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
Note: I am going through radiation treatments for Prostate cancer. This is affecting my schedule for reporting on this website.
Good Morning!
SPX futures made an overnight low at 6209.60 before a bounce back near the flat line. The July 3 high at 6284.65 remains intact as a late Master Cycle high. AS I watch the Japanese and European markets, it is clear that the sources of this surge in stocks were not solely domestic. August is when most wars have begun. This extended Cycle surge may be an advance warning for smart money moving out of the danger zones as threats turn into action. The Cycles Model calls for a downturn until late August, allowing a significant decline. The Model shows a significant burst of energy tomorrow as the FOMC releases its decision.
Today’s options chain shows Max Pain at 6230.00. Long gamma may begin above 6250.00, while short gamma resides beneath 6210.00. This market may have a short fuse.
ZeroHedge reports, “US equity futures rise as Trump leaves the door open for more discussions despite the 14 tariff letters sent yesterday and the extension of the deadline to Aug 1 which is “not 100% firm.” As of 8:15am ET, S&P futures rise 0.1% and Nasdaq futures gain 0.2% after US markets retreated on Monday from ATH on the back of increased tariffs on countries if deals are not reached (Japan/South Korea’s 25% were standouts). Pre-market, Mag7 names are all higher, while industrials are leading cyclicals with financials mixed. 10Y TSY yields are higher by 3bps to 4.41% as the curve bear steepens and the USD is higher after erasing an earlier loss. Commodities are generally weaker although Brent crude has once again rebounded from session lows to trade just shy of $70/bbl. The macro data focus today is on Small Biz Optimism (prints in line with expectations), 1-year Inflation Expectations, and an update on Consumer Credit. ”
VIX futures rose to 118.96 in the overnight market, then declined to 16.95 this morning. This behavior may be indicative of attempts to control the VIX in advance of the FOMC as certain large institutions often make their play in the pre-market in an attempt ot set the tone for the market open.
TNX continues its rise above the 50-day Moving Average at 43.73. Today is day 258 in the Master Cycle. However, it appears that there may be some intense activity in the bond market in the next 24 hours with yields going higher.
ZeroHedge observes, ” Remember Japanese bonds?
Latest 2 day rise in the Japan 30 year is actually bigger than the mid May move everybody got so excited about. 50 day stays very much intact. Let’s see how this plays out, but this is a must watch.”
USD had extended its Master Cycle low to July 1 due to tariff concerns. The rebound from beneath the Cycle Bottom support/resistance gives an aggressive buy signal. That buy signal becomes confirmed above Intermediate resistance at 98.39. The Cycles Model anticipates a possible rally yo early-to-mid August. The most hated and most shorted USD may be about to mount a terrific short squeeze.