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.

10:21 am

The Ag Index is aiming for support at 370.80 by early next week.  This is a good time to accumulate shares of Ag commodities as a reversal may be imminent.  This is one of the few investments that have recently established an uptrend and have a good distance to go.  Note the possible Head & Shoulders target.  Despite improving conditions, food and food products may see much higher prices.

10:09 am

The EuroStoxx 50 is heading lower after making a Master Cycle high on the 18th.  It has crossed beneath both the Cycle Top at 56.01 and challenged Intermediate support at 55.21, creating a possible sell signal.  Those seeking to make the gains made since November should lock them in.  Analysts now suggest that Europe is now a contrarian trade.

9:51 am

Liquidity is faltering as BKX declines to support at 122.98.  Should it decline beneath that level, a sell signal may be generated.  The Cycles Model allows the decline to continue to mid-April.  The Cycle Bottom at 101.39 is a possible target.

8:00 am

Good Morning!

SPX futures reached a low of 5684.60 this morning, before a bounce above 5700.00.  It is hovering within short gamma which begins at 5730.00.  The 1987 trendline appears near 5470.00 and is directly in the path of this decline.  The potential target of this decline may be near 5100.00, which is marked with a horizontal trendline.  The Cycles Model suggests a 2-3 week sharp decline ending with a bounce that may remain beneath the 1987 trendline.

Today’s options chain shows Max Pain at 5740.00 with short gamma beginning beneath 5730.00.  This is a dangerous situation for the longs, since trading volumes have been thin as investors are losing heart over the losses thus far.

ZeroHedge reports, “US stock futures faded earlier gains, but were also off session lows after a tariff-driven selloff in equities on Wednesday which hit the Mag7 names. Futures on the S&P 500 are flat after Trump announced 25% uniform tariffs on auto imports, while Nasdaq futures dropped 0.3% amid a reversal of the Monday price action as investors seem to be back to the recession playbook ahead of April 2 announcement. Mag 7, Cyclicals and High Short Interest are among the worst performing baskets, while Defensives outperformed. AI and data center names faced a slew of negative catalysts so far this week, including NVDA’s China environmental curbs, sell-side report on MSFT lease cancellation, BABA’s comments earlier this week: NVDA-5.7%; JPM’s Data Center basket -3.0%. Commodities are higher led by oil and base metals. Outside the US, China ADRs outperformed US domestics with KWEB up 54bps today as China PBOC adviser promised (once again) that China will ramp up stimulus if growth falters.”

VIX futures surged to 19.18 before pulling back, still within positive territory.  The Fractals are now subdividing as VIX may probe much higher.

The April 2 options expiration show Max Pain at 18.00.  Short gamma occupies space between 15.00 and 17.00.  Long gamma begins at 19.00 and strengthens at 24.00.

TNX has lurched above Intermediate resistance and the descending trendline, creating a buy signal.  Today is day 252 of the current Master Cycle, leaving about a week to continue its ascent.  It is likely that the 50-day Moving Average at 44.32 may have an effect on the probe higher.  However, the trendline may also provide support.  The Cycles Model suggests a 2-week retracement in mid-April before TNX powers higher.

ZeroHedge observes, “Hot on the heels of yesterday’s stellar 2Y auction, moments ago the Treasury sold $70BN in 5 year paper in an auction which may not have been quite as impressive at first sight, but which was nonetheless just as solid when taking a closer look below the surface.

The auction stopped at a high yield of 4.100%, down from 4.123% last month and the lowest since September; however, it also tailed the When Issued 4.095% by 0.5bps, the first tailing 5Y auction since October.”

Bitcoin is consolidating/;correcting beneath its mid-Cycle resistance at 87593.52.  While the correction appears complete, there may be 1-2 more weeks before a reversal.  A possible target may be the 500-day Moving Average at 89581.24.

Gold futures powered up to 3094.85 while the Continuous Contract on the CME lags behind.  Gold may have reached its initial target near 3100.00 today, day 253 in the Master Cycle.  There is still room to go higher, but time is running out on this rally.  There is no signa, so we await further developments.

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.

10:34 am

BKX has reached its 50%retracement value at 128.59 this morning.  It may overshoot to the Intermediate resistance at 129.48 before reversing.  The Fed has been paying particular attention to the health of the banks.  However, should interest rates (10-year) continue to rise, it may add stress to banks’ balance sheets.

8:30 am

Good Morning!

SPX futures are flat this morning.  While the SPX is in the reversal window mentioned yesterday, it may linger on a flat line a few more days.  It appears to be caught between the mid-Cycle resistance at 5780.45 and the 200-day Moving Average at 5754.41.  The 50% retracement is at 5827.31, which may be tested in a final probe ending the Cycle.  Diminished liquidity and the buy-back blackout leaves equities in a neutral position.  Investors are looking for alternatives to the US equities market.  Frankly, the US market has done as well as its has because overseas investors are fleeing to the US due to the poor political outlook in Europe, among other places.

Today’s options chain shows Max Pain at 5765.00  Long gamma appears above 5795.00 while short gamma strengthens beneath 5725.00.

ZeroHedge reports, “US equity futures are flat, reversing earlier losses while global markets were mixed (Europe down, Asia up) as investors awaited more clarity on US tariff plans and the economic outlook before Donald Trump’s April 2 “Liberation Day” deadline to impose a fresh reciprocal tariffs. As of 8:00am ET, S&P futures were up 0.1% following modest gains on the indexes on Tuesday, while Nasdaq futures were flat as Tesla and Nvidia shares edged lower, pressuring the Mag 7. Europe’s Stoxx 600 index dropped 0.5%. Bond yields are 1-3bp higher and USD is higher. Commodities are mostly higher led by oil and base metals. Copper futures in New York surged to a record high (up 1% now after easing off records) as traders priced in the possibility of hefty import tariffs that may come within several weeks. Headlines were mostly quiet since market close yesterday.  Today’s economic calendar includes Feb durable goods orders at 8:30am; Fed speaker slate includes Kashkari (10am) and Musalem (1:10pm).”

VIX futures are higher this morning, but lingering near the mid-Cycle support/resistance at 17.63.  It may touch the trendline at 16.51 before a reversal takes place.

The April 2 options expiration shows Max Pain at 18.00.  While short gamma is much diminished, long gamma shows interest at 24.00.

TNX is challenging Intermediate resistance and the descending trendline ar 43.58 this morning.  DOGE is “lifting rocks” to see what is hidden from public view and finding funds being paid out with no authorization.  Reducing the deficit is becoming more difficult due to off-the-books outlays.

ZeroHedge observes, “In 1974, Congress created the Legal Services Corporation to connect lower-income Americans involved in civil disputes with free legal help. The law that established the agency stipulated that authorization for its funding would expire in 1980, when lawmakers were required to vote on whether to keep it alive.

They never did. Still, Congress has funded LSC every year since. In fiscal 2025, its 51st year, LSC’s 135 employees will spend 95% of its now $560 million annual budget paying legal groups to represent Americans in cases such as eviction, domestic violence, and disputes over government benefits, according to Ron Flagg, the agency’s president since 2020.”

USD continues to rise off its March 18th Master Cycle low.  The Cycles Model suggests trending strength may surge higher as the Cycles Model suggests multiple significant events occurring over the next week.

Gold futures are higher this morning, as the price rises to challenge the existing high.  Round number resistance at 3100.00 may be a likely target, but a surge to the trendline near 3200.00 cannot be eliminated over the next week.  Gold reacts to political uncertainty and there is plenty to go around.  While physical gold demand remains strong, the US Dollar is showing signs of resurgence that may stifle gold’s attraction.

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 an

Good Morning!

SPX futures have hit a high of 5778.90 thus far and may go higher in the next day or so.  The reason is that SPX is on day 252 of the Master Cycle, nearing completion within the reversal window.  A further observation is that the previous Master Cycle was 5 days late, on day 263, allowing the turn to occur early in this Cycle and remain close to the average Cycle length.  My earlier analysis before my trip was that the SPX would make a Master Cycle bottom this week.  What a difference two weeks make!  The main reason for this change is the NATO is preparing for war.  European citizens are sending their money overseas where it is safer and not subject to possible capital controls that may be forthcoming in a wartime economy.  A clampdown on money fleeing Europe may be imminent.   European chat forums are being shut down.  In the meantime, US assets are benefiting from capital flight.  It is possible that this bounce may target Intermediate resistance at 5874.39.

Today’s options chain shows Max Pain at 5750.00.  Long gamma dominates above 5770.00.  Short gamma strengthens beneath 5700.00.

ZeroHedge reports, “US equity futs are little changed, erasing a modest loss earlier in the session when investors took some profits from yesterday’s torrid rally which pushed the S&P 1.8% higher. As of 8:00am ET, S&P and Nasdaq futures are both up 0.2%, with Mag 7 stocks all higher pre-market, led by TSLA (+1.4%). European stocks gained as the Estoxx 50 rises 1.1% led by energy and financials, although Asian stocks dropped for a third straight day of losses, driven by Chinese tech shares trading in Hong Kong slid 2.6%, weighed down by a drop in Xiaomi after its $5.5 billion share sale. Investors were also rattled by Trump’s new threat of “secondary tariffs” on countries that buy oil from Venezuela. Bond yields are 1-3bp higher. Commodities are mostly higher led by precious metals (silver) and oil. WTI crude oil futures add about 0.5% to Monday’s 1.2% gain. Today, we will receive consumer confidence at 10am ET (est 94.0 survey vs. 98.3 prior).”

VIX futures are coming down, reflecting money flows that dampen volatility.  VIX is approaching its turn window the may not be realized until a reversal in equities.  A decline to 16.00 may occur in the next week.

Tomorrow’s options chain shows Max Pain at 20.00.  Short gamma is dominant between 15.00 and 19.00.  Long gamma begins at 21 and remains strong to 35.00.

TNX is on the rise again, testing Intermediate resistance and the trendline at 43.57.  A breakout may give a buy signal.  There is approximately a week left in the current Master Cycle.  A breakout may cause yields to challenge the January high.  Analysts believe that the bond market is exhibiting mean reversion behavior experienced over the last six months.  The Cycles Model suggest this may change…

globest.com reports, ““In my talks with [the president], he and I are focused on the 10-year Treasury [yield],” Treasury Secretary Scott Bessent said in February.

EuroStoxx may be in their final probe to a new high this week.  The Cycles Model suggests the final high in Stoxx may be Friday, suggesting the events leading to a European conflict may come to a head as early as this weekend.  European investors have little choice in where to put their money as the bond market is in tatters there.  Banks are not too far behind, so investing in stocks is not being made for the return, but for some capital preservation.  While the European market looks enticing, capital controls may trap investors’ money when the tide turns.

The USD made its Master Cycle low on March 18.  It is currently consolidating above the low, but has mid-Cycle resistance above it at 104.89.  A buy signal may be made above that level.

Gold futures may be on their way to a final high near 3100.00 or higher in the next week.  A possible probe to the upper trendline near 3200.00 appears likely.  Gold is also benefiting from capital flight from Europe, but may cease soon as capital controls are initiated by European governments..

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 declined to 5633.50, then bounced.  It may have embarked on a path to lower levels.  It is possible that the 1987 trendline has already had its bounce 50 points above it at 5504.66.  If so, this decline may go beneath the trendline at 5450.00.  Should that be the case, we may see at least two limit down days in the next week-and-a-half.   The target appears to be 5100.00, but may be lower.  Today we see a $4.7 trillion options expiration with $2.8 trillion in the SPX that may have consequences over the next week.

Today’s options expiration shows a huge options wall of both puts and calls at 5700.00 (Max Pain).  Long gamma takes over above 5725.00, while short gamma reigns beneath 5680.00.  It may be a bloody battle for supremacy.

ZeroHedge reports, “US equity futures are lower, as are European and Asian markets, with sentiment after the latest batch of earnings after yesterday’s close were mostly mixed or negative (particularly Fedex and Nike, both of which guided lower again). S&P500 futs are down 0.2%, off session lows, with the index facing an additional test on Friday in the form of a huge option expiration quad-witching. Nasdaq futures dropped 0.3% with all Lag 7 names lower led by NVDA -1.2%, and TSLA -0.7%. Micron reversed an earlier gain after reporting earnings after hours and was down 3%-premarket amid margin weakness. 10Y Treasury yields are down 4bps while the dollar reversed an earlier gain. In commodities, oil markets are already feeling the effect of the first effort to target a vast private processing industry, with traders preparing for significant disruption after Washington’s move to sanction a Chinese refiner over its Iranian links. London’s Heathrow airport will be closed all day Friday and service interruptions are likely to continue for days after a nearby fire cut power to the hub and brought travel to a standstill. Today, the macro data calendar is largely quiet, with eyes on any additional headlines from the White House.”

VIX futures are consolidating at the lows.  However, today’s options expiration may prove to be very active.  At a minimum, VIX may rise to the August 5 high during the next week.  The Cycles Model suggests a high in the first week of April.

The March 26 options expiration shows  clear bifurcation between puts and calls at 20.00.  Short gamma occupies the 15.00-20.00 range, while long gamma dominates the 25.00-30.00 range.

TNX declined to a morning low of 41.99 before a bounce that may propel it much higher.  Thus far it has remained beneath the declining trendline at 43.67.  The Cycles Model infers that a burst of trending strength may emerge this weekend that may propel TNX above that trendline, giving a buy signal.  The Fed’s reduction of the run-off cap from $25 billion to $5 billion may end QT for treasuries.

The Banking index stalled just above the mid-Cycle resistance at 122.38.  A decline beneath it may spark a continuation to round number support at 100.00 over the next 2-3 weeks.

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.

9:02 am

Good Morning!

SPX extended to 5703.00 before beginning  a reversal yesterday afternoon.  It may now decline for the next two days to a new low approaching the 1987 trendline near 5450.00.  From there another bounce may develop going into options expiration on Friday.  Contrary to popular opinion, the decline is far from over.  The SPX is due to decline beneath the 1987 trendline next week.

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.

10:17 am

Good Morning!

SPX may be finally at a turning point for another descent.  The possible target is 5400.00-5450.00.  It may bounce at the 1987 trendline (on the daily chart) near 5450.00, offering a possible 3-5 day bounce as high as 5773.00 as we go into options expiration.  However, should it cross significantly beneath the 1987 trendline, the bounce may be shortened by the trendline.

ZeroHedge reports, “Futures are lower to start the week – but well off the lowest levels of the session – following the best day for US stocks since November, as the market digests trade war news and the Trump Put remains absent. Over the weekend, Scott Bessent dismissed recent stock declines as healthy, reinforcing the view that President Donald Trump’s administration is unlikely to step in to boost markets (the Fed is a different matter). Trump also reminded investors over the weekend that he would be imposing both broad reciprocal tariffs and additional sector-specific tariffs on April 2. As of 8:00am ET, S&P futures are down -0.2% having been down as much as 0.6% earlier; Nasdaq futures are down 0.1% as Mag 7 stocks edged lower, though Nvidia gained before its much anticipated conference on artificial intelligence. Europe’s Stoxx 600 index rose 0.4%, extending its year-to-date outperformance against US stocks. In global news, Trump will speak with Russian President Vladimir Putin on Tuesday about ending the war in Ukraine. So far the Ukraine ceasefire news is having a muted impact. Trump also said reciprocal tariffs and additional sector-specific tariffs will hit on April 2. Meanwhile, the US retail operator of Forever 21 filed for bankruptcy after years of poor performance. Bond yields are lower as the curve bull flattens while the USD falls to fresh 4 month lows. Commodities are bid higher led by Ags and Energy, following the latest stimulus vows from China. Today’s macro data focus is on Retail Sales where a stronger number may give the market comfort in trying to create a relief rally and the Fed on Weds could be supportive too.”

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.

11:45 am

My apologies.  I can only get a partial image for the SPX.  However, it shows the potential actions that may take place in the next few days.  The Model anticipates the SPX may decline to the 1987 trendline near 5450.00,  possibly by Monday.  Then it may bounce to the mid-Cycle resistance at 5770.76 sometime next week.  The final plunge may begin by options expiration next Friday, lasting up to 2 weeks.  The anticipated final target in this series may be near 5100.00.  This is a projection and not a guarantee of performance.  Should the SPX go beneath the 1987 trendline this week, the decline may be much deeper.  The SPX is anticipated going beneath the trendline after the bounce, but may do so sooner..

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.

4:00 pm

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.

10:45 am

Good Morning!

SPX has opened near mid-Cycle support/resistance after bouncing off the 200-day Moving Average yesterday.  It’s deep in short gamma beneath 5800.00.   Dealers would like to see SPX rise above that level.  Unfortunately, it may not succeed, as day traders are piling into puts, especially beneath 5750.00.  With short gamma as prevalent as it is, there is no need for a catalyst to turn a decline into a rout.  Top of the book liquidity has been cut in half since the beginning of the year, especially with leveraged ETF strategies.  In addition, CTAs are selling large holdings at the open and at the close.  This is no time for being long.

11:00 am

The Ag Index, GKX, has risen above the trendline at 374.00, creating a buy signal.  Food prices appear to be heading much higher.  This is a “must own” category.  The problem isn’t just supply and demand.  Supply chains are becoming clogged and broken.

BKX is bouncing from a potential Head & Shoulders neckline.  The formation is skewed, but may be legitimate.  Consider going short on your most hated bank.

Crude oil has fallen beneath the massive Head & Shoulders neckline at 66.00.  Consider shorting/;hedging this commodity as the Cycles Model suggests the decline may run until mid-April.

ZeroHedge observes, “Oil prices extended their losses overnight to the lowest in almost six months as traders wrestle with conflicting signals on the longevity and effects of US tariffs on the country’s two largest external crude suppliers.

A mixed bag from API last night did not help but all eyes on the official data this morning for any signs of life.”

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.

2:25 pm

The Banking Index hit its December low and may have formed a small Head & Shoulders formation.  A breakdown through the neckine may produce a decline to the September low.  The formation is at the right place and the right time, so we may follow it down to its conclusion.

12:17 pm

The Ag Index has bounced from its mid-Cycle support at 370.45 with precision and had risen back above its trendline near 373.00.  This has given a possible buy signal for the Ag Index.  A rally above its most recent high produces a target over 500.00.   This may be a very welcome contrast to the goings-on in stocks.

11:52 am

SPX has declined to the 200-day Moving Average (a make-or-break level for some traders) at 5725.86, then bounced.  However, there is another resistance near 5775.00 that may stop the bounce.  The results is a possible resumption of the decline beneath the 200-day.  The CTA sell signal is at 5887.00, so a possible $24 billion of stocks may be sold this week by the CTAs alone.  Many trading desks are turning “tactically bearish” today.

2:30 pm

The bounce went well above the technical resistance, possibly trying to escape short gamma beneath 5800.00.  It may be possible that the powers-that-be may be trying to convince the CTAs not hold off on the sales.

8:15 am

Good Morning!  I have been keeping an eye on the Weather, since my destination this week is near an area expecting 10-20 inches of snow tomorrow.  It now appears that the storm may have passed by Thursday, allowing me to leave on Thursday instead of Wednesday.   All is subject to change.

SPX futures are testing 5800.00 this morning.  There is little to stop it there, so the next support may be the mid-Cycle support at 5758.46, where a bounce is possible.  Beneath that, supports may be found at round number intervals, such as 5600 and 5500.00.  A significant bounce may be found at the 1987 trendline near 5400.00, possibly in the next week.  The decline may gain intensity through March 21, but may not be over until the end of the month.

Today’s options chain shows Max Pain at 5900.00.  Long gamma may begin above 5905.00 while short gamma intensifies beneath 5800.00.  It appears that there may be a bounce with the dealers attempting to achieve 5800.00 at the close.

ZeroHedge reports, “Futures are lower, tracking European and Asian markets, with the dollar plunging on mounting recession fears, as the Trump trade war officially started at midnight, although according to JPMorgan it could be even worse and the “downward reaction is muted given the significant, expected impact on the economy and earnings expectations.” At the same time, Canada, China, and Mexico are rolling out their retaliatory measures. As of 8:00am ET, S&P futures are down 0.5%, and near session lows, while Nasdaq futures drop 0.6%, with Mag7 names sliding premarket and NVDA tumbling another 2.4% after plunging 8.7% on Monday. Investors will also be waiting to see what Trump says in his State of the Union speech tonight (some see it as a final hope for an off-ramp). Bond yields are mixed as the curve twists steeper and USD plunges amid rising fears the tariffs will accelerate a recession. Commodities are weaker with precious outperforming while energy stocks underperform as oil prices fall further after OPEC+ announced plans to revive halted production. WTI declines 0.8% to $67.80 a barrel, the lowest since December. There are no major macro data releases today and the Fed’s Williams speaks ~2.20pm EST; Trump’s State of the Union address is at 9:00pm ET.”

VIX Index rose to 24.69 this morning as investors sought hedges against the decline in stocks.  There may be a burst in trending strength throughout the week as the “fear index” gets more attention.  VIX is universally recognized in a positive trend above 25.00, so the rally may become more energized this week.

Bitcoin slipped  beneath the mid-Cycle support/;resistance at 84347.22 this morning, reinforcing the sell signal.  Bitcoin may be in the final week of its decline in the current Master Cycle.  We may expect a bounce during the week of March 10. A lot may happen in the next week or so, since Bitcoin is a highly leveraged trading vehicle.  The “Trump Bump” may blow up.

TNX futures declined to 41.28 this morning, in line with the December low at 41.26.  It may be due for a mid-Cycle reversal.  The current Master Cycle appears to run to the end of March.  However, an inversion is not out of the question, as a price level may have been met.