The Practical Investor

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.

10:44 am

BKX challenged its Intermediate resistance at 141.07 yesterday, then slipped beneath it this morning, reiterating its sell signal.  There may be a week left in the current Master Cycle, allowing BKX to test the 50-day Moving Average at 136.65.

8:25 am

Good Morning!

SPX futures rose to 6350.09, slightly above the 61,8% Fibonacci retracement value at 6344.37.  It is likely that the SPX daily session may open above yesterday’s close.  However, the fractal pattern suggests a turn down shortly after the open.  A decline beneath Friday’s low at 6212.69 may bring about a potential waterfall decline to 6000.00.  Recognition of a break in the trend occurs at the 50-day Moving Average currently at 6129.88.  Until then, buying the dip may be encouraged.

Today’s options chain shows Max Pain at 6320.00.  Long gamma gets a big boost at 6350.00, while short gamma goes large beneath 6300.00.

ZeroHedge reports, “Risk is mostly higher again this morning, last Friday’s selloff long forgotten, with equity futures and macro credit opening stronger while the yield curve is bear flattening as rates sell off across the curve, and the USD is higher. As of 8:00am ET, S&P futures are up 0.3%, led by small caps, pointing to further squeeze potential from shorts put on as recently as Friday; Nasdaq futures gained 0.4% as Palantir’s blowout earnings beat and commentary added more fuel to the AI trade. Pre-market, semis are standing out with Mag7 names higher; Industrials are leading Cyclicals over Defensives. Staples are in the red as the market continues to buy most dips/anything AI related along with squeezing shorts (GS Most Short Rolling +3.9% yday). Trade tensions ratchet higher as geopolitics enter the debate. According to Goldman, along with rising rate-cut bets, there are enough positive drivers to outweigh lingering concerns about tariffs, with India becoming the latest target in Trump’s trade war. Overnight, Fed non-voter Daly said that she would “lean to thinking that every meeting going forward is a live meeting” given the softness in the labor market and no signs of persistent tariff-driven inflation. On the trade front, Swiss President Keller-Sutter and other Swiss officials, in addition to Japan’s trade chief, will travel to the US for separate trade talks. Looking ahead today, the President will speak on CNBC “Squawk Box” at 8am ET. Data wise, we have trade balance, and ISM services. We got better S&P Global Services PMIs out of China (52.6 vs cons 50.4) and Japan (53.6 vs cons 53.5) while Europe was more mixed as UK, Germany, Spain beat but France and Italy missed. There are no scheduled Fed speakers.”

VIX futures are testing Intermediate support at 17.13 this morning.  A rise above the 50-day Moving Average at 17.67 reinforces the buy signal.  VIX is forming a fractal that may take it to the Cycle Top at 31.43 in short order.  Should it do so by the end of the week, the Cycles Model suggests a possible explosion of volatility in the following week.

Tomorrow’s options chain shows massive short gamma between 15.00 and 17.00.  Long gamma begins at 18.00 and extends to 30.00, without a lot of conviction.

TNX may be emerging from its master Cycle low on Monday, on day 262.  The alternate view may be a quick dip lower before reversing.  Time is running out on the old Master Cycle, but the Cycle Bottom at 41.11 may still hold some attraction.    Once the rates begin to rise in earnest, we may see the Head & Shoulders formation influence rates over the next three months.  The rise in the 10-year Treasury rate may be an influence in the housing market.  See below.

ZeroHedge remarks, “Lance Lambert, co-founder and editor of ResiClub, posted on X, highlighting an ongoing and record-breaking trend in the housing market: sellers now outnumber buyers by the widest margin since Redfin data began well over a decade ago. The growing number of sellers is especially evident in the U.S. Southwest and U.S. Southeast, particularly in Texas and Florida, where the balance of power has shifted in favor of buyers. ”

USD futures hit a low of 98.38 in the overnight session, testing the 50-day Moving Average at 98.33.  It may go lower, as the Intermediate support lies at 98.02.  USD may be in a correction mode until the end of the week.  Once completed, the uptrend may resume in strength.

The Japanese Yen emerged from its Master Cycle low with strength on Friday, giving pause to those who are involved in the carry trade.  The 50-day Moving Average lies at 68.62.  The Cycles Model suggests that another surge may be imminent which may set off alarms in the carry trade, as currency fluctuations may more than offset the low interest rates charged by the Bank of Japan.

Bitcoin has found support at the 50-day Moving Average at 112221.00 and may be capable of making a new all-time high, according to the Cycles Model.  There is a possible open window lasting another week to do so.

Gold futures are threatening a potential breakout above its previous high, having reached a high at 3437.40 this morning.  The Cycles Model suggests another week of potential rally to the Cycle Top resistance at 3602.79.

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.

8:33 am

Good Morning!

SPX peaked on Thursday and made an immediate sell signal by crossing beneath the Ending Diagonal trendline.  Friday’s aftermath was to be expected.  This morning’s bounce in the SPX futures has open gap resistance at 6296.79 and may not cross above it for any period of time.  The next move may be a further decline to test the 50-day Moving Average at 6122.84, which may hold, at least temporarily.  Should it break through the 50-day , the SPX may then decline to round number support near 6000.00.  The Cycles Model has given a trending strength indicator that may affect the decline over the next day or two.

Today’s options chain shows Max Pain near 6260.00.  Long gamma strengthend near 6290.00 while short gamma rules beneath 6200.00.

ZeroHedge reports, “Futures are higher as markets rebound from last week’s sell-off amid increased expectations the Fed will ride to the rescue with rate cuts following Friday’s dismal US jobs data. As of 7:45am ET, S&P 500 and Nasdaq futures climbed 0.7% after the index had its biggest decline since May on Friday. Pre-market, Mag7 and Semis are outperforming with Cyclicals over Defensives. Bond yields are 2-3bp higher as the USD falls again. Commodities are weaker with Energy underperforming as OPEC+ approves another supply hike. This is a catalyst-light week with tomorrow’s ISM the most important and heightened focus on weekly claims with the Fed spotlighting the unemployment rate.”

VIX futures declined to a low of 18.87 after having crossed above  the 50-day, the declining Wedge trendline and the mid-Cycle resistance at 19.44, creating a strong buy signal as volatility reawakens.

The Augus6 options chain shows Max Pain at 18.00.  Short gamma still resides between 15.00-17.00.  Long gamma may begin at 20.00, but tapers off above 30.00, suggesting little conviction in hedging, yet.

ZeroHedge notes, “After a long period of “complacency” in the market, volatility finally returned on Friday, dropping more than 1%. As we noted Friday morning, before the market opened:

“While stretches have previously been longer, a consideration of such an event is that low volatility tends to beget high volatility. These “buying stampedes” typically last on average about 15 trading days, so at 25 and counting, we are certainly pushing a more extended duration.””

TNX is consolidating near 42.00.  This suggests a final probe to the Cycle Bottom at 41.12, completing the Master Cycle in the next few days.  A possible bottom on August 11.

After a nearly 5-month consolidation, gold futures have broken out above its most recent high, reaching 3439.32 this morning.  The Cycles Model anticipates a week or longer of rally, possibly aiming for the Cycle Top near 3600.00, or much higher, depending on world events.  It is on a buy signal.

Crude oil futures challenged the 50-day Moving Average at 66.21, then bounced above it, hovering beneath the mid-Cycle resistance at 67.96.  Rising above that level reaffirms the buy signal in place since May.  The Cycles Model indicates a continued rise in the price of oil through the first week of September, likely validating the Head & Shoulders formation.

ZeroHedge observes, “President Trump switched his attention from the domestic jobs figures to the price of oil this morning with a Truth Social post that lambasts India for their dealings with Russia:

“India is not only buying massive amounts of Russian Oil, they are then, for much of the Oil purchased, selling it on the Open Market for big profits.”

Then Trump made the threats:

They don’t care how many people in Ukraine are being killed by the Russian War Machine.

Because of this, I will be substantially raising the Tariff paid by India to the USA.

Thank you for your attention to this matter!!! President DJT

And oil prices spiked on the news…”

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.

1:45 pm

SPX has crossed beneath the diagonal trendline near 6380.00 and yesterday’s low at 6375.79, qualifying for a sell signal, although a shallow one.  The break of an Ending Diagonal brings the possibility of a complete retracement to the April 7 low.  The VIX has also reversed out of its Master Cycle low today, giving further confirmation.  Have a good week!

8:00 am

Note:  I will be leaving for a week-long sabbatical tomorrow.

Good Morning!

SPX futures are trading in a narrow range between 6391.00 and 6410.00 this morning.  Having met round number resistance at 6400.00, investors may attempt to leapfrog over that level.  However, fractal resistance is at 6416.00, while the Cycle Top awaits at 6425.00.  These are behavioral constructs that suggest new buyers may not be waiting above those levels.   In addition, high hopes of the FOMC announcing rate cuts at tomorrow’s press conference may be dashed.  The Cycles Model suggests an imminent reversal, perhaps at the FOMC announcement with a possible three-week decline with strength.

Today’s options chain shows Max Pain at 6385.00.  Long gamma resides above 6400.00 while short gamma awaits beneath 6350.00.

ZeroHedge reports, “US equity futures are up again, and set for a 7th consecutive record high into a heavy earnings day and ahead of tomorrow’s Fed decision as attention turns from trade deals to company results and economic data to justify nosebleed valuations. As of 8:00am, S&P futures are 0.2% higher after the index hit its latest record high on Monday; tech is outperforming again and Nasdaq 100 contracts up 0.5%. In pre-market trading, Mag7, Semis, and Cyclicals are outperforming. Bond yields are lower (10Y yield at 4.3919%, down 2bps) as the USD rally is poised to continue after the dollar climbed to its strongest level in more than five weeks on speculation a slew of readings on the economy will show the tariff impact is contained. Commodities are mixed with energy leading on US / RU geopolitics. The macro data focus today includes JOLTS, Housing Prices, regional Fed activity indicators, trade data, inventories, and consumer confidence.”

VIX futures have made a new low at 14.70 this morning, clearly showing no concern for risk in equities.  Both time and price have been stretched in this Master Cycle.  However, the declining wedge warns of a snap-back to the April high.

Tomorrow’s options chain shows heavy negative gamma at 15.00 – 16.00.  Long gamma may rebound above 22.00.

TNX is testing the 200-day Moving Average at 43.75 this morning.  The Cycles Model shows there may be serious pressure on the 10-year today.  Support may lie at the July 22 low at 43.28.  While the Chinese continue to sell treasuries, the Treasury announced a surge in borrowing in the third quarter.

ZeroHedge remarks, “Earlier this afternoon, we wrote in our Treasury refunding preview that the Treasury’s latest borrowing estimate published today (which is also part 1 of the Refunding statement), would show a surge in current quarter funding needs by over $400 billion, from $554 billion to $960 billion.

It was short by almost $50 billion. We found that out moments ago when the Treasury published its estimate for marketable borrowing needs for the July-September 2025 and October-December 2025 quarters. ”

The USD broke above its declining wedge at 98.50, showing a change in trend and a confirmed buy signal above the 50-day Moving Average at 98.38.  The Cycles Model shows a very strong surge higher over the next week or more.  Dollar shorts are now in the crosshairs, as a probable target may be the mid-Cycle resistance at 103.31.

The Japanese yen may be retesting the mid-Cycle support at 66.97 today.  Should that be so, the Master Cycle may be stretched a bit more.  However, it may subsequently explode significantly higher as the uptrend reasserts itself.  Those in the Yen carry trade who have become comfortable with the past four months of sideways motion find the pain of a rising borrowed currency may become acute.

ZeroHedge observes, “As Trump publicly dressed down Powell during a Fed facility tour, markets watched in disbelief. But behind the cringe-worthy optics lies a deeper crisis: global yields are surging, and Japan—yes, Japan—is the canary in the coal mine. “Watch JGB yields every morning,” warns Peter Boockvar, as the BOJ loses control amid rising inflation and political fallout.”

Bitcoin is in the final throes of its all-time high above 123200.00. With it may come the end of the current Master Cycle, due to make its reversal this week.  Keep an eye  on the action, as the reversal may be swift and deep.  The Cycles Model suggests the month of August may be a complete washout.

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 us8:00from evil.  Amen.

8:00 am

Good Morning!

I have been able to recover my charts, but for an unknown duration.  Tuesday may be my last day of commentary, as I will be taking a week-long sabbatical on Wednesday.

SPX futures rose to 6423.30 over the weekend, but has declined thereafter, testing round number support at 6400.00 as I write.  Over the weekend it has tested the Cycle Top resistance at 6417.40.  I had previously mentioned a fractal target at 6416.000 last week.  Thus the SPX has met fractal equality and the Cycle Top simultaneously.  A decline beneath 6400.00 offers an aggressive sell signal while a further decline beneath the diagonal trendline at 6350.00 breaks the uptrend.  The 50-day Moving Average at 6080.00is where recognition is made that, should the SPX decline beneath it, a widely recognized sell signal may be found.

Today’s action may produce a new all-time high, followed by a reversal.  Otherwise, Friday’s daytime high at 6395.82 may serve as the official all-time high, should the SPX break beneath 6400.00 this morning.  The Cycles Model shows a possible drift lower, but may remain steady until the week of August 10.  This may encourage speculators to go all-in for a short period of time.  The question is, “Who will buy at the all-time-highs?”

Today’s options chain shows Max Pain at 6385.00.  Long gamma may prevail above 6390.00 while short gamma resides beneath 6350.00, where the trendline may be crossed.

ZeroHedge reports, “Another day, another all time high.

US equity futures and global markets are at a fresh all time high (but the gains are fading) on a trade-induced, global risk-on rally, sparked by Sunday’s US/EU deal for 15% tariffs on European exports to the US, while we also learned that US/China will extend the trade truce by 90-days as they resume negotiations today. As of 8:00am ET, S&P futures are  up 0.2%, well off session highs, while Nasdaq futures gain 0.3%. Pre-market, all Mag7 names are higher with semis outperforming. Cyclicals are poised to outperform, led by Fins/Industrials. Bond yields are up 1bp, reversing an earlier drop, as the USD appreciates on the back of a slide in the euro and yen. Commodities are mixed with crude higher, natgas lower, precious metals flat, base metals down, and Ags mixed. Today’s macro data is light with on Dallas Fed Mfg Activity but it’s a crazy busy week with the Fed decision on deck, 38% of all companies reporting, the jobs report on Friday and much more (full preview coming).”

VIX futures may be coming off their Master Cycle low on Friday at 14.92.  Futures have consolidated between 15.11 and 15.29, showing possible strength in the new trend.  VIX may consolidate beneath the 50-day Moving Average at 17.84 for the next two weeks.  The declining wedge trendline lies at 19.00, above which a new uptrend is begun.

TNX consolidated between 43.67 and 44.31 over the weekend.  A show of strength may be imminent which may allow TNX to break above its consolidation.  Should that occur, the neckline at 49.00 may be tested.  The Cycles Model suggests a continued rally in rates through the end of September.

USD futures are testing the 50-day Moving Average at 98.41 this morning.  The Cycles Model suggests this may only be a test and not a breakout.  There are approximately 2 weeks left in the current Master Cycle, which may test the lower trendline near 96.00.  Should it break above the 50-day a new uptrend may be found.  However, the current trend is still down.

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.

8:15 am

Dear Readers,

In the past few days I have been informed that StockCharts will no longer support their old methodologies.  Instead, they have encouraged me to convert to the new workbench.  Unfortunately, I have lost all my work on the old system and cannot retrieve charts from the new system for the newsletter.  I am afraid I am at a loss until an alternative may be found, since I cannot talk directly with their experts.  I am sorely disappointed in their action.

Sincerely,

Tony

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!

SPX futures reached a new all-time high at 6371.00 this morning.  While on its final probe, it may reach the Cycle Top resistance currently at 6401.47.  There is potential fractal resistance at 6416.00.  Today is day 279 in a very stretched Master Cycle, 21 days beyond the standard length of a Master Cycle.   The Cycles Model remains quiescent, allowing the stretch to continue…until it becomes completely exhausted.  Retail investors are all-in, with increasing leverage, owning 70% of the options in calls, with a heavy emphasis on 0DTE.   There seems to be no urge to take profits.  Suddenly they will find there are no buyers.  Hedge funds are increasingly short.

Today’s options chain shows Max Pain at 6340.00.  Long gamma may prevail above 6360.00 while short gamma lies beneath 6325.00.

ZeroHedge reports, “Global stocks extended their rally to fresh record highs on the prospect of more trade deals with the US, easing fears of a drawn-out tariff war while US equity futures are also higher led by Tech with small caps lower after yesterday’s outperformance, as sentiment was boosted by Alphabet signaling strong demand for its AI products, while Tesla posted the biggest revenue decline in at least a decade. As of 8:00am, S&P futures are 0.1% higher and Nasdaq futs gain 0.3% with the AI theme driving Tech following GOOG earnings with $10 billlion capex boost helping lift other AI infrastructure stocks in premarket trading, including NVDA and AVGO. Tesla slumped 6% after Elon Musk warned of difficult times ahead after losing electric vehicle incentives in the US. Cyclicals are stronger pre-market led by Industrials. Bond yields are 1bp from 2s to 30s with USD seeing its first bid in 5 sessions. Commodities are also higher led by Ags/Energy with weakness in both Base and Precious metals. Today’s macro data focus is on Flash PMIs, Jobless Claims, Home Sales, and regional Fed activity indicators.”

VIX futures have declined to a morning low of 15.18, extending the Master Cycle low to day 266.  The Cycles Model is suddenly becoming active, starting tomorrow, with trending strength powering up over the weekend.  A breakout above the wedge formation at 19.00 may be anticipated by the end of the weekend.  Once launched, the new trend may continue to the end of August.

Todays’ options chain shows Max Pain at 17.00.  Short gamma has a weak showing at 16.00 while long gamma is bursting at the seams at 22.00.  Hedging drops off above 26.00.

TNX rallied above its 50-day Moving Average at 44.11 this morning , creating a buy signal.  While a few analysts recognize the importance of the 50-day, most investors may not react until TNX breaks out above its recent highs at 44.93.    The Cycles Model may reinforce the buy signal over the weekend with a singular burst of energy, followed up with another a showing of trending strength by mid-week.  The prevailing belief that the Fed may allow 100 bp cuts by the end of the year  may be chalked up as wishful thinking.

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

StockCharts has updated their systems, but has left the old methods in the dust without warning.  I am trying to restore my research on the new system, but it may take a while, as I am still learning the new stuff.  Please bear with me as I fumble through the conversion process.  It may take a while.

Good Morning!

SPX futures have risen to 6337.90 in the overnight session, then settled back in a consolidation.  The Monday high at 6336.08 remains the all-time high.  Speculation is rife, with 70% of trading volume in call options.  Snake charmers have a better chance of survival than most speculators at this point.  The Cycles Model is at its tipping point.  A decline beneath yesterday’s low at 6281.71 may bring a reversal/sell signal.  The next levels of support lie at 6200.00, then at 6135.00 .  The most commonly used sell signal lies beneath the 50-day Moving Average at 6039.03, nearly 5% beneath the peak.

Today’s options chain shows Max Pain at 6315.00.  Long gamma becomes an issue above 6325.00 while short gamma strengthens beneath 6300.00.  This market may  be susceptible to explosive moves in either direction.

VIX futures declined to 15.94, testing the “floor.”  This is not a time to kick back and go to the beach.  The Cycles Model suggests the VIX may break out above the 50-day Moving Average at 18.24 and the declining wedge formation near 19.00 by the weekend.

TNX futures declined to 43.54, challenging the 200-day Moving Average at 43.67.  it has since risen above it and may challenge the 50-day Moving Average at 44.09.  Should it rise above the 50-day, a buy signal (sell signal for UST) may be made.  This may launch a powerful rally lasting to the end of September in TNX.  The betting in the market is that Powell may make an early exit, with rates falling 100 bps or more by December.  That may be wishful thinking.

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.

7:50 am

SPX futures are consolidating in a very narrow range, between 6299.00 and 6315.00.  The buyback window is opening again, suggesting corporate buyers may be returning.  Retail flows are strong.  However, they are showing a propensity toward 0DTE options, with retail behavior becoming more and more speculative.  This is a sign of an aging bull market, with investors increasingly using leverage to boost potential returns…and potential losses.  Meanwhile, hedge funds are becoming increasingly bearish.

The Cycles Model remains calm, on day 277 of the Master Cycle.  The rising trendline is at 6270.00 – 6275.00.  A potential sell signal lies beneath it.  However, only a few analysts will not recognize it until the SPX declines beneath 6200.00.  Most analysts are likely to view the 50-day Moving Average at 6025.51 as the focal point of a potential sell signal.  Meanwhile, the speculative mania may continue until serious losses set in.

Today’s options chain shows Max Pain at 6315.00.  Long gamma may begin above 6350.00 while short gamma may exist beneath 6250.00.

VIX futures rose to 17.00 this morning.  Overhead resistance is at 18.17 – 18.50.  The VIX-on-the-floor is supportive of equities for the time being.  However, volatility picks up at the end of the week and accelerates into mid-August.

The July 23 options chain shows Max Pain at 17.00.  Short gamma resides between 14.00 and 16.00.  Long gamma resides between 19.00 and 30.00.

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!

SPX futures rose to a new high at 6316.60 this morning.  It has since pulled back near the high.  Since the April 7 low, the SPX has rallied 1480 points, a 30.61% return in that 102 days.  This may be called a Teflon rally, since it defied all expectations.  Many are calling for the rally to continue.  The Cycles Model has no anticipation of big moves for the balance of July. However, the rally has all the earmarks of exhaustion.  In addition, NATO is beating the drums of war and we will not be exempt.

Today’s options chain shows Max Pain at 6295.00.  Long gamma may begin above 6300.00 and stretches to 6400.00.  Short gamma begins beneath 6260 and has a long tail, as well.

ZeroHedge reports, “US equity futures are higher and approaching a new record high. Over the weekend, headlines were relatively muted in the US, while globally, Japan’s ruling party lost its majority in the upper house, but PM Ishiba still pledged to stay in office in a creeping setup for the latest Japanese political crisis. While the yen has rallied overnight after Japan’s ruling coalition loses its majority in the upper house election, this appears to be a kneejerk reaction with Japanese markets closed today; expect much more weakness for the JPY as Japan now opens the fiscal stimulus floodgates forcing the BOJ to monetize much more Japanese debt. As of 8:00am ET, S&P and Nasdaq futures are both up 0.2% and Europe’s Stoxx 600 Index posted small moves. In premarket trading Mag 7 shares are higher: TSLA (+1.6%) leading gains, followed by GOOGL (+0.9%) and META (+0.6%); the only exception is Microsoft which was down 0.2% after a cyberattack. Utilities and Consumer Discretionary are outperforming. The yen strengthened 0.7% while the dollar slipped. After last week’s selloff, Treasuries  yields are lower: 2-, 5-, 10-, 30yr yields are 2bp, 3bp, 4bp lower. Commodities are mixed with base and precious metals higher and oil lower.

VIX futures have risen to 16.99 over the weekend.  This is a good time to accumulate hedges, as VIX is quite inexpensive compared to the elevated values in the SPX.

USD futures have declined to 97.71 this morning and may continue to the trendline at 97.00.  USD shorts may be heaving a sigh of relief, as the USD was turned back at the 50-day Moving Average.  However, USD may hit a patch of volatility by the weekend, positioning it to rally higher afterwards.

TNX has declined to test the 200-day Moving Average at 43.61 this morning.  It may languish there for the balance of the week, but there is a disturbance in the force that may reveal itself this weekend.

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.

7:50 am

Good Morning!

SPX futures ar hovering between 6299.00 and 6317.00 this morning, in anticipation of $2.8 trillion of notional options expiring today.  Currently the sentiment is pretty evenly divided between puts and calls with 6300.00 in dead center.  The Cycles Model does not anticipate any big moves in either direction.  However, the wild card may be the high percentage of 0DTE players awaiting on the sidelines.  Calls fall off precipitously above 6350.00, while the puts may be the land mine.  There is a worry about a major shift in gamma exposure.

Today’s morning options chain shows Max Pain at 6300.00.  Long gamma resides from 6315.00 to 6350.00.  Short gamma starts at 6260.00 with a long tail lower.

ZeroHedge reports, “US equity futures are flat even as the global equity rally extended into Europe, following Friday’s gains in Asia and Thursday’s record close on Wall Street. As of 8:00am, S&P futures are unchanged while Nasdaq 100 futures rise 0.1% after NFLX had a solid report, but market reactions were muted amid high expectations. Europe’s Stoxx 600 initially rose 0.4% but has since erased gains, with Energy stocks outperforming and tracking a two-day advance in oil prices as Brent crude futures climb 1.2% to above $70 per barrel. Pre-market in the US, megacap tech sees NVDA up modestly (+0.4%), followed by AAPL and GOOGL. Consumer Staples and Financials are outperforming. The dollar and 2Y rates dropped after Fed Governor Christopher Waller repeated his recent view that the Fed should cut 25bps this month. Yields are lower and USD is weaker; 2-, 5-, 10-, and 30-year yields are down by 1-2bps. Commodities are mixed, with Oil and Precious Metals higher, while Base Metals are flat. The combined value of cryptoassets soared beyond $4 trillion for the first time, fueled by a surge in Ethereum and momentum from a legislative push to regulate the sector. Looking at today’s calendar, the US economic data slate includes June housing starts (8:30am) and July preliminary University of Michigan sentiment (10am). Fed speaker slate includes only Waller, and Fed officials’ external communications blackout ahead of their July 30 decision starts Saturday”

VIX futures declined to 16.41, testing its “floor.”  The Master Cycle low occurred on July 10 and there is little reason to extend beyond today, if at all.  The Cycles Model anticipates a rally in the VIX lasting to late August.  Trending strength appears next week.  Today is a good day to accumulate shares.

TNX is drifting lower, with the possibility of reaching the 50-da Moving Average at 44.06 today.  There is a volatility ticking time bomb waiting today.  A distinct possibility may be a phase reversal, which may allow the TNX to go much higher.  Should it do so, TNX may be on the ascendancy through mid-September.

USD futures are pulling back to test Intermediate support at 98.09 or the trendline at or just below 98.00.  The Cycles Model also calls for a powerful move by day’s end, which may allow the USD to launch higher over the next three weeks.

Bitcoin futures are moving higher.  The current trend may last another two weeks, according to the Cycles Model.  Bitcoin is one of the most favored investments in times of stress.  In Europe, the drums of war are beating louder, while the Bank of Japan is in crisis mode this weekend.  There is little wonder that Bitcoin is going higher.