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”
9:15 am
Good Morning!
SPX futures declined to 6600.00 before bouncing at round number support as optimism about progress in the Middle East fades. It has been 100 days since the tech peak, 57 days since the broader SPX peaked. The turmoil under the surface has been awful, yet the SPX has only declined (at yesterday’s close) less than 6%. Volatility has been suppressed, keeping the fear factor relatively low. Single stock liquidity has all but disappeared, inducing hedge funds to use broader-based ETFs to make their moves. Investors may be having doubts about being long into the weekend. Are things about to change?
Today’s options chain shows Max Pain at 6610.00. Long gamma dominates above 6625.00 while short gamma gains a clear advantage beneath 6580.00.
ZeroHedge reports, “It’s Day 27 of the war: stocks and bonds fell globally as ceasefire optimism fades given mixed messages on progress toward ending the war in Iran and growing uncertainty over Iran’s willingness to engage in talks about a ceasefire in the Middle East sent oil prices higher.”
The premarket VIX rose to 27.84 this morning as VIX resumes its rally with the neckline of the head & Shoulders formation in view. The Cycles Model shows the VIX rising in strength over the next two weeks.
The April 1 options chain shows Max Pain at 21.00. Short gamma has a wall of puts at 20.00 while the call walls are at 25.00, 28.00 and 40.00.
The US 10-year Bond Yield bounced from the neckline to 43.94 this morning as it consolidates the gains leading to last week’s breakout. It is likely to test the neckline today before resuming its rally. The Cycles Model suggests a burst of volatility tomorrow that either drives the TBX beneath the neckline or above the Cycle Top. The sword of Damocles hangs above this sector.
ZeroHedge reports, “Another day, another very ugly auction.
After yesterday’s appallingly bad 2Y auction, moments ago the Treasury sold $70BN in 5Y paper in what was another terrible auction.
Just after 1pm, the auction stopped at a high yield of 3.966%, up from 3.608% in February and the highest since May 2025. It also tailed the When Issued 3.966% by 1.4bps, the biggest tail since Oct 2024.”
2:00 pm
ZeroHedge reports, “After two “terrible” coupon auctions earlier this week, moments ago the Treasury concluded the week’s final auction when it sold $44 billion in 7 Year paper. It may not have been quite as terrible as the previous two, but it wasn’t much stronger either.”
The US Dollar may be resuming its upward trend this morning as trending strength may take over this weekend and early next week. The Cycles Model allows another three weeks of rally before a pullback. Dollar shorts may be taken behind the woodshed.
Bitcoin is testing the 52-day Moving Average at 69097.00 this morning. A breakdown from there may catch the hopeful bulls off guard. The Cycles Model calls for a potential panic decline as Bitcoin slips away from support. In addition, the Cycles Model suggests the month of April may not be kind to Bitcoin.
Crude oil rose to 94.83 this morning as its consolidates beneath the retracement high. The Cycles Model suggests the decline may continue to mid-April, but it could be short-circuited in another week. The 52-day Moving Average at 72.07 may offer a support for the decline.
Silver rose to 72.38 this morning before easing back down to 67.10. There may be a week or more of decline until it hits bottom. A likely spot may be near 45.00.
Gold is consolidating with a likely turn to a further decline. Should the decline continue, it may reach 3600.00-3800.00.
ZeroHedge explains, “There has been much speculation about the mystery seller(s) that sent gold sliding into a bear market from its January high: was it a sovereign seeking to plug holes in their budget from the recent surge in oil, a “market maker” trying to spark stop loss liquidations, or just retail investors taking profit after one of the best years in history for the precious metal?”