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.
8:30 am
Good Morning!
SPX futures probed the Intermediate resistance at 7453.27 after yesterday’s strong bounce off the 52-day Moving Average at 7358.36. A rise above that level brings the SPX to the Cycle Top resistance at 7532.44. Should it stop there, a Triangle formation may appear, followed by a long tail declining into mid-July, shaking out weak hands. It may be a miserable experience for those seeking quick and easy returns in leveraged products.
ZeroHedge reports, “US index futures erased an earlier gain following some belligerent Iran headlines, but are still set to end a quarter that is set to be the S&P 500’s best in six years with markets behaving as though period-end dynamics have now completed.”
The premarket VIX continues its decline, but may stop short of the lower Triangle trendline, as the Master Cycle may be due to reverse this week. The Traingle formation is already 2.5 years long. It may become notoriously longer.
The US 10-year Bond Yield is probing higher and may challenge the 52-day Moving average at 44.41 in short order. The Cycles Model allows a week or longer of bounce which may terminate near the Cycle Top resistance at 45.63.
USD is consolidating above the Cycle Top and Head & Shoulders neckline. While the Master Cycle fulfilled its requirements for completion last Wednesday, it may still extend higher, despite its overbought condition. USD shorts are in a precarious condition, due to the breakout, which may lead to more short covering.
Bitcoin is diving again, with the Cycle Bottom at 55538.00 in view. Once the target is met, a bounce may follow. However, this is not the end of the decline. The Cycles Model infers a continued decline to early August.
Crude oil has stabilized above its Master Cycle low at 68.56. Trending strength may appear imminently, guiding crude oil above the mid-Cycle resistance at 74.75 and confirming the reversal. Once accomplished, the Cycles Model suggests a potential rally to mid-August.
OilPrice.com reports, “Crude oil prices are in freefall after the United States and Iran agreed on a ceasefire, set to last 60 days. Traders expect the ceasefire to unleash an avalanche of crude, and indeed, tankers are leaving the Persian Gulf in growing numbers. And yet Iran just struck a commercial ship in Hormuz.”
ZeroHedge observes, “Tanker traffic through the Strait of Hormuz tumbled since late last week, as ship owners and operators froze up amid the renewed hostilities between Iran and the US over the weekend.”
Gold made a new low this morning, confirming the decline may continue. The cycles Model infers a continued deterioration, with corrective bounces, to mid-July with a possible target either the Cycle Bottom at 3771.34 or the lower trading channel trendline, approaching 3600.00. Defenders of gold-as-currency have become silent.
BKX has declined beneath its Cycle Top support/resistance at 182.58. This action suggests an aggressive sell signal may have been made. Thus far, the decline may be interpreted as “profit taking” due to the fact that the underlying weaknesses have been camouflaged by a rising market and steady yields in the bond market.
The Ag Index continues its decline toward the Cycle Bottom at 338.79. The Cycles Model suggests the decline may continue to the end of July, when the results of the wheat harvest comes in. The Ag Index is entering a period of accumulation prices are due to dramatically increase once the bottom is in.