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.
8:15 am
Good Morning!
SPX futures rose to 7445.40, challenging the Cycle Top resistance at 7428.67, then eased back. The downside fractal becomes complete beneath Friday’s low at 7368.63. A likely target for this decline may be the 52-day Moving Average at 7149.92, the next layer of support. A secondary target may be the mid-Cycle support at 6894.60. The correction may be complete in 2-3 days.
Today’s options chain shows Max pain at 7450.00. Long gamma strengthens above 7475.00 while short gamma rules beneath 7425.00. SPX is squarely in short gamma which may affect today’s outcome.
ZeroHedge reports, “US equity futures are higher as Monday’s US stock gains extend into today’s trading with both tech and small caps outperforming as the AI theme resumes its global surge and US/Iran deal optimism is back (on the back of the now daily optimistic comments from Trump) broadening the rally.”
The premarket VIX declined to 17.96, but bounced back near the mid-Cycle resistance at 18.68. Should it rise above that resistance, and the 52-day Moving Average at 19.52, it may rally to the Cycle Top at 25.76. A secondary target may be the trendline near 30.00. Wave (E) must be a zig-zag, implying that, once the bounce is complete, VIX may turn back dow to make a new low.
Tomorrow’s options chain shows a small short gamma holdout at 15.00. Long gamma begins at 16.00 and goes to 30.00.
The US 10-year Bond Yield may be at a crossroads. It may proceed higher toward the weekly Cycle Top and trendline before resuming its decline in an expanded Triangle formation which can be traced to October 2023. As seen in the weekly chart, TNX may have another decline to the lower trendline, possibly lower, at some point soon.
The USD Index reversed rom its Master Cycle high on Monday. The new Master Cycle may go coast-to-coast, frim the Cycle top to the Cycle Bottom in the next three weeks. What appears to be a calming effect in the USD may be a false signal, calming the markets.
Bitcoin may have resumed its decline this morning. A further easing beneath 62000.00 may confirm the final leg of the decline. The breakdown on June 6 indicates the bitcoin may probe lower, possibly to round number support at 50000.00.
Crude oil continues its decline to a new low, possibly by the end of the week. A minimal target may be just beneath the May 29 low at 86.35. However, there is a possibility of a long “tail” which may go as far as the mid-Cycle support at 73.74. The tail on (E) may be an emotional surge, ignoring the strategic reserves going dry and the delays of bringing oil-in-the-ground to the final product in the marketplace.
Gold may be in the final stages of its decline, but it isn’t finished yet. The minimal decline may be to round number support at 4200.00. However, there are large players at work. Central banks have been shown to give up their gold reserves in exchange for oil, especially at lower prices. The sell-off may have the potential of sorely disappointing gold longs.
The Ag Index is rising from its Master Cycle low. Normally, this would be presented as a buy-the-dip opportunity. However, there are several features that indicate the GKX may go lower. The first is that it has gone down much further than anticipated, suggesting a larger degree structure may be at work. Second, major trends do not end in zig-zag formations. Finally, the successor Master Cycle has only to the end of June for completion. Once the bounce is complete, it may decline to or beneath the Cycle Bottom at 338.77.