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”
1:43 pm
SPX had an explosion of short covering today with no catalyst, other than the shorts were due to be covered. Intermediate Wave (3) was a monster 529 point decline in just 20 days. It was also the end of an overdue Master Cycle. The rebound may not last. An estimated target may be in the range of 6550.00, where short covering may run out of steam.
8:00 am
Good Morning!
SPX futures rose to 6425.60 this morning, beneath short-term resistance at 6438.00. The Model remains bearish. Hedge funds and commercials are bearish. The expected bounce did not materialize. The Cycle Bottom at 6251.18 may now be an attractor along with the 1987 trendline near 6200.00. While the market may be near exhaustion, there is no clear catalyst to instigate a short squeeze. Instead, further capitulation may be at hand.
Today’s options chain shows Max Pain at 6405.00. Long gamma may start above 6425.00 while short gamma rules beneath 6400.00.
ZeroHedge reports, “Futures are higher on a WSJ report that Trump is considering exiting the middle east conflict even if the Strait of Hormuz is not reopened; but the market is deciding whether this is a genuine intent to leave or another feint given the previous US attacks during negotiations and that Trump has yet to adjust his Apr 6 deadline.”
The premarket VIX declined to 28.28, remaining above the Cycle Top at 25.15. The Cycles Model offers a burst of trending strength today which may elevate the VIX above the neckline of the Head & Shoulders formation. If so, the VIX may pause before going higher. Should that be the case, the VIX may assume leadership role in a further bear market.
Tomorrow’s options chain shows short gamma beneath 24.00 and long gamma above 25.00.
The US 10-year Bond Yield is hesitating at 43.00. A bounce is possible, but the Cycle Top at 44.18 is offering resistance. The Cycles Model suggests that TNX may be in a corrective mode for another week or so, as the market absorbs the reality of higher yields.
The USD rally is being blocked by the neckline of the Head & shoulders formation at 100.60. It may consolidate for another week as TNX is also in short0term retreat. Intermediate support at 98.79 may offer a floor from which a stronger reversal may be instigated.
Bitcoin made a second attempt at overcoming the 52-day moving Average at 68713.00, but retreated. The next move may be to test the low at 65000.00. Should it go lower, a panic decline may emerge by the weekend.
Crude oil climbed even higher, to 106.82 overnight, then eased down to 100.88 this morning. The market remains uneasy above $100.00 oil. Unfortunately a break beneath 100.00 may not last, as tensions may heat up in the second half of April.
ZeroHedge remarks, “The overnight Wall Street Journal report that President Trump told aides he is willing to wind down the U.S. military campaign against Iran even if the Strait of Hormuz remains disrupted (and appeared to confirm this narrative in a social media post this morning) comes just as the national average gasoline price hit the politically sensitive $4-a-gallon threshold, underscoring the delicate balancing act the administration is facing in managing battlefield objectives and domestic fuel costs.”
Gold rose to 4649.28 in the overnight session, but pulled back to 4600.00 this morning. Oil priced above 100.00 is causing liquidity issues for many countries. The major sellers of gold are central banks needing to purchase oil at elevated prices. There may be another downdraft in gold that may go beneath 4000.00 before the price of gold recovers.
Silver rose to 73.73 this morning and may be heading lower. The cycles Model infers the correction may not have finished yet, which may nip the budding bounce. The downside target may be in the range of 45.00 to 55.00. That may be a good range to start accumulating silver again.