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
7:45 am
Good Morning!
SPX futures are in decline, having plunged to 6778.10 thus far. The sell-off may intensify through the weekend before the next bounce. The decline may last up to 2 more weeks before any relief may be seen. (More commentary later.)
9:30 am
A decrease in payrolls and increased hardship have brought another risk to the fore. The steady inflow of pension and 4001(k) contributions may be dwindling. ZeroHedge comments, “My readers know that for the last couple of years I’ve repeatedly warned about the “passive bid” in markets. By that I mean the constant, automatic buying of stocks driven by retirement plans, ETFs, and other systematic investment programs.”
Today’s options chain shows Max Pain at 6845.00. Long gamma begins above 6875.00 while short gamma becomes strong beneath 6825.00.
ZeroHedge reports, “Seven days into the war on Iran and markets are getting increasingly shaky. US equity futures tumbled ahead of the February jobs report, and are on pace to close the worst week for global markets since 2020 deep in the red as the selloff in global bonds deepened after another jump in oil prices fanned fears that the war in the Middle East is fueling inflation. ”
Further news from ZeroHedge, “In our nonfarm payrolls preview, we quoted JPMorgan’s Market Intel desk which said that “for this print, the stronger the better”, which by implication means that a poor number would be bad. By that logic, the actual number couldn’t be any worse, because moments ago the BLS reported that in February, the US lost 92,000 jobs, a huge drop from the downward revised (of course) 126K in January, and the second worst print since 2020 (only October’s shock -140K was worse). The number of private payrolls dropped by 86K, also a huge miss to estimates of a 60K increase.”
The premarket VIX rose to 28.25 this morning. The neckline of the Head & Shoulders formation goes into play above 28.15. Should it open above it, consider this a confirmed buy signal for the VIX. Although investors have been relatively calm about the prospects of a war disrupting the global economy, they remain cautious thus far. However, stress is increasing.
The March 11 options chain shows Max Pain at 20.00 in a brutal contest. Short gamma is increasing beneath 19.00 while long gamma remains clustered beneath 25.00.
The DJIA has declined beneath its neckline, activating the Head & Shoulders formation.
USD is consolidating near its high this morning. The Cycles Model suggests the USD is due for multiple bursts of strength over the next week that may elevate it to the Cycle Top at 100.08. An overshoot may cause pain among the USD shorts.
The Japanese Yen dipped to 63.25 this morning, extending an already long Master Cycle. A reversal may be imminent. The Yen carry trade may be on shaky ground.
Bitcoin may be challenging support at the Intermediate level at 68890.00. A rise back above it may allow the rally to continue. Caution is advised should it remain beneath it.
Crude oil surged higher to 89.61 this morning. WTI has clearly reached its minimum target. But there is a warning not to hang on to the parabola, as it may reverse without warning. The weekly Cycle Top is at 85.00. Should it decline beneath it, the decline may bring tears to those who ran to WTI the past week.
TNX has risen to 47.87 (47.89 in the futures) to challenge the mid-Cycle resistance at 41.82. The last resistance of the series lies at 42.04…the 200-day Moving Average. It may consolidate above the 52-day Moving Average at 41.55 for the time being. However, the Cycles Model suggests a surge in yields may happen this weekend, leaving the final bastion of neutrality at the trendline near 42.50.