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.
11:53 am
VIX has broken out of its declining wedge formation, giving a buy signal. It has also risen above the 50-day Moving Average at 18.64, adding confirmation to that signal.
11:41 am
BKX slipped beneath its three-month trendline, giving a sell signal. The Cycles Model infers the decline may last to mid-August. Ending Diagonal formations often completely retrace themselves suggesting the target of this decline may be the April low. Should it venture beneath the neckline of the Head & Shoulders formation, the decline may be much deeper.
7:45 am
Good Morning!
SPX futures completed its Key Reversal during the after hours by declining to 6217.50. It has since bounced back to retest the bottom parameter of the Key Reversal at 6239.00. Key reversals have been known to be reliable buy/sell signals. Further confirmation was made with the trendline crossing at 6250.00 – 6255.00. The trendline is rising at a pace of 10.9 points per day, leaving it closer to 6265.00 today. The next lower support lies at 6079.08 which may add further confirmation of a sell signal.
ZeroHedge reports, “US equity futures and global stocks dropped, but were well off session lows, as a stream of negative tariff headlines and dialed-back expectations for interest-rate cuts prompted doubts about the market’s ability to sustain recent highs and sent 30Y yields above 5%, a level seen as a redline for further stock appreciation. As of 7:00am, the S&P 500 was on track for a second straight decline, with futures down 0.1% after , while Nasdaq futures were 0.3% lower after closing at a record; the small-caps Russell 2000 is seeing an early outperformance bid. Pre-mkt, Mag7/semis are mixed as are Cyclicals with Banks seeing an offer into the next batch of earnings. In Europe, the Stoxx 600 slipped 0.2%, weighed down by technology shares as ASML Holding NV trimmed its growth outlook for next year, citing trade tensions; French car giant Renault slumped 16% after slashing its profit guidance. Treasury yields are flat as is the USD. Commodities are mostly higher with Ags leading, precious metals following while energy is modestly weaker. Today’s macro data focus is the PPI data which will give more clues about how tariffs are affecting companies after mixed CPI numbers. We have another batch of Fedspeakers who will say nothing of importance.”
VIX futures consolidated in the overnight market. The SPX reversal may have caught hedgers by surprise yesterday. There appears to be a wait-and-see approach to yesterday’s reversal. The declining wedge offers a breakout point above 17.85 where a buy signal may be offered. In the meantime, the 50-day Moving Average is at 18.73, where recognition of the change in trend may be realized. Don’t ignore it, as it may offer a unique profit opportunity for those aware of the potential for profit. The Cycles Model suggests that the downtrend may be broken today.
ZeroHedge observes, “2025 is playing out much like we anticipated. The US economy keeps slowly weakening even as the equity markets remain elevated. Meanwhile, the Chinese economy is rapidly deteriorating, less so Europe and non-China Asia.
Equity markets don’t reflect the degree of economic malaise that exists across the globe because global central banks have learned that equity markets are key indicators for inspiring economic confidence. It’s why China and Europe are experiencing strong equity performance. It won’t last.”
USD futures made a buy signal yesterday by crossing above Intermediate support/resistance at 98.14. Today is may test the 50-day Moving Average at 98.83, potentially setting off a firestorm of short covering. The past six months have been good to the USD shorts…until it’s not. The ensuing rally may take the USD above the mid-cycle resistance at 103.59, where shorts may abandons all hope. The Cycles Model suggests another three weeks of high velocity rally, starting today.
TNX futures rose to an overnight high at 44.95 before easing back down. This may mark the end of the current Master Cycle, suggesting a pullback to relieve the overbought condition. The mid-Cycle support at 43.84 may provide a cushion for the retracement. However, the Cycles Model warns of a rise in velocity by the end of the week. This indicates a possible phase-shift, sending yields considerably higher.
The Japanese Yen may have reached its Master Cycle low this morning’s futures at 67.03. A reversal may be underway in the futures but not yet shown in the charts. The Cycles Model warns of an acceleration of the new trend as early as tomorrow.