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
Good Morning!
SPX futures consolidated inside yesterday’s trading range. While the time element of the Master Cycle appears complete, SPX must still break the Cycle Top support at 7152.00 to produce an aggressive sell signal. What lies ahead may be a shallow (Wave B) decline that may stop at the 52-dy Moving Average or the mid-Cycle support at 6765.00 over the next 2-3 weeks. A confirmed sell signal may not be given. Instead, the decline may be the last “buy the dip” opportunity of the year. While most analysts view the market against its own past performance, the rest of the world may be looking at the US markets as a haven from the turmoil of war.
Today’s options chain shows Max Pain at 7200.00. Long gamma rises above 7240.00 while short gamma resides beneath 7165.00.
ZeroHedge reports, “Stock futures are higher, completely reversing yesterday’s drop with dip-buyers out in force as a fragile ceasefire between the US and Iran held after a day of clashes and sentiment is helped by a pullback in oil prices, with Brent crude futures down 1.4% as well as the US move to return 22 Iranian crew from a seized vessel.”
The premarket VIX is consolidating beneath mid-Cycle support/resistance this morning. The Cycles Model suggests about two weeks of rally that may meet the neckline of the Head & Shoulders formation at 35.30.
Tomorrow’s options chain shows a small contingent of puts between 15.00 and 17.00. Calls dominate the chain starting at 19.00 and extending to 40.00.
The US 10-year Bond Yield has tested the neckline of the Head & Shoulders and was found wanting. The breakout hasn’t happened yet, giving stocks a temporary reprieve. While there may be another attempt at trendline resistance, TNX may be due for a deeper correction. The mid-Cycle support currently at 41.74 may be a more likely target.
USD challenged the mid-Cycle resistance at 98.56 this morning. There is a pending buy signal on USD. Should USD rise above it, a buy signal may be available. Additional resistance lies at 99.00. The Cycles Model suggests thsi rally may last another month, giving USD the time to rise to, and above, the neckline of the head & Shoulders formation. The model remains quiet this week, but shows increasing trending strength the following week.
Bitcoin is probing the mid-Cycle resistance at 81245.60, as mentioned yesterday. This suggests that Bitcoin may have a more bullish long-term track. However, it is also at the end of its current master Cycle, suggesting a pullback may soon be in play.
Crude oil may be in a correction lasting up to 2 weeks. A possible retracement low may be found near the 52-day Moving Average currently at 91.60. From that point, crude may be rising alongside the SPX into the Summer.
Gold made a deeper low on Sunday, extending the Master Cycle. A reversal may be imminent, with a potential buy signal above Intermediate resistance at 4656.97. The Cycles Model calls for a possible month-long rally.