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
8:00 am
Good Morning!
SPX futures rose to 7146.50 this morning. Yesterday the SPX closed above the Cycle Top at 7105.64, allowing it to consolidate above it overnight. Should it exceed the prior high, it may continue rising for another 1-2 weeks. While the Cycle has not used its full allotment of time, it has met its price target. So it may consolidate in a tight range until it burns up the remaining time or something breaks the consolidation. Meanwhile, retail is buying the dip (mostly options) while stock buybacks are beginning to open up. The question is, will the money be available to propel it higher?
Today’s options chain shows Max Pain at 7105.00. Long gamma may begin above 7125.00 while short gamma rules beneath 7075.00.
ZeroHedge reports, “The optimism that helped list the S&P on 11 of the prior 12 days, and the Nasdaq on 13 consecutive days until Monday’s modest pullback, is back – because one can apparently draw the same exact event for 3 weeks now – and sending US equity futures higher again on signs that Iran will attend talks with the US, while the US president said it’s “highly unlikely” that he’d extend the truce.”
Premarket VIX is consolidating near yesterday’s low, above mid-Cycle support at 18.33. It remains on a buy signal, which may be an early warning for the SPX.
Tomorrow’s options chain shows Max pain at 19.00. Wguke short gamma resides from 16.00 to 18.00, long gamma starts at 20.00 and shows institutional presence every 5 points to 40.00.
Yesterday’s surge in the TNX from Friday’s low was stopped by Intermediate term resistance at 42.77. The resistance held this morning, leading to a possible pullback. The Cycles Model suggests little activity until the weekend, when strength may return.
USD is consolidating after rising from its Master Cycle low on Friday. The consolidation may not last, as trending strength may return by the end of the week.
Bitcoin is consolidating beneath Friday’s high. While the MC high may be early, there is no clear directionality from the Cycle Model until the end of the month. BTC remains poised between the mid-Cycle resistance at 83703.00 and the 52-day Moving Average at 70831.00.
Gold declined to 4780.00 thus far this morning, beginning a short but sharp decline to the end of the month. The target range may be from 3800.00 to 4000.00. Where is all the selling coming from? It may be central banks selling their gold and buying oil.
Crude oil declined to 85.67 this morning after a lively reversal from Friday’s Master Cycle low. The Cycles Model indicates today as a day of strength, as large institutional purchasers attempt to “lock in” these lower prices. The low price may not last, as buyers may panic into the end of the month.
ZeroHedge observes, “DHL Group CEO Tobias Meyer warned Bloomberg TV earlier this morning that a persistent Gulf energy shock could morph into broader trouble for the global economy.
“Well we have seen this before, that you have recognized by consumers as having an impact that sparks broader discussion, the real economic implications for people. Now, this hasn’t happened yet. We’re trying to prevent that from happening. The 10, 12 million barrels of crude oil per day, it will come to that tipping point. Solutions are needed and political momentum is building up to resolve the situation in the Strait of Hormuz,” Meyer said.”
The Ag Index may have a week left in its Master Cycle to prove itself. During that week it may challenge the potential Head & Shoulders neckline near 377.00. A rise above it may trigger that formation. The Ag Index has a close correlation to the oil index, as two inputs are vital to the production of food, fuel and fertilizer. While investors have been chasing AI, the Ag (FOOD) Index has been quietly building a base for a powerful breakout.
ZeroHedge posits, “Pablo Galante Escobar, the head of liquefied natural gas (LNG) at Vitol, warned the audience at the FT Commodities Summit earlier today that the “world is on borrowed time” and that the Gulf energy shock will develop into a food crisis unless LNG flows resume through the Hormuz chokepoint.”
ZeroHedge comments, “We might want to listen to what the farmers are telling us, because if they don’t grow our food we do not eat. Coming into this year, we were already facing the worst farming crisis in America in at least 50 years. Farmers all over the nation are drowning in debt, and farm bankruptcies have been soaring. In all my years, I have never seen America’s farmers so angry, and now the crisis in the Strait of Hormuz has made things much worse. Spring planting season is here and there is a global scramble for whatever supplies of nitrogen fertilizer that happen to be available. As a result, prices have skyrocketed and farmers all over the planet are facing some incredibly tough choices.”