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”
1:22 pm
The NDX reached the neckline of the Head & Shoulders formation and the 52-day Moving Average, its retracement of the decline that started two weeks ago. It had a rare miss of its Head & Shoulders formation. Prepare for a reversal, as short covering may be finished. There doesn’t appear to be any inclination to go long here.
11:00 am
BKX has risen above Intermediate resistance at 156.73 and may approach the 52-day Moving Average at 161.17 in the next day or so. BKX is due for a day of strength tomorrow as well as a major reversal following on its heels.
8:45 am
Good Morning!
SPX futures rose to 6589.80 this morning, approaching the next resistance near 6600.00. Should that hold, the retracement may be over this morning. While futures have a different set of supports and resistances, the cash target of 6550.00 may still be appropriate, with an outside deviance to 6588.00. While yesterday’s bounce may be measured as “Best day since…“, it is an overdue reaction to the end of a Master Cycle.
Today’s options chain shows Max Pain at 6500.00. Long gamma may begin above 6525.00 while short gamma may rule beneath 6575.00. Short gamma has been severely decimated, which is the objective of a retracement as strong as yesterday’s. However, there is no indication of increased longs.
ZeroHedge reports, “Futures and bonds jump and oil fell, sending Brent briefly below $100 a barrel, as the de-escalation/technical/macro led relief rally continues on hopes of the Middle East conflict reaching an end soon after Donald Trump said he expects the war in Iran to end in two to three weeks, and indicated that it was possible that Iran could still reach a deal with the US during that timeframe.”
The premarket VIX made an overnight low of 24.07 and may have begun a bounce. Should the VIX go lower, the 52-day Moving Average at 21.34 may act as a backstop. Normally the VIX offers early notice of changes in trend in the SPX. However the month-long sideways moves in the SPX put a drag on the VIX. Today’s possible reversal may bring the VIX back into sync with the moves in the SPX. The Cycles model suggests a very strong rally over the next three weeks.
The April 8 VIX options chain shows Max Pain at 25.00. Short gamma still resided between 20.00 and 22.00. Long gamma may begin above 30.00and remains strong to 55.00. Note the target of the Head & Shoulders formation.
TNX is consolidating above 43.00 this morning. There may be a bounce to the Cycle Top at 44.16 in the next day or two. However, a second test of the retracement low may take place near the trendline at 42.00 by next week.
Reuters reports, ” The interest rate on the most popular U.S. home loan jumped last week to the highest since August, as rising oil prices from the U.S. and Israeli war on Iran fueled inflation fears and drove up yields on the Treasury bonds that lenders widely use as benchmarks for setting mortgage rates.”
USD made a morning low at 99.32 where a bounce may have begun. USD may test the Cycle Top at 100.35 this week. Should it fail, USD may again test support, most likely the 52-day Moving Average at 98.32.
Bitcoin tested intermediate resistance at 69275.00 this morning and is pulling back. Should it retest resistance, bitcoin may rise to 72000.00. However, the longer view shows bitcoin in a possible race to new lows.
Crude oil slipped back beneath 100.00 after making a retracement high at 106.86 yesterday. Crude is in line for a retracement low, possibly near the 52-day Moving Average at 75.08 by mid-April. Wholesale prices of gasoline are also falling, bringing some relief to the consumer.
Gold continued to rise to 4791.00 this morning. The attraction to the 52-day Moving Average at 4936.39 is growing as gold comes into its reversal zone. The next week may be critical for the price of gold.