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
3:25 pm
BKX was unable to energize a sizable bounce today. I may be ready to slip through the Head & Shoulders neckline with the target possibly being attained in the next month.
3:00 pm
SPX rose to 6722.87, a small overshoot of the 38.2% Fibonacci retracement at 6714.00. It now appears to be stuck at the neckline at 6710.00. While it may still go a bit higher, SPX may go lower, first. The 50% retracement level is at 6740.00 and the 61.8% retracement is at 6765.00. One of those two levels may be attempted before the bounce is over. Regardless of the retracent levels, SPX remains on a sell signal.
ZeroHedge advises, “Markets are pointing higher this morning. But do not chase. Remember, don’t get caught up in narratives about what assets are “supposed” to do.”
8:00 am
Good Morning!
SPX futures bounced to 6689.20 over the weekend thus far. The bounce came near the 200-day Moving Average at 6604.00 where short covering began. Overhead resistance to the bounce lies at the neckline at 6710.00. SPX may consolidate between the 200-day and the neckline for the next two days. After a record purchase of short ETFs on Friday, the market was primed for a bounce at the 200-day. In addition, hardship withdrawals from 401(k) plans also hit a record last week.
Today’s options chain reveals Max Pain at 6700.00, another reason for the bounce. Long gamma strengthens above 6725.00 while short gamma is strong beneath 6675.00.
ZeroHedge reports, “Stock futures are higher AS energy prices dip modestly even as the war in the Middle East enters a third week, with Trump’s endgame unclear amid requests for international help to reopen the SoH.”
Premarket VIX dropped to 24.72 over the weekend session. VIX may correct down to 22.20 in a “flat” correction. Lower is possible, but less likely. The Cycles Model suggests the VIX may start ratcheting higher toward the end of the week. There will be a lot of pressure to keep this week’s op-ex calm.
Wednesday’s options chain shows Max Pain elevated to 22.00. Short gamma registers well between 15.00 and 21.00. Long gamma may begin at 23.00 and shows institutional presence up to 100.00.
The US 10-year bond yield has retreated from resistance at 43.00 to consolidate for a couple of days. Its downside target may be the 200-day Moving Average at 41.95. Trending strength returns in the latter half of the week, as TNX may probe to new highs.
The USD retreated from its Friday high in a consolidation move that may last up to 2 weeks. The 200-day Moving Average at 98.38 is a likely landing spot before the uptrend resumes.
Bitcoin ceased its bearish leanings by ramping to a new high above the 52-day Moving Average at 71792.00 over the weekend. While overbought and due for a possible pullback, bitcoin may be trending higher for up to another month. A volatile patch at mid-week may give a possible hint of what its leanings really are.
Silver declined to 77.20 over the weekend before it bounced. It may have another three weeks of decline ahead as it furthers its correction. The next support level may be the mid-Cycle support at 57.28.
Gold slipped beneath 5000.00 this weekend as it continues its decline. supports are at the 52-day Moving Average at 4902.53 and 4400.00.
Crude oil advanced to 99.71 over the weekend session before a pullback with a low at 91.88 as crude was showing signs of exhaustion. The decline may continue for up to next four weeks with a possible target near the Cycle Top at 76.81 and as low as the 52-day Moving Average currently at 66.49.