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 tested the low by declining to 7609.50, testing Intermediate support at 7615.23 this morning, then bounced into positive territory. It did not need to test the 52-day Moving Average at 7567.44. Cycle Top resistance is currently at 7887.23 and rising, shile the uupper trendline may reach 8000.00 in a couple of weeks. Domestic analysis shows that excess liquidity is negative, buybacks are fading and there isn’t much incremental buying power left. However, they miss an important point from the international economy. Japan may be on the verge of collapse.
ZeroHedge reports, “US equity futures are lower with Tech underperforming as oil prices / bond yields move higher (although off session highs), both in response to an acceleration in “kinetic hostilities” in the Middle East.”
Nikkei 225 futures dropped to 63760.00 this morning after being unable to rise above its 52-day Moving Average at 67149.48. Its current Master Cycle is a long lasting one, ongoing to mid-November. While investors are acting “edgy” around the SPX, the decline in the Nikkei will force investors to find safe harbor elsewhere. The DJIA and SPX offer alternatives as the strongest indices globally.
The premarket VIX rose marginally higher this morning to 16.82 thus far. The VIX has carried a volatility deficit since the start of the Iran war. Despite rising stock prices, VIX may continue its rise. There are indications of large dealer losses in the options market that may be revealed in the coming days.
The US 10-year Bond Yield pulled back this morning from its Master Cycle high. TNX is due for a back-test of the Head & Shoulders neckline near 47.00. It may go lower, but should it stay above, the next phase of the uptrend may be powerful. The Cycles Model shows about 2 weeks of potential weakness before moving higher in strength.
Crude oil made a new high this morning before pulling back. The Cycles Model suggests possibly sideways-to-lower prices over the next two weeks before strength reappears. While Venezuela oil does not immediately translate into lower gas prices, the impact of this new fuel source may take months to develop.
ZeroHedge notes, “The exploding cost of energy is most obviously being felt at the gasoline pumps for Americans as evidenced in this Visual Capitalist graphic where prices in some states are up over 60% in six months in the wake of the Iran war.”
The Agriculture Index made a new high this morning, then pulled back. This may not be a reversal from the Master Cycle as yet. The Cycles Model show another bout of strength coming this weekend that may produce a top. What may follow is a back-test of the head & Shoulders formation before resuming its uptrend.
ZeroHedge remarks, “The Bloomberg Agriculture Spot Index (BCOMAGSP) posted its largest monthly gain since the chaotic days of the Arab Spring riots and is nearing a breakout above its 2023 highs, signaling a broad-based acceleration in agricultural commodity prices.”
Gold bounced from its Intermediate support at 4294.19 this morning, beginning a possible correction that may test the 52-day Moving Average at 4217.00. Ths is not to be mistaken for a reversal…just a bounce. Hope springs eternal, as investors may try to pile in to the “dip.”