while short gamma resides beneath 5975.00.
ZeroHedge reports, “US equity futures are modestly higher into Fed Day, bucking the trend of lower Asian and European markets, as the market shrugs off geopolitics after the US did not join Israel in bombing Iran and the dip buyers return. As of 8:15am, S&P futures are up 0.1% and Nasdaq 100 futs rise 0.2% even as global equities trade mostly in the red following the 6th day of strikes between Isreal/Iran. Pre-mkt, Mag7/Semis are outperforming; cyclicals poised for a strong day as Financials get a boost from de-reg after Bloomberg reported that regulators plan to reduce a key capital buffer for big lenders to ease constraints over trading in the Treasuries market. Sweden’s Riksbank cut rates by 25bps (expected) while UK CPI was mostly in-line ahead of BoE rate decision tomorrow…FTSE flat/DAX -30bps/CAC -10bps/ Shanghai +4bps/Hang Seng -1.12%/Nikkei +90bps. Overnight, Trump called for Iran’s unconditional surrender/Iran said they will not accept an imposed peace or war and that they will respond “very seriously”/Iran said to be preparing missiles for possible retaliatory strikes on US Bases/worries about the straight of Hormuz where 20% of world seaborne-trade oil supply travels through daily/US announced a meeting on Weds with Pakistan’s army head to discuss mediation. Otherwise, all eyes on FOMC and the dotplot (economists expects them to remain on hold until further clarity about policy/tariff/economic outlook). Treasury yields are lower, the USD weaker, and commodities seeing profit-taking. While the Fed is the focal point of today’s macro data, keep an eye on initial claims and an update to the trend. TIC data at 4pm will show (lagged) foreign ownership of Treasuries. Focus is also on whether the US is planning to get directly involved in the Middle East conflict.”
VIX futures pulled back to 20.50 this morning. It is currently building support at the mid-Cycle marker at 19.81. The next phase of the uptrend may be to overcome the 50-day Moving Average at 24.04, where recognition of a change in trend may occur. Panis may set in toward the end of the last week of June, with an all-out spike around the 4th of July weekend.
The Monthly VIX options expire today with no untoward movement. The June 25 options chain shows Max Pain at 19.00. Short gamma resides between 16.00 and 18.00. Long gamma may begin at 20.00 and remains strong to 30.00.
TNX has tested the 50-day Moving Average at 43.62 this morning. It may already have reversed and may be due to cross above Intermediate resistance at 44.28, where a buy signal may be confirmed. The Cycles Mode allows three more weeks of rally with momentum rising through the end of the month. The FOMC concludes its meeting today with a press release at 2:00 pm. No surprises are expected.
US dollar futures are consolidating in the middle of the move higher. The combined resistance 99.55 may initially repel the advance, but once overcome, a buy signal may be confirmed. Literally everyone is short the USD. Recognition of the change in trend may bring on a huge short squeeze.
The Japanese Yen has risen from yesterday’s low at 68.76 and may be resuming its uptrend. The June 11 Master Cycle low was at 68.74, leaving a double bottom . Trending strength is gaining and a rally above the 50-day Moving Average rfenews the buy signal. This clears the way for a strong rally to mid-July. It is likely that the lip of the Cup with Handle formation may be exceeded. What is unique about thsi move is that some investors are beginning to look at the Yen as a safe haven, as opposed to the USD. This is attracting buyers while some very large hedge funds are shorting the Yen as a source of cheap liquidity. It is possible that these hedge funds may go belly up in the event of a strong rise in the yen.
Crude oil futures are consolidating after resuming their uptrend. The price has exceeded the April 2 high at 72.28 and is likely to exceed its Cycle Top at 77.81 by mid-July. There is no well-defined target yet, although the 2023 high at 92.48 is possible..