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
7:45 am Spring officially begins at 10:46 am today.
Good Morning!
SPX futures declined to 6549.90 in the overnight session, then bounced, with dealers attempting to push back up above 6600.00. However, the decline is due to continue to 6500.00-6525.00, and may go lower before the next bounce, which may subsequently be resisted beneath 6600.00. Yesterday the market experienced a near record of SPX futures liquidations by institutions. That may continue today. Speculators are starting to buy SPX calls for next week, signifying a larger potential bounce, but they are still early in the decline. Meanwhile, retail investors have stayed away, quelling the urge to “buy the dip.” The liquidation of longs may continue to be orderly, but a panic may develop when the next tranche of short covering/call buying fails. It is more likely that the current Master Cycle in the SPX may terminate near 6200.00.
Today’s options chain shows Max Pain at 6650.00. Long gamma begins above 6665.00, while SPX futures are deep in short gamma beneath 6600.00. There are several substantial walls of puts down to 6500.00.
ZeroHedge reports, “Futures are weaker heading into the weekend after US equities finished lower yesterday despite Netanyahu headlines leading to a late day bounceback into EOD.”
The premarket VIX is consolidating above the Cycle Top at 23.55 this morning. In the past, the VIX has been ahead of the SPX moves. This time, the VIX seems hesitant. That hesitation may stop when the VIX powers above the neckline of the head & Shoulders formation.
The US 10-year Bond Yield has risen above the neckline of the Head & Shoulders formation this morning near 43.00. It may indicate a resumption of the rally to the Cycle Top at 44.06 by the end of the month.
11:00 Update
The US 10-year Bond Yield has ramped up to 43.93, already this morning, showing the beginning signs of panic. The oil market getting tighter, especially in Asia and Europe. This is driving inflation much higher than expected.
USD bounced, but may be headed lower today. The fuel for a larger bounce may be at the mid-Cycle support at 98.43. It simply needs to power to rise through the Head & Shoulders neckline at 100.54.
The Japanese Yen bounced today, but it may have already run out of gas. While it appears strong, it may be too early in the Master Cycle for a firm take-off. A confirmation of a true reversal may be implied by overtaking resistance at 63.92. Otherwise it may reverse down to the Cycle Bottom at 61.92 in another week or so.
Bitcoin bounced at Intermediate support at 68867.00 yesterday and may test the 52-day Moving Average at 70500.00 today in a consolidation. Should the 52-day resist, bitcoin may resume its decline. A slip beneath Intermediate support offers a sell signal that may be the onset of a serious decline as early as this weekend.
Silver declined to 70.87 in the overnight session before bouncing to 74.60. The intraday swings are becoming more powerful, indicating the decline may not be over. The Cycles Model calls for a possible panic decline over the weekend, then another bounce. The next support may be the mid-Cycle level at 58.16. Beneath that, supports may be found at 50.00, 45.00, and 40.00
ZeroHedge comments, “Silver has gone from chaos to “boredom”, and that’s exactly where traders get hurt the most. The panic is gone, but the pain isn’t, as both bulls and bears keep getting chopped up inside a range that refuses to break.”
Gold found support at 4500.00 yesterday and is due for a bounce. Today it rose to 4736.10 before settling down a bit. There is a potential for a higher bounce as Resistance lies at the 52-day Moving Average at 4944.00. The chop is wearing investors down.
Crude oil may have begun its descent with a new low at 92.48 this morning. The cycles Model infers a breakdown in oil lasting to mid-April. There are multiple supports below that may offer a bounce or possibly a reversal.