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.

11:48 am

SPX has tested round number support at 6000.00 and bounced.  Provided it does not bounce above its morning high at 6024.00, a decline beneath 6000.00 will also cross the trendline, causing a sell signal.  The nearest support after that is Intermediate support at 5895.00, which may confirm the signal.  Overhead resistance at 6020.00is still valid.

12:08 pm

SPX is going higher, but may have a limit near 6040.00.  If correct, brace yourselves for a Key Reversal.

8:00 am

Good Morning!

SPX futures rose to 6035.20, then eased back to yesterday’s close.  Should the cash market “catch up” to the futures, we may see the SPX approaching its next target at 6050.00.  However, there is an even chance that the rally may fail to materialize, as the equities markets face exhaustion.  The Cycles Model indicates a terminus may be at hand, expressed by a lack of  bidders.  Today is day 257 of an average 258-day Cycle.  Anything may happen here.

Today’s options chain shows Max Pain at 6000.00.  Long gamma may begin above 6050.00, while short gamma may start beneath 5950.00.  Options are at an impasse.

ZeroHedge reports, “US equity futures are little changed, paring earlier gains along with European stocks, as Commerce Secretary Lutnick says US-China trade talks are “going well” and that they’re expected to go on all day. The bar for an improvement risk appetite appears high after Chinese stocks suddenly fell toward the end of trading day earlier, sparking a broader souring of sentiment. As of 8:00am S&P futures were up 0.1% into today’s trade talks and tomorrow’s CPI print; Nasdaq 100 futures rose 0.1%, with Mag7 names seeing muted returns ex-TSLA which is +3%. Semis/Cyclicals are seeing a bid. The UK’s FTSE 100, however, was poised to close at an all-time high for the first time since March. US/China talks continue for a second day with Bessent empowered to alter US export controls; US/Iran talks are set for Thursday.
US Treasuries extended gains ahead of a $58 billion auction of three-year bonds; the USD is higher into tomorrow’s CPI; commodities are higher led by Ags/Energy. Today’s macro data print is the Small Business Optimism survey, which rose from 95.8 to 98.8, beating expectations of a 96.0 print.”

VIX futures rose to a morning high at 17.79 while Friday’s low remains intact.  The Cycles Model anticipates a potential rally to mid-July in the new Master Cycle.  Meanwhile, the median average S&P 500 short interest is at 6-year highs.  Most analysts consider this as an indicator that equities have room to run higher.  However, this may be due more to recency bias than a look at the big picture.

Tomorrow’s options chain shows Max Pain at 19.00.  Short gamma runs heavy between 16.00 and 18.00.  Long gamma begins at 20.00, but remains spotty above that level.

TNX  is correcting and may decline to Intermediate support at 44.01, or extend to the 50-day Moving Average at 43.59.  However, the window for the correction may be very short, as Trending Strength returns by the end of the week.  TNX is on a buy signal and offers value to intermediate traders as TNX may be due to break out much higher.  Keep an eye on the Treasury auction schedule.

Bitcoin stalled short of its potential rally target of 111000.00.  It may be due to resume its decline imminently.

Japanese Yen futures made a Master Cycle low at 68.87 last night, short of the 50-day Moving Average at 68.35.  The low is approximately a week overdue, so the odds are that a new high may be imminent.  The Yen has appreciated in valu by more than 9.6% since the beginning of the year.  The squeeze is being felt by those utilizing the Yen carry trade to finance their operations.  Several very large hedge funds may be on the verge of blowing up due to their razor-thin margins.

USD futures are hovering above their double bottom low made on June 5.  The Cycles calendar allows a possibly deeper low within the week.  However, should it maintain its elevation, Trending strength may return later this week.  The alternative is a slightly lower decline to the Cycle Bottom may be in order.

Silver futures have broken out above the Lip of the Cup with Handle formation.  What is interesting is that silver is on a different Cycle than gold.  The Cycles Model suggests silver may go higher and longer as the gold Cycle shows weakness.

Crude oil futures rose to 65.77 this morning as it continues on its buy signal above the 50-day Moving Average.  The Cycles Model suggests today may be a day of strength as the current Master Cycle  continues through mid-July.  The possible target may be the Cycle Top at 77.72.

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 remained flat over the week. end beneath Friday’s high at 6016.87 and one of its potential target zone from 6020.00.  SPX may have completed its Master Cycle Friday morning as it had completed a trading (60-day) Cycle from the April 7 low.  The magnitude of both the decline and retracement places them in the category of a Primary Cycle.  The August 5 decline is in the category of an Intermediate Cycle, while most other declines were of the Minor category.  Many analysts consider Friday’s high a breakout without looking at the bigger picture.

Today’s options chain shows Max Pain at 6000.00.  Long gamma kicks in at 6040.00 while short gamma resides beneath 5975.00.

VIX remained above the trendline and appears to have begun its ascent this weekend.  Friday’s low may have completed the Master Cycle.  If not, it may be finished within the next few days.  Market protection is cheap.  The subsequent rally may be on for the records.

Bitcoin has risen to a 61.8% Fibonacci retracement this morning at 107720.00.  While that is a common retracement level, the bounce may go as high as 111000.00 or higher, as this is the first bounce after an all-time high.  But the likelihood of a new all-time high is fading fast.

USD continues to rise out of its Master Cycle low made last Thursday.  No signal is given yet.  We wait for Intermediate resistance at 99.77 or the 50-day Moving Average at 100.36 to be overtaken to have confidence in a buy signal.  The Cycles Model anticipates Trending Strength to rise toward mid-week.  The new Master Cycle may last until August, giving a long-lived rally to the Cycle Top at 110.79.

TNX is consolidating after a strong surge on Friday.  It is on a buy signal and is due for more strength near the end of the week after a minor pullback.  During the next month, the Cycles Model anticipates TNX rising above the Cycle Top and the neckline of the Head & Shoulders formation.

The Japanese Yen may have completed its Master Cycle low and appears poised to resume its rally above its Cycle Top and Lip of the  Cup with Handle formation.  The Cycles Model calls for a rally lasting to mid-July, which offers time to challenge its target.

Gold futures bounced from its Intermediate support and trendline at 3308.00 over the weekend.  However, the bounce may not last, as the Cycles Model anticipates the decline to continue until mid-July.  Once beneath 3300.00, the 50-day may offer some support at 3246.63.

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.

7:45 am

Good Morning!

SPX futures declined to 5924.60, then bounced to retest the trendline near 5967.60 in the overnight session.  The trendline may have been broken and now awaits the BLS monthly payrolls report.  A breakdown here may certify the end of the current Master Cycle which inverted in the last two weeks.  Yesterday’s high at 5999.70 may mark the inflection.  Should that be the case, the Cycles Model proposes a decline that may last until August.

Today’s options chain shows Max Pain at 5960.00  Long gamma may begin above 5975.00 while short gamma is strong beneath 5950.00.

ZeroHedge reports, “S&P 500 futures rose 0.4% as Tesla shares rebounded 4% in premarket on signs that the spat between President Donald Trump and Elon Musk is cooling. Market gains had little conviction as traders brace for Friday’s main event: a pivotal payrolls report (full preview here) that’s likely to set the direction of travel for markets. Nasdaq futures also add 0.5% even as Broadcom shares fall 3% in premarket after giving a a lackluster revenue forecast for the current quarter. European stocks are little changed. Bond yields are 1-2bp lower; the USD is higher; the yen dropped after BBG reported that Bank of Japan officials are likely to discuss slowing their pullback from buying government bonds at a policy meeting later this month. Commodities are mostly higher: Gold climbs $6 to around $3,358/oz while silver tops $36/oz. WTI falls 0.6% to $63 a barrel. Bitcoin rises 3%. Macro headlines were largely muted overnight; All eyes on NFP today.”

VIX futures are hugging the trendline acting as a “floor” for its trading activity.  This also is an inversion, giving the VIX a double bottom.  The Cycles Model suggests a ramp up to mid-July.

The June 11 options chain shows Max Pain at 19.00.  Short gamma resides at 17.00-18.00.  Long gamma begins above 20.00 and may extend to 50.00.

The 10-year Treasury yield moved above both the 50-day Moving Average at 43.52 and Intermediate support/resistance at 43.95, giving a clear buy signal.  As of 8:45 am it has risen above 44.50 and still climbing.  based on nonfarm payrolls which increased by 139,000 in May.  There may be more commentary later.

ZeroHedge observes, “A better than expected headline payrolls print has sparked a surge in stocks and bond yields this morning as the long-await (and hoped for by some) recessionary collapse in the labor market remains elusive.

Even if below the surface things are not so healthy, rate-cut expectations for 2025 have plunged to less than two total cuts (2026 expectations up marginally)…”

USD futures rose to a morning high at 99.21 this morning in a probable departure from its double bottom/Master Cycle low.  It may now renew its attempt at overhead resistance at 99.76, where a potential buy signal awaits.  The Cycles Model anticipates a rally to mid-August.  During that length of time, the USD may rise to its Cycle Top at 110.78, fueled by a short covering panic.

Bitcoin declined to test its 50-day Moving Average at 100620.00. yesterday, then bounced to 104224.00.  Bitcoin may retest the 50-day in the near term, but may rise to one of the Fibonacci levels between 105000.00 and 107700.00 over the next week or so.  During that time trading may be chaotic.

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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.

3:15 pm

It appears that round number resistance at 6000.00 may have been sufficient to stop the retracement.  SPX has declined beneath its Diagonal trendline at 5950.00, offering a sell signal.  Good luck and good trading.

8:00 am

Good Morning!

SPX futures remained in a very narrow band beneath yesterday’s high.  Today is day 252 in the Master Cycle, leaving a probable week to completion.  Wave [2] offers a complex triple zig-zag formation that is nearing its reversal point.  Fractal relationships suggest a high between 6020.00 and 6050.00.  Fractals reveal self-similar structures that offer a key to the behavior of crowds.  The first rising fractal starting on April 7 (646 points) ending on April 9 represents institutionalized profit taking.  The second rising fractal from April 21 to May 19 (864 points) represents short covering by the general populace.  The third rising fractal from May 23 to the present (223 points thus far) may represent exhaustion of the trend, as there are few shorts left and retail investors reluctantly get on board.   However, time is running out, with only a possible week left to the end of the retracement Cycle, should it last that long.

Today’s options chain shows Max Pain at 59975.00.  Long gamma resides above 6000.00, while short gamma strengthens beneath 5950.00.

ZeroHedge reports, “US equity futures are unchanged, as they struggle for direction ahead of Friday’s payrolls report, following a series of data releases that offered mixed signals on the health of the economy.  As of 8:00am, S&P futures are flat, having traded on either side of the unchanged line during the overnight session and followed a slurry of weak macro data releases which saw Wednesday’s gains erase and recover, with the S&P ultimately ending the day flat. Nasdaq 100 futs are down 0.1% with Mag 7 stocks mostly higher except for TSLA (-1.6%). Stocks and bonds in Europe gained ahead of the ECB’s expected 8th consecutive interest rate cut. The yield on 10-year US Treasuries steadied as Wednesday’s bond rally faded. The dollar reversed earlier losses even as gold surged to briefly top $3400. Commodities are mostly mixed with notable outperformance in silver (+3.1%). News flow since yesterday’s close has been largely muted: headlines continue to focus on trade negotiation development, particularly implication on rare earth curbs (BBG and CNBC) and upcoming Trump-Xi call.”

VIX futures probe lower to 17.22 this morning.  Today 17.15 may be the “line in the sand” for this particular decline.  It may alert us to an imminent reversal.

TNX futures tested the mid-Cycle support at 43.04 and bounced this morning, possibly marking the Master Cycle low.  It is hovering near the 50-day Moving Average at 43.49.  Should it exceed that level, a buy signal may be made.  One wonders why the TNX cannot decline further in the face of higher jobless claims.  The problem is that growing fiscal largesse may make it impossible to control interest rates in the face of growing reluctance by bond buyers.

Bitcoin continues to ride Intermediate support at 104439.00.  A breakdown beneath that level suggests that the 50-day Moving Average at 100325.00 may offer the next support.  The Cycles Model suggests today may offer the beginning of trending strength.  A decline beneath current suport may trigger a series of strong moves to the downside.

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.

10:06 am

The Ag Index declined beneath its April low, leaving two more weeks of potential decline.  Possible targets at the trendline near 360.00 and the Cycle Bottom support currently at 352.85.  Food offers a potential long-term gain that cannot be ignored.  The present situation offers a promising accumulation phase for the next two weeks.  DBA is an agricultural ETF.

ZeroHedge warns, “In a plot that reads like a Tom Clancy novel crossed with a dystopian agribusiness nightmare, two Chinese nationals, Yunqing Jian, 33, and Zunyong Liu, 34, have been slapped with federal charges for allegedly smuggling a biological ticking time bomb into the U.S. 

The weapon? Fusarium graminearum, a fungus dubbed a “potential agroterrorism weapon” by scientific literature, capable of wreaking havoc on America’s wheat, barley, maize, and rice crops while poisoning humans and livestock with its toxic byproducts.”

7:45 am

Good Morning!

SPX futures rose to 5987.30 this morning, on its way to a test of 6006.00, where short buying began at the end of March as SPX cascaded beneath the 50-day Moving Average, prompting massive hedging/shorting.  Once the short covering is complete, market liquidity runs thin.  The Cycles Model suggests a reversal is possible within the next week.

The Fractal similarity guideline suggests a possible high nearby at 6020.00.  These are simply guidelines.  SPX may go higher, possibly 6050.00 in a final exhaustion probe.  In any event, this week offers the last opportunity to squeeze the shorts.  Keep in mind that more than 50% of the buying in the past week came from short covering.

Today’s options chain shows Max Pain near 5950.00.  Long gamma may begin near 5975.00 while short gamma lies beneath 5900.00.

ZeroHedge reports, “US equity futures are higher, following European and Asian markets, while the MSCI All-country world index surpassed the February record high: as if April never happened. As of 8:00am, S&P futures are up 0.2%, trading just shy of 6,000 and on the verge of a 20% bull market rebound from the April low even with some negative trade developments overnight: Trump said that China’s Xi is very tough to make a deal with, and signed an order to raise steel and aluminum tariffs to 50% from 25%. Nasdaq 100 futures are up roughly the same, with Mag 7 names mostly higher premarket led by NVDA (+0.9%) and TSLA (+0.8%). Bond yields and USD are flat; Commodities are mostly unchanged as well, although Ags are higher and gold dips. Trump says Xi is “extremely hard” to make a deal with (here); the White House said that they are expecting a Trump-Xi call this week. The 50% steel tariffs will take effect today; key macro data to watch are May ADP employment change (8:15am), S&P Global US services PMI (9:45am) and ISM services index (10am).”

VIX futures are testing the lower trendline at 17.41 this morning.  The rising trendline may act as a floor for the VIX.  The Cycles Model suggests that a Master Cycle low may be made ant any time in the next week.

USD futures rose to 99.39 after making  its Probable Master Cycle low at 98.58.  The USD is now neutral.  Tomorrow may offer a burst of strength to rise above Intermediate resistance at 99.76.  A buy signal may await that event.

TNX futures ;declined to 43.95 thus far this morning, possibly testing its Master Cycle low at 43.94.  Lower targets include the 50-day Moving Average at 43.48 and the mid-Cycle support at 43.01.

  ZeroHedge remarks, “Back on April 14 when bond yields were soaring in the aftermath of Trump’s liberation day amid speculation that China or Japan were selling some of their US paper to stabilize their currency, a selloff which was compounded by the concurrent unwind of the massive $2 trillion basis trade, Treasury Secretary Steve Bessent appeared on Bloomberg TV to ease fears of a wholesale unwind of the US bond market. In the interview, among other things, Bessent revealed that he has breakfast with Powell every week, and also said that if the Fed does nothing, he might take matters in his own hands, and since the Treasury has a “big toolkit” one of the things it could do is “up the Treasury buybacks” (to prop up Treasuries, in lieu of QE).”

Japanese Yen futures are  consolidating above the 50-day Moving average.  Today may be a day of trending strength which may assist it to the Cycle Top resistance at 71.25.  The rising Yen places the Yen carry trade at risk, since the low rate offered by the Bank of Japan is more than offset by the rising cost of the principal payment.

Gold futures rose to 3396.92 this morning, making a new high.  The potential target may be 3440.00 in a flat correction.  This is sure to bring in more investors thinking that new highs may be made.  However, the Cycles Model suggests the decline may resume in a matter of days, as the euphoria wears off.

Crude oil futures are making new highs above the 50-day Moving Average at 63.09+.  The Cycles Model infers that crude oil may continue its rise to mid-July.

Bitcoin remains above rising Intermediate support at 104083.00.  Its possible target may be the trendline and 50-day Moving Average at 99890.00 followed by a bounce.

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

SPX futures traded in a very narrow range…between 5939.00 and 5900.00.  SPX has lost momentum beneath 6000.00, despite hedge fund leverage nearing the 99th percentile.  Valuations are at 21X earnings, leaving little upside potential.  After six weeks of rally, commercials are about to turn into sellers.  So, with investors all in, upside potential may be limited, while the downside may be looming.  The Cycles Model calls for a possible 2-week decline straight ahead.  Should the powers that be resist the urge to sell, then the SPX may stay range-bound for the next two weeks.

Today’s options chain shows Max Pain at 5925.00  Long gamma may rise above 5950 while short gamma lurks beneath 5915.00.

ZeroHedge reports, “US equity futures follow European markets lower, although off session lows, amid more tariff gloom confronting traders this morning: the pressure of Trump’s tariffs pushed China’s manufacturing PMI survey to its lowest since 2022, while the OECD cut its 2025growth outlook for a second time. As of 8:00am, S&P futures are down 0.2%, erasing almost a 0.7% drop as the US benchmark is set to continue a run of daily swings between gains and losses; Nasdaq 100 futures were flat even as all Mag 7 are modestly lower premarket (AMZN/META -0.4%). Meanwhile, the OECD slashed its global economic forecast again, blaming trade anxiety for holding back investment and warning that protectionism is inflationary (which it clearly isn’t judging by recent inflation prints). The OECD now expects 2025 and 2026 US GDP to print 1.6% and 1.5%, respectively; this is below the G20 average of 2.9% and 2.9% in 2025 and 2026, respectively.  Bond yields are 2-3bp lower; the USD is stronger. Commodities are mixed with oil moving higher and precious metals lower. Overnight headlines are mostly muted. Today’s US economic data includes April factory orders and JOLTS job openings (10am). ”

VIX futures also remains range-bound within yesterdays highs and lows.  The Cycles Model suggests a possible surge in strength starting today and lasting through the end of next week.  VIX shows the invers of the SPX.  There is limited downside, bu unlimited upside.

TNX futures rose to 44.34 in the overnight session, but has pulled back from yesterday’s high.  The Master Cycle low may have been made on Friday.  Since then it has remained above the 50-day Moving Average at 43.44, suggesting the buy signal remains intact.  Most analysts classify TNX as range-bound.  However, the Cycles Model anticipates higher yields, with an initial target at the Cycle Topp at 48.13.

USD futures have made an overnight low at 98.53, but have risen since then.  The attempt at a double bottom has left the April 21 low intact, leaving the USD room for a rally lasting up tot two weeks.  USD short sellers have piled on, but may provide the fuel for the rally as shorts may have to be covered in a panic rally.

Japanese Yen futures have declined to 69.81 as it pulls back toward supports.  The pullback may be strong as it may target the 50-day Moving Average at 68.76 to complete its correction.

Bitcoin futures bounced at Intermediate support at 103670.00 this morning.  Should bitcoin decline beneath support, the strength may turn to the downside.  Otherwise, Bitcoin may continue its rally through the next two months.

Gold made an overnight high at 3417.45, then drifted down to 3372.93 this morning.  There may be resistance near 3440.00 that could stop the retracement.  In the meantime, gold is drawing a crowd of investors.

Crude oil has risen above its 50-day Moving Average at 63.16 this morning after making its Master Cycle low on Friday at the Cycle Bottom.  The Cycles Model shows strength returning to the rally that may last until mid-July.  It is on a buy signal.

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.

12:05 pm

The Banking Index has found support at the mid-Cycle line at 125.22 thus far.  A decline beneath it triggers a second sell signal that shoud be taken seriously.  Rising rates may begin to play havoc on bank balance sheets, causing a potential liquidity crisis.  Once begun, the crisis may extend to early-mid July.

7:45 am

Good Morning!

SPX futures declined to 5857.10, crossing into the sell zone beneath 5875.00.  Further confirmation lies beneath Friday’s low at 5843.66.  The mid-Cycle support is at 5802.00 beneath which the decline may pick up momentum.  The Cycles Model suggests the decline may last another two weeks.  News from the Ukraine provokes further concern about the markets.

Today’s options chain shows Max Pain at 5890.00.  Long gamma may begin above 5900.00 while short gamma lies beneath 5850.00.

VIX futures spiked  to 20,45 yesterday at the news from the Ukraine.  The excitement has eased a bit as the markets await a response from the White House.  The VIX ix due for an imminent burst of trending strength.

ZeroHedge remarks, “Ukraine carried out strategic drone strikes on Sunday against several bases all across Russia that are known to house elements of its nuclear triad. This came a day before the second round of the newly resumed Russian-Ukrainian talks in Istanbul and less than a week after Trump warned Putin that “bad things..REALLY BAD” might soon happen to Russia. It therefore can’t be ruled out that he knew about this and might have even discreetly signaled his approval in order to “force Russia into peace”.”

Gold futures spiked to a weekend high at 3385.11 before calming somewhat.  The Cycles Model had anticipated a strong move today.  Additional volatility may come later this week.

ZeroHedge observes, “Gold is back flirting with the short term negative trend line. The bounces on the 50 day and the long term trend were once again schoolbook examples of buying dips in strong trends. A “proper” close above the $3350 and gold risks going squeezy again.”

The USD futures made a low at 98.61 this weekend.  The double bottom may find resolution as the Cycles Model allows two more weeks to completion.  Support is found at the Cycle Bottom at 97.92.  Should it remain above it, the Master Cycle may end much higher, to the chagrin of the short sellers.

TNX is rising from its Master Cycle low on Friday.   The Cycles Model calls for rising rates for the next six weeks.  Unknown to many analysts, war is very inflationary.  The Cycle Top at 48.15 is the first of several targets.

RealInvestmentAdvice comments, “Some bearish bond investors in Japan and the US appear to believe that a paradigm shift is underway in the sovereign bond markets. To wit, consider the following statement from Jim Bianco on Thoughtful Money:  “If these deficits are really going to kick in and cause problems, these rates are going to go much higher than this.” The bond market paradigm shift we observe is that some people believe the governments and central banks of the largest nations are no longer managing interest rates. For those who believe in this paradigm shift, we ask a simple question: Why Would They Stop Now?”

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.

1:03 pm

SPX  is on a sell signal, having declined beneath 5875.00 and the short-term trendline.

ZeroHedge comments, “Update (1230ET): So much for the TACO trade…

Trump came out swinging early (as we detailed below) and has now followed up with an upper cut as Bloomberg reports, the Trump administration plans to broaden restrictions on China’s tech sector with new regulations to capture subsidiaries of companies under US curbs.

Officials are drafting a rule that would impose US government licensing requirements on transactions with companies that are majority-owned by already-sanctioned firms, according to people familiar with the matter.

7:30 am

Good Morning!

SPX futures remain flat after testing the 5875.00 support level overnight.  While there may be a surge in retail buying, the efficacy of the short covering to the rally may have disappeared.  The actions thus far have not produced any anxiety, but the saying goes, “The bull market rises on an escalator, but descends in the elevator.”  The Cycle Model offers approximately two weeks of decline, which doesn’t seem to phase people after six weeks of rally.  However, Ending Diagonals are often completely retraced in the decline that follows.

Today’s options chain shows Max Pain at 5950.00.  Long gamma may begin above 5975.00 while short gamma resides beneath 5925.00.  There is a large put wall at 5900.00 that may accelerate the decline.

ZeroHedge reports, “US equity futures are in the red but well off session lows, with tech leading and small caps lagging. As of 8:00am S&P futures are down -0.1% at 5,917 having earlier dropped as much as 0.5%; according to Goldman, US equities are “not reacting well” to i) “Plan B” article from the WSJ (which recaps what we said here) that “the administration is considering a stopgap effort to impose tariffs on swaths of the global economy under a never-before-used provision of the Trade Act of 1974, which includes language allowing for tariffs of up to 15% for 150 days to address trade imbalances with other countries”, and 2) a Reuters article quoting Bessent that US-China tariff talks are “a bit stalled.” Pre-market Mag 7 are mostly lower with TSLA -1.4%, NVDA -0.6% and META -0.4%. Bond yields are largely unchanged with the 10Y trading at 4.42%; the USD is modestly higher against G7 peers. Commodities are mixed with oil higher and metals lower. Today, macro focus will be on the April PCE and the final Michigan survey; tomorrow, OPEC+ will meet to decide on July output.”

VIX futures rose to 20.33 this morning, signaling a potential buy signal above mid-Cycle resistance at 19.94.  The 50-day Moving Average lies at 25.14, where most analysts may declare a buy signal.  VIX has been hovering near its trendline for nearly a month and is due for a lift-off.  The Cycles Model suggests trending strength may appear over the next two weeks.

Bitcoin is on a sell signal which may be further confirmed as it declines beneath Intermediate support at 102592.27.  Bitcoin may also be on a mandate to completely retrace its rally from April 7.  When one examines the track rtecord of Bitcoin and other cryptocurrencies, one may conclude that Crypto will not take the place of a sovereign currency because it has the behavioral properties of a simple trading platform with no intrinsic value.  China is against bitcoin because it offers a way to move assets out of the mainland and is used for money laundering.

ZeroHedge observes, ” Vice President JD Vance said that China’s aversion to decentralized cryptocurrencies like Bitcoin was one more reason that the United States should embrace the technology.

“The People’s Republic of China doesn’t like Bitcoin. Well, we should be asking ourselves, why is that? Why is our biggest adversary such an opponent of Bitcoin, and if the communist Republic of China is leaning away from Bitcoin, then maybe the United States ought to be leaning into Bitcoin, and that’s one of the things we’re going to be doing,” he said.”

USD futures have been trading rather flat in the overnight session after attempting to make a double bottom.  It may still attempt to decline to the Cycle Bottom at 98.03 to end its Master Cycle, which has another week to go.  Conversely, we may see an early bottom as strength is due to make a comeback next week, according to the Master Cycle.

TNX made a marginal new low this morning at 44.16 on day 255 of its Master Cycle.  While it may extend further to either Intermediate support at 43.85 or to the 50-day Moving Average at 43.38 over the next few days, the decline fractal may be complete.  The fact is that the USD and the Yen are due for major reversals this weekend which may hasten the reversal in the TNX as well.

The Shanghai Composite Index declined to 3341.65 this  morning on day 254 of the Master Cycle.  There is a probability of a higher ending to the current Cycle early next week.  However, the underlying fundamentals are eroding, despite intervention by the PBOC.  US stocks tumbled on the breakdown of talks between Trump and China.  The China breakdown may soon follow.

The Japanese Yen rose to 69.69 this morning before a small pullback.  It is testing support at the Intermediate lie at 69.46.  The Cycles Model allows a final probe lower, possibly to the 50-day Moving Average at 68.70 before resuming its climb.  The Cycles Model suggests the rlaly may continue to mid-June.

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.

12:59 pm

Crude oil futures scored a direct hit on its Cycle Bottom and on its Master Cycle low on Tuesday.  The Cycles Model suggests new upside strength may be found by the weekend as it has already challenged Intermediate resistance at 61.25.  Once the 50-day is conquered, it may challenge the mid-Cycle resistance at 68.71.  The ultimate near-term target may be the Cycle Top at 77.70.

ZeroHedge remarks, “Oil prices are dumping this morning, after overnight gains following API’s reported big crude draw as soft US economic data and concerns about rising supplies eroded the risk-on sentiment from a court ruling that blocked a swath of the Trump admin’s tariffs.

Crude had earlier rallied as much as 2% after a trade court blocked a vast range of President Donald Trump’s trade levies.

“The path to sustainably higher prices remains extremely narrow,” with the market likely to struggle to absorb additional barrels from OPEC+ over the coming months, said Daniel Ghali, a commodity strategist at TD Securities.”

12:25 pm

SPX made a nominal new high, then reversed to challenge the Ending Diagonal trendline.  A loss of elevation beneath the trendline at 5875.00 may produce a sell signal.  The upside pain may be over .  SPX is a candidate for a key reversal which offers additional confidence of downside pain to come.

7:45 am

Good Morning!

SPX futures raced up to an overnight high of 5995.80 as the Fed releases more liquidity, acting as the buyer of last resort to keep the markets calm.  The Fed may only succeed when investor confidence is regained.  The Cycles Model suggests that the effort to boost equities to a new ATH may ultimately fail, as investors are still licking their wounds from the April debacle.  The question is, “Who will buy at the top of a very steep rally?”  Professional investors remain reluctant to participate in the rally while retail resistance may cave in the face of new highs.  Whether the SPX makes a new high or not, it may have lost sustainability in the face of a huge sucking sound emanating from Japanese institutions attempting to stay ahead of investor liquidations in the face of rising rates.

Today’s options chain shows Max Pain at 5900.00.  Long gamma may exist above 5940.00 while short gamma resides beneath 5850.00.

ZeroHedge reports, “US equity futures are higher, but well off session highs and rapidly losing altitude, after stronger NVDA earnings and a surprise legal block (for now) of Trump’s YTD tariffs, triggering a global risk-on rally. As of 8:00am, S&P futures are  up 0.8% at 5,952, erasing half of the overnight post NVDA/tariff gains which briefly saw spoos rise above 6,000. Nasdaq 100 futures are up 1.4% boosted by NVDA which is +6% after delivering a solid sales forecast, and Jensen Huang saying the AI computing market is still poised for “exponential growth.” Mag7/Semis/Cyclicals are outperforming. Bond yields are higher pushing the 10Y yield to 4.52% but so far equities are mostly unbothered. USD is flat, also erasing all overnight gains, while commodities are higher led by energy. Today’s macro data focus is on the first revision to Q1 GDP, jobless claims, and pending home sales. The tariff rule, for now, has pushed the US back to global outperformance with EU the lagging.”

VIX futures are consolidating beneath mid-0Cycle support/resistance at 19.92 this morning, but may be gaining strength.  A rise above the mid-Cycle resistance may offer a buy signal for the VIX, as it remains in an accumulation phase.

The June 3 options chain shows Max Pain at 19.00.  Short gamma resided between 16.00 to 18.00.  Long gamma comes in strong above 24.00 and remains strong to 50.00.

USD futures rose above Intermediate resistance at 99.85, triggering a buy signal.  Official recognition of a rising dollar may be noted above the 50-day Moving Average at 101.06.  Meanwhile, the heat is being turned up on the dollar short crowd, who may provide the fuel for a dramatic rally as they cover.  The Cycles Model shows exceptional trending strength rising in the next week  and lasting to mid-June.

TNX futures rose to 45.41 overnight, but eased back into its prior range as the market open looms.  TNX is in the final days of its current Master Cycle and may finish a short correction to the 50-day Moving Average at 43.37.  Trending strength may reappear toward mid-June with the neckline of the Head & Shoulders formation in view.

ZeroHedge comments, “What a difference a month makes.

A little over thirty days after one ugly coupon auction after another, when the market was panicking that the US had “lost its reserve status” and any Treasury auction could well be the last (it turns out that “privilege” belonged to Japan, where last week we almost saw the last ever 20Y auction), demand for US paper is once again off the charts… and we aren’t even talking about yesterday’s stellar 2Y auction. Moments ago Bessent’s Treasury sold $70BN in 5 Year paper which saw the highest foreign demand in history!”

Japanese Yen futures continue to press toward the 50-day Moving Average at 68.81 as it wraps up its Master Cycle over the weekend.  That means the Yen may come roaring back next week as Japanese institutions panic sell everything (except their own illiquid bonds) to raise cash to meet liquidations.  That, in turn, spikes the Yen and may force liquidation of US stocks and treasuries as the Yen carry trade implodes.

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.

8:45 am

Good Morning!

SPX futures are moving higher, but choppy.  The Japanese long bond (JGB) sale yesterday was met with reluctance even after the size of the auction was reduced.  The major buyers of the long bands were the insurance companies, who try to meet their future liabilities with longer-term assets.  However, there is an overhang of older bonds that are dragging down yields.  Annuity holders may bolt for the doors as they realize that the newer bonds offer much higher yields.  The Japanese bond market is second only to the US.  Should there be disintermediation in the Japanese market, the consequence may be a liquidation of other assets as there may be no bid on the JGBs.  The size of the liquidations may spill over into the US markets.

Retail investors have become less bearish, but still haven’t pulled the trigger to go long.  Hedge funds remain bearish. The Cycles Model calls for an imminent resumption of the decline into mid-June.

ZeroHedge reports, “S&P futures are marginally higher on the day, reversing an earlier loss driven by modestly higher yields after Japan’s 40-year auction sale Wednesday was met with the weakest demand since July, even if it was far more solid than last week’s 20Y yearh JGB auction. As of 8:00am ET, S&P futures are up 0.1% after the index jumped 2% in the previous session; Nasdaq futures rise 0.2%. Premarket, with NVDA rising 1% ahead of tonight’s earnings; the balance of Mag7 names are seeing slight weakness and Defensives are outperforming Cyclicals. Europe’s Estoxx 50 trades slightly lower with losses led by health care and consumer staples sectors. European stocks dropped 0.3% with losses led by health care and consumer staples sectors, while Asian markets were steady as weakness in Chinese tech firms tempered gains in semiconductor shares. The 10Y yield is flat, erasing some modest earlier gains with a weaker JGB auction being credited for weakness in the global bond market. USD is flat helping commodities catch a bid where Energy and Precious Metals are pushing the group higher. Today’s macro data focus will be on Fed Minutes and the 5Y bond auction; but today is only about NVDA and then near-term market direction.”

VIX futures are consolidating near the mid-Cycle support/resistance line at 19.88.  A rise above 20.00 puts it squarely back into the buy zone.  In addition, there is a latent force of trending strength that may boost it much higher.

TNX has made a morning low of 44.38 and has turned positive since then.  The current Master Cycle only has a week to go.  Given that information and the lack of Model trending strength in the next week, one may expect to see the retracement go to either Intermediate support at 43.83 or the 50-day Moving Average at 43.33.  However, TNX is in the turn zone and may reverse higher, given pressure from the Japanese markets.

Bitcoin has made a Master Cycle reversal on May 22 after making a high of 111998.96 on day 270.00.  There simply isn’t enough room for another high in that Master Cycle.  The Cycles Model also suggests a growing trending strength to the downside beginning next week.  In the meantime, it has declined beneath its Cycle Top support/resistance and is on an aggressive sell signal.  An aggressive sell suggests at least a lightening of exposure to this asset.  A confirmed sell signal beneath the Intermediate support at 101968.60.

USD futures may be pulling back from Intermediate resistance at 99.85 this morning.  The Cycles Model shows trending strength returning early next week and maintaining until mid-June.  Should a panic develop, the USD may rise to its Cycle Top 110.74 in that period.

The Japanese Yen continues its decline toward the 50-day Moving Average at 68.61, or possibly lower.  The Master Cycle is due to run out by the end of the week, leaving the Yen in a position to rally to mid-July.