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
7:30 am
Good Morning! An abbreviated comment. I’ll be back mid-morning.
SPX futures consolidated after making a nearly 10% round trip, including the futures. Options are playing a big part of the price action, if not total control. Note from yesterday’s report that options Max Pain (least payout by dealers) was at 6800. This could only be done on low volume, as retail flows, although positive, could not make up the power to rebound that strongly and hedge funds are net bearish. The decline identifies as a Leading Diagonal, which may have yet another decline to complete it. The Head & Shoulders formation is still active. Commerciale traders are set to sell in large amounts. Short gamma, beneath 6750.00, is being favored. Recall that the 52-day Moving Average is at 6899.00. Short term support is at 6770.00, then again at 6750.00.
Today’s options chain shows Max Pain at 6755.00. Long gamma becomes strong above 6800.00 while short gamma can be found beneath 6750.00.
ZeroHedge reports, “S&P futures are unchanged this morning, but approaching session low, following Trump comments that appeared to be the first signs of an off-ramp which however were followed by renewed fighting in the Middle East.”
The premarket VIX revisited the Cycle Top support at 22.95 by declining to 22.93 this morning. The fear levels have moderated, but the Cycles Model suggests more rally to come. Intensity may take some time to rise, but next week looks promising.
Tomorrow’s options chain shows Max Pain rising to 23.00 after yesterday’s debacle. Short gamma is strongest between 19.00 and 20.00. Long gamma is strongest between 24.00 and 34.00. The outer reaches of long gamma have pulled back.
TNX is testing the possible lower limits of it retracement this morning. A rally to challenge the 200-day Moving Average at 42.00 may be developing, with a possible probe to the trendline near 42.50. Increasing strength may accompany this probe with a potential breakout looming in the next week.
USD paid a visit to the 200-day Moving Average at 98.34 this morning, declining to 98.49. After a nod to this support, it may be ready to probe higher with the Cycle Top at 100.08 in sight. A breakout above that level may first offer a correction to the 52-day Moving Average at 98.01, then a probe to much higher levels as dollar shorts must painfully exit.
Bitcoin may have taken a turn for the worse. after reversing at 71301.00 this morning. A decline beneath Intermediate support at 67916.00 may offer a sell signal. Further support lies at 61725.00, the 43-week mid-Cycle support. A decline beneath it may cause Bitcoin to continue its decline to 30.00. The Cycles Model suggests the decline may continue to the end of April.
Silver rose to 90.37 this morning, remaining beneath the Cycle top at 96.32. It continues to be in a corrective mode. The decline may come back with a vengeance toward the end of the week, possibly declining to the mid-Cycle support at 56.24.
Crude oil dropped to a morning low at 83.47, erasing approximately two-thirds of this weekend’s parabolic spike. While crude may fall as far as the Cycle Top support at 73.66, it may begin another parabolic rise. Should crude rise above the current high, the weekly charts show a possible Head & Shoulders formation with a minimum target of 184.00. This would bring chaos to the worldwide economy.