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
12:34 pm
The Agriculture Index is closing in on its Master Cycle high which won’t be finalized until the reversal takes place. However, it leaves us with a potential Head & Shoulders formation that spells opportunity for those seeking diversification. The Cycles Model suggests a possible month-long pullback before the new trend is underway.
ZeroHedge remarks, “Some of the worst drought conditions in a generation are plaguing America’s breadbasket just as spring planting season gets underway. Institutional desks, including UBS, have ramped up warnings about drought, fertilizer shortages, and what these current-day issues could morph into for the food supply chain later this year.”
11:15 am
SPX has broken beneath daily support at 7130.00 and 1-month support in the 2-hour chart. A sell signal has been created that should not be ignored, especially since the next visible supports are near 6800.00.
8:15 am
Good Morning!
SPX futures declined to 7133.10 on news of Open AI’s miss. This strikes a cautionary note, since the Cycle Top support lies at 7130.00, beneath which is an aggressive sell signal. The current Master Cycle has run its course, meeting time and price targets. The formation is a complex Ending diagonal that doesn’t like to share its secrets. However, the Cycles Model for the SPX may be complete.
Today’s options chain shows Max Pain at 7165.00. Long gamma may begin above 7200.00. Short gamma strengthens beneath 7125.00.
NDX futures reversed down to 26931.00 this morning. Critical support (Cycle Top) lies at 26614.00. Breaking the Cycle Top gives a strong sell signal. While more than 42% of the SPX reports earnings this week, Wednesday may be the most concentrated earnings session with 4 of the Mag 7 reporting. Hedge funds are selling while CTAs have quit buying semiconductors while investors are still chasing the only thing left that is rising.
ZeroHedge muses, “If the AI buildout has overshot the mark, the first warning signs won’t look like a crash. They’ll look like missed revenue targets, nervous lenders, delayed data center deals, and executives suddenly discovering cost discipline after years of promising limitless demand.”
VIX futures bounced from yesterday’s low to 16.42 this morning, crossing above mid-Cycle resistance, offering a buy signal. The VIX, which tracks the SPX is subdued, not reflecting the large moves being made in individual stocks. This week’s earnings may pop the cork in the VIX.
Tomorrow’s VIX options chain shows no short gamma. Long gamma starts at 18.00 and calls dominate the chain up to 35.00.
TNX broke out above 43.50 this morning, offering a caution to bond investors and stocks that are interest rate sensitive. The Cycles Model suggests rising yields may dominate the scene for another month. The calm in yields may be broken after a brief consolidation as the 10-year rises toward the neckline and the 30-year approaches 5%.
Zerohedge reports, “After a mediocre 2Y auction to start the week’s coupon issuance this morning, moments ago the Treasury sold 5Y notes in another average auction.
The sale of $70BN in 5 Year paper stopped at a high yield of 3.955%, down fractionally from 3.980% last month, and tailing the When Issued 3.950% by 0.5bps. This was an improvement from last month’s 1.4bps tail, but more concerningly this was the 11th tail in a row for 5Y issues.”
USD has also broken its calm as it pulls back beneath the 52-day Moving Average from yesterday’s spike high. The USD remains above the mid-Cycle support at 98.55, which may offer a base from which to spring higher. Dollar shorts are getting nervous. Record dollar demand isn’t letting the USD fall.
ZeroHedge comments, “Open any finance corner of social media this week, and you will be hit with some version of the same obituary. ZeroHedge declared in December that the dollar’s death in 2026 is now a mainstream talking point, citing a WIRED piece arguing that this is the year “dollar dilution” truly accelerates.”
Bitcoin continues to pull away from the former Head &Shoulders neckline as it may re-establish its downtrend. The Cycles Model suggests the pace of the decline may pick up with the month of May possibly being an unmitigated disaster for BTC. Critical support lies at the 52-day Moving Average at 71777.00.
Crude oil broke 100.00 again as it topped out at 101.85 thus far today. Today’s breakout may generate a panic among the oil importing countries as they attempt to “lock in” today’s price. The Cycle Model suggests an outright panic may develop over the next few days. The Straits just cannot be opened soon enough.
ZeroHedge observes. “US Energy Secretary Chris Wright said that not all mines placed by Iran in the Strait of Hormuz need to removed for ships to resume transiting the vital passageway: “You just need a pathway for ships to be moved in and out,” Wright said in an interview on the sidelines of the Three Seas Summit and Business Forum in Dubrovnik. “I think that can happen quickly” he added suggesting that a restart can happen far sooner than the full demining timeline.”
Gold declined to 4554.91 thus far today as large sales of gold are being made to allay the potential panic of rising oil prices. Gold is nearing its potential Master Cycle low and may turn sooner than indicated earlier. The mid-Cycle support at 4312.00 may be a reversal point.