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.
10:51 am
BKX has crossed beneath the rising trendline, offering a sell signal. Confirmation may come at the mid-Cycle support located at 126.07. This must be taken seriously, as the BKX is the canary in the coal mine for market liquidity .
7:45 am
SPX futures declined to a morning low of 5984.40 thus far. The double trendline near 6025.00 was crossed yesterday afternoon, creating a probable sell signal. The overnight action added plausibility to that scenario. There is likely to be a bounce today to retest resistance before moving lower. The ;reversal was made precisely on the Cycle turn date. The next level of supports lies on the mid-Cycle support at 5822.35. The 50-day Moving Average is well beneath that at 5951.25 due to the deep decline in April. The 1987 trendline lies near 5600.00. Most analysts view this decline as a brief pullback, only to resume the rally to new highs. On the other hand, the Cycles Model suggests a much deeper decline lasting to mid-July.
Today’s options chain shows Max Pain at 6045.00. Long gamma may begin above 6060.00 while short gamma rules beneath 6020.00.
ZeroHedge reports, “Stock futures, bond yields and the dollar are all lower after Trump ramped trade war tensions back up saying he wants to set unilateral tariff rates higher/reimpose higher duties within the next two weeks to on several countries before the July 9th deadline while Bessent floated extensions for countries negotiating in “good faith.” Market jitters also intensified amid heightened tensions in the Middle East, with speculation that Israel may attack Iran sending oil surging. As of 8:00am, S&P 500 futures were down 0.6%, near session lows, putting the benchmark on track for its first back-to-back loss in three weeks as the S&P fails to hold the 6k level despite a dovish CPI and a strong 10Y auction. According to JPM, “the combination of a disappointing US/China deal (so far), higher oil prices (new geopolitical risk unlocked), and the inability of MegaCap Tech to hold gains (profit taking as we approach ATHs) seems to be the combination that reversed stocks lower.” Nasdaq 100 futures are down 0.5% with Mag7/Semis weaker; ORCL rose 7% after projecting cloud infrastructure sales will jump more than 70% in the current fiscal year, while Boeing shares tumbled 8% after an Air India Boeing 787 traveling from Ahmedabad in India to London’s Gatwick airport crashed shortly after taking off, in what was the most serious accident involving the US planemaker’s most advanced widebody airliner. . Small caps are underperforming as the yield curve bull flattens. The USD is lower (new 52-wk low) and commodities are selling off with natgas and gold the bright spots. Today’s macro focus is PPI while a 30-year Treasury auction at 1pm ET will provide a key test of sentiment, given concerns about mounting deficits and the cost of Trump’s signature tax bill.”
VIX cash market rallied to 18.87 this morning after having made its Master Cycle low on day 258 of the former Cycle. The new Cycle offers the potential of a 5-week rally that may exceed the April high. Today is a wake-up call that thing may not proceed as before. The Cycles MOdel recognizes the change in trend at the mid-Cycle support/resistance line at 19.75. Most analysts agree that they may notice a change in trend above the 50-day Moving Average at 24.82.
The June 18 options chain recognizes Max Pain at 19.00. Short gamma rules beneath 18.00, while long gamma kicks in the door above 20.00.
TNX is testing the 50-day Moving Average at 43.63 this morning. However, it may not stay at the low. The Cycles Model introduces a new surge of Trending Strength today. It may possibly be doe to the $110 billion short-term paper and the $22 billion 30-year bonds being offered at auction today. The Cycles Model anticipates 4 more weeks of rising yields that may break out above the neckline of the Head & Shoulders formation.
USD futures declined to 97.60 this morning, testing the Cycle Bottom at 97.59. It may have made a Master Cycle low today, on day 258 of the current Master Cycle. Should that be so, the Cycles Model projects a rally to early August as international tensions heat up.
Gold futures rose to 3414.60 this morning as it tests the Cycle Top at 3422.33. This may be the completion of a Trading Cycle, which is not expected to make a new high. The excitement is tangible, but liquidity may be an issue as yields begin to rise. In addition, the Yen is also rising, choking off alternate sources of cheap liquidity.
Crude oil rose to 69.01 this morning then made a brief pullback to 66.73 . It has risen above the mid-Cycle resistance at 68.42, confirming its buy signal. Once the pullback is done, it may resume its rise to the Cycle Top at 77.71. The Cycles Model continues to support the rally to mid-July, leaving the short sellers in tears.