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.
11:31 am
The BKX may have made its Master Cycle high yesterday at 190.02, creating a lower, secondary high near its Intermediate resistance at 188.71. A reversal may be imminent. A decline beneath the trendline near 185.00 may produce a sell signal. The new master Cycle is projected to decline to late Ocober. The cross-currents of a rising Yen and negative excess liquidity may be putting a strain on the banking system. Higher 10-year rates may put a nail in the coffin.
8:45 am
SPX futures pulled back this morning, weighed by the better-than-expected Jobs Report. The good news/bad news dichotomy may not last, as it reveals strength in our economy that other leading countries do not have. The SPX remains on an uptrend that may support new all-time highs while other major economies do not..
ZeroHedge earlier reported, “US futures are choppy, trading between unchanged and modestly higher, ahead of today’s jobs report which sees a modest increase in August payrolls (but the risk is for another negative print,”
ZeroHedge later reports, “A four standard deviation beat for non-farm payrolls this morning (good news) is triggering ugly reactions (bad news) across markets with rate-hike odds for September ripping back up near recent highs (despite no signs of inflationary wage growth – in fact it is slowing).”
The premarket VIX plummeted to 13.80 this morning, challenging the December low. This action may be called a throw-under as it escapes the lower confines of the trading channel. Throw-overs/unders may last up to a week before resolving in the opposite direction.
The US 10-year Bond Yield spiked higher this morning after Waller dismissed elevate energy prices and tariffs as inlfationary. The Cycles Model suggests that yields may remain on a sideways tangent between the Cycle Top at 47.97 and the neckline of the Head & Shoulders formation at 47.00 for possibly another week.
The USD may have resumed its rally after yesterday’s plunge on Warsh’s statement. A rise above the mid-Cycle resistance at 99.17 may prove the setback to be only temporary as the trend may be pointing higher. A buy signal rests above the mid-Cycle. A breakout above the 52-day Moving Average at 100.26 may bring more buyers.
Say “goodbye” to the Yen Carry Trade as the Yen has risen 3.3% in a single day and 5.5% since late July. The move may have been tied to policy intervention by the Bank of Japan and a possible rate hike being considered at their Spetamber 18 meeting. The Yen Carry Trade had a loan rate of as little as .10-.25% a year ago. Rate have risen since then while the BOJ considers raising their loan rate from 1.00% to 1.25%. This does not account for the rising currency costs. This may have been a large sourc e of liquidity in the pas decade.
Crude oil pulled back this morning after a very active month. It did not break out above the July high at 93.50, leaving the possibility of a further correction to test intermediate support at 84.10. Should the decline tarry, crude may decline as far as the 52-dAY moving Average at 80.32. The Cycles Model anticipates the return of trending strength in the latter half of September.
Gold plunged to 4365.00 this morning before a bounce, testing Intermediate support at 4320.00. The Cycles Model anticipates a lower test at the 52-day Moving Average at 4228.82 before a more substantial bounce.
ZeroHedge observes, ” It was reported yesterday that the Netherlands just shifted approximately 86 tonnes of its gold reserves from New York and Ottawa to London, explicitly citing “increasing geopolitical unrest” and the need to prepare for severe crises.”
The Agriculture Index declined to 434.73, testing the neckline support near 420.00. The Index is at an interesting phase. Should it find support at the neckline, it may go considerably higher. Alternatively, a decline beneath the neckline may reset the H&S formation. The Cycles Model considers a possible burst of trending strength this weekend, which may trigger the H&S formation.
ZeroHedge advises, “Chicago rice futures are on track for their largest annual gain since 2003 as the grain that feeds much of the world becomes increasingly expensive amid an intensifying El Niño and diesel-fuel and fertilizer supply disruptions stemming from turmoil in the Strait of Hormuz and the Russia-Ukraine war.”
Bitcoin was repelled yesterday by its Cycle Top resistance, currently at 82842.00. It then declined beneath its trendline, near 80800.00, offer ing an aggressive sell signal. A decline beneath 76250.00 may confirm the signal. The Cycles Model suggests a possible decline to late October. While the mid-Cycle support at 69840.94 may provide a bounce, The full Cycle target may by the Cycle Bottom at 56839.00.