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
12:15 pm
After a long hiatus, the Ag Index has finally come alive. I have stated that this is a sector to accumulate for the past six months, as agricultural prices fluctuated in a narrow range. Our food at the grocery store is affected by multiple inputs. Fuel is one of them. Fuel is needed for growing and transportation of the finished products. Food accounts for 12% of the average American family’s budget. It could double in the next year. A knock-on effect is the impact of food prices on inflation also raises the cost of financing (bonds).
11:55 am
BKX may be losing upward momentum with the neckline of the Head 7 Shoulders at 148.00. There are four more weeks of decline being proposed by the Cycles Model. If so, BKX may easily decline beneath the neckline very soon. Major bank announcements are often made during the weekend to mute market reaction, especially for bad news. The Cycles Model suggests volatility may increase by the weekend, as the first domino in private credit may have fallen.
ZeroHedge reports, “The barrage of negative private credit news, now that the $1.8 trillion bubble has burst, is coming hot and heavy.”
8:00 am
Good Morning!
SPX futures may have begun their next decline phase after a reversal beneath the 52-day Moving Average at 6898.00. The Cycles Model suggests another week of potential decline with increasing intensity/volatility. The next support level may be the Head & Shoulders neckline at 6710.00. The Cycles Model infers a possible panic down day tomorrow, followed by a mush more intense panic next week. Investors have sold put protection in large amounts during the recent bounce, leaving them vulnerable to another downturn. The oil crisis still has legs and may define risk over the next week or so.
Today’s options chain shows Max pain at 6820. Long gamma may begin above 6850.00 while short gamma prevails beneath 6790.00. One-day options have greatly reduced due to the bounce. However, longer-term options are still strongly short.
ZeroHedge reports, “US equity futures remain extremely illiquid, jittery and volatile, and are down 10bps near the morning lows, erasing a 0.5% gain after earlier rebounding on hopes the upcoming SPR release will keep oil lower (it has so far failed to do that).”
The premarket VIX rose to 26.23 this morning as it approaches the Head and Shoulders Neckline at 28.15 after finding support at the Cycle Top at 22.71. The next opportunity for a possible panic move may occur at the monthly options expirations, March 18-20.
The March 18 (monthly) options chain shows Max Pain at 21.50. Massive short gamma positions have been taken between 16.00 and 21.00. Long gamma begins at 22.00, with institutional presence at every 5 points up to 100.00.
The US 20-year Bond Yield leaped to 41.94 this morning, testing the 200-day Moving Average at 41.98. The Cycles Model infers that trending strength may intensify into the weekend, with a possible panic surge by mid-week. The prevailing belief that the war in the Middle East will be short-lived has had a limited effect on yields. However, an acceleration in the oil crisis may have a much more dramatic consequence for the TNX.
12:00 pm
TNX has broken out above the 200-day Moving Average. See US 20-year Bond Yield.
ZeroHedge reports, “Not that anyone will care much in light of the Iran-related news barrage hitting every second, but moments ago the US sold $58BN in 3Y paper in what was a rather ugly auction.”
Crude oil is in a consolidation phase today, as threats are exchanged over the Middle East. Trending strength may return by the weekend with another potential burst of energy by mid-week. The next week may prove to be very active for crude. Secretary of Defense, Pete Hegseth claims the war intensity may increase today.
Bitcoin made a retracement of its decline from its March 4 high at 74083.89 yesterday. The lower high suggests a further decline ahead. A sell signal awaits beneath Intermediate support at 68135.00. The Cycles Model warns that the decline may possibly linger to the end of April. A possible downside target may be as low as 37000.00.