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.
8:00 am
Good Morning!
SPX futures declined to 7672.90 this morning, beneath round number support at 7700.00. A probe beneath its prior low at 7638.00 indicates a possible further decline to test the 52-day Moving Average at 7560.02 over the next two weeks. While institutional investors are lightening up on equities, retail investors are buying calls. The dip may not be ready to be bought.
ZeroHedge reports, “US stock futures dropped in thin trading with most traders out as summer draws to a close, while oil prices jumped after the US and Iran exchanged attacks for first time in weeks.”
The premarket VIX rose to 15.29 this morning, above the lower Triangle trendline. Investors had given up on buying protection last week, just as the price is being reset. The Cycles Model suggests a probe higher to the top of the short-term trading channel just beneath 20.00.
The US 10-year Bond Yield may have hit escape velocity, remaining above the Head & Shoulders neckline at 47.00. The Cycles Model anticipates TNX rising to a new high this week, then a possible retest of the neckline.
ZeroHedge observes, “The US $40 trillion debt has dominated global headlines. However, although the US fiscal challenges are relevant, we must remember an important lesson. Fiscal policy is not about who wins but who loses first.”
USD is consolidating near Friday’s high as it is now on a buy signal. The Cycles Model suggests a contiued rise to mid-October, giving the dollar the ability to break above its Head & Shoulders formation.
Gold futures are consolidating near Friday’s low, after having left a sell signal by declining beneath the mid-Cycle support/resistance at 4548.74 on Friday after investors piled in at the high. The Cycles Model suggests a possible further decline to mid-September where the Cycle Bottom may come into play.
Investing.com remarks, “Gold prices pulled back on Monday as investors continued to reassess the Federal Reserve’s rate outlook following Chair Kevin Warsh’s hawkish inflation message, while rising oil prices added to inflation concerns.”
Crude oil rose above the downtrend line as itt rose out of a minor Trading Cycle low last week. The Cycles Model suggests a possible surge, propelling it higher this week. The longer term outlook shows crude rising through mid-October. The Cycle Top resistance at 110.73 is a critical point during this rally. Should it rise above it, neww all-time highs may be expected.
The Agriculture Index may have made its Master Cycle high on Friday. The Cycles Model suggests a reversal may not come until the end of the week, so no action is anticipated until the final high is recorded.