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 dove to 6218.30, challenging the Ending Diagonal trendline near 6225.00 this weekend. Last Thursday’s Master Cycle high was extended a full 30 days beyond its average length, an unusual event. The Cycles Model now anticipates approximately 40 days of decline. A sell signal may be obtained at the crossing beneath the trendline. There aare few, if any, anomalies in the Cycles Model until mid-August, when volatility breaks loose in a big way. That doesn’t mean the excitement cannot begin sooner. There is about $7 trillion on the sidelines, leading analysts to anticipate a further melt-up in equities and bitcoin.
ZeroHedge reports, “US equity futures are lower, although well off session lows, and European stocks slumped after Trump’s weekend threat to slap 30% tariffs on EU and Mexico, providing a test for markets that were recently at record highs. With global yields blowing out, as German and Japanese long-dated bonds slumped as traditional safe havens were ignored, amid the risk-off tone the only flight to safety today are cryptocurrencies and precious metals, with Bitcoin surging to a new record high of $122,000 while silver rose above $39 for the first time since 2011. As of 8:00am ET, S&P and Nasdaq futures are down 0.3% after Trump said the tariff rates will kick in on Aug. 1 if the EU and Mexico can’t negotiate better terms, and investors will need to make the call on whether he’s going to follow through this time, with Mag 7 names mostly lower premarket with NVDA/TSLA in the green. Semis are also under pressure and cyclicals and defensives are mixed, pointing to a choppy session. The Treasury yield curve is seeing a slight bear steepening while the USD is flat. Commodities are stronger across all 3 complexes with crude, nat gas and silver the standouts. A flurry of economic data is in focus this week, with CPI due on Tuesday and PPI on Wednesday plus the unofficial start to earnings season with all the big banks reporting.”
VIX futures rose to 17.85 over the weekend, leasing the Thursday low as the potential Master Cycle low. The VIX Cycle allowed compression which, it turn, gave the green light to stocks last week. Tha;t may now be over, or nearly so.
TNX broke above its July 9 high at 44.35 this morning. This may end up as a false move, as the retracement appears incomplete. Should that be the case, we may see TNX decline to the Cycle Bottom near 40.77.