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.

8:00 am

Good Morning!

SPX futures consolidated beneath the trendline after bouncing off Intermediate support.  The bounce may develop further, with a potential target at the 61.8% retracement at 6428.00, or to the trendline, now approaching 6450.00.  A new, all-time high is possible, due to the structure of the fractal.  However, it may not last.  The Cycles Model allows one last blast of trending strength today before the downtrend may take hold.  The buyback blackout begins after Labor Day.  Critical support lies at 6338.00.

Today’s options chain shows Max Pain at 6400.00.  Long gamma may begin above 6430.00 while short gamma resides beneath 6350.00.

ZeroHedge reports, “US equity futures dropped, extending the recent selloff into its fifth day, as traders stayed guarded ahead of the Federal Reserve’s gathering at Jackson Hole. As of 8:00am, S&P 500 futures fell 0.2%, while Nasdaq 100 futures were flat after a two-day selloff that erased 2% off the index. In premarket trading, Nvidia rose 0.8% while most Magnificent Seven peers posted losses. Retail giant Walmart brought Q2 earnings season to an unofficial close after reporting an EPS miss (68c vs exp. 74c) and even though it lifted guidance (now expects net sales to rise 3.75% to 4.75% this year, versus previous forecast of a 3% to 4%) that wasn’t enough for the market, however, and the stock dropped in premarket trading. European stocks dropped 0.3%, erasing an earlier gain, and snapping a three-day winning streak. US treasuries fell, pushing the yield on the 10-year higher to 4.31%. The dollar strengthened and reversed all of yesterday’s losses while Brent crude rose to the highest in two weeks even as the rest of the commodity complex was mixed. It’s a busy economic calendar: we get weekly jobless claims and August Philadelphia Fed business outlook (8:30am), S&P Global US PMIs (9:45am) and July leading index and existing home sales (10am). The Fed speaker slate includes Atlanta Fed President Bostic at 7:30am, the last central bank official slated to speak before Chair Powell’s discourse at Jackson Hole Friday.”

VIX futures ae consolidating inside yesterday’s trading range.  VIX has issued a buy signal and the pullback offers the opportunity purchase cheap hedges.  The Cycles Model suggests that trending strength may appear next week.

The August 27 options chain shows short gamma at 15.00-16.00.  Long gamma begins at 17.00.  While sentiment is swinging long, there is not a lot of conviction, yet.

TNX is easing down, in anticipation of a Powell rate cut in September.  The 10:00 am speech tomorrow may be used to announce upcoming policy changes.  Money markets are pricing in an 80% chance of a .25% rate cut in September.  Should the speech be nuanced in favor of a rate cut, we may see TNX  pay a visit to the Cycle Bottom at 40.99.

ZeroHedge  reports, “With bond yields sliding thanks to the ongoing stock drawdown, there wasn’t many concerns about demand for today’s 20Y auction. And rightly so, because the sale of $16 billion in 20 year bonds went through without any difficulty amid solid, if hardly stellar, demand.

The auction prices at a high yield of 4.876%, down from 4.935% in July and stopped through the When Issued 4.877% by 0.1bps, the second consecutive stop through after 2 tails.”

USD futures are rising above the 50-day Moving Average at 98.10, giving a buy signal.  Dollar shorts are in for more pain as the rally gains momentum.

Bitcoin has slipped beneath the 50-day Moving Average at 115,763.45, reinforcing the sell signal.  The 100-day is not far away, at 111,147.00.  Keep in mind that Bitcoin is a pure speculative play, with no intrinsic value beneath it.

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.

12.45 pm

The Banking Index has lost support at the Intermediate level, giving a sell signal.  It has pulled back to test Intermediate resistance at 143.26.  Further erossion beneath the 50-day Moving Average at 139.95 adds confirmation to the sell signal.

12:40 pm

VIX has challenged the 50-day Moving Average at 16.88, offering a buy signal.  It’s time to buy the pullbacks.

12:33 pm

SPX has bounced from the Intermediate support at 6341.93 this morning.   Crossing beneath the trendline has created a sell signal, allowing investors to short the bounces.  The trendline may now act as resistance.  The next probable bounce may be the 50-day Moving Average at 6250.90.  Some trading desks are telling their customers to buy the dip.  The youngsters working there haven’t seen a real sell-off.

8:00 am

Good Morning!

SPX futures declined to 6390.30 this morning, as it flexes beneath the Ending Diagonal trendline near 6420.00.  The trendline may be broken.  Further confirmation lies beneath Intermediate support at 6333.27 while the 50-day Moving Average gives final support at 6235.60.  The Cycles Model suggests the uptrend may be finished by the end of the week, evidenced by the loss of key supports.

Today’s options chain shows Max Pain at 6425.00.  Long gamma may begin at 6440.00 while short gamma lies beneath 6400.00.  Short gamma may intensify beneath 6375.00.

ZeroHedge reports, “US equity futures are down and headed for a 4th day of losses, but trade well off session lows as markets assess if the sharp momentum selloff we have discussed for the past week will extend into today’s session: the JPM Momentum Basket (JPMPURE Index) is down more than 7% since the CPI print while Goldman said it’s time to resume buying momentum factor. As of 8:00am S&P futures are down 0.2%, after dipping 0.5% earlier in the session; Nasdaq futures are also down 0.2% after the index logged its second-biggest decline since April on Tuesday, with Mag7 names lower premarket ex-NVDA/MSFT; Defensives are outperforming Cyclicals. According to JPM “today feels like a test for the dip-buyers, as Flash PMIs tomorrow and Powell at Jackson Hole on Friday may prove to be market movers/narrative changers.” The yield curve is twisting flatter with the USD not flat. Commodities are seeing a bid across all 3 complexes highlighted by WTI. The macro data today is mortgage applications and Fed Minutes with tomorrow delivering Flash PMIs, jobless data, leading index, and existing home sales.”

VIX futures rose to 16.13 thus far, testing Intermediate resistance at 16.23 after having made its Master Cycle low on August 13.  The 50-day Moving Average provides further resistance at 16.99.  While technicians may recognize either of these levels as critical, most investors are likely to wait for the  breakout above 21.90 to begin hedging.  Last week’s monthly options expiration in equities showed dealers owning a record $10 billion in long gamma.  Today’s monthly options expiration in the VIX is likely to release a massive short gamma dealer position, allowing the VIX to rise from the “floor” where it has been suppressed for the last several months.   The Cycles Model suggests a rally in the VIX to early October.

The August 27 options chain shows virtually no short gamma.  Long gamma may arise at 15.00 and extends to 25.00.  Conviction in long gamma appears modest.

TNX is pulling back this morning from a test of the 50-day Moving Average at 43.43.  The Cycles Model allows for an extension of the Master Cycle in time and space.  This week may prove the limit in time, while the Cycle Bottom support at 41.00 may give the final target.  Jackson Hole may provide some solace for those seeking further rate cuts, but it may not last.

USD futures are hovering near the 50-day Moving Average at 98.12 this morning after a potential breakout.  The Cycles Model suggests the USD may resume its uptrend through mid-September.  While the Cycles Model offers no immediate insight, there are always outside catalysts that may bring about a reaction.

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.

2:38 pm

SPX has ventures down to 6402.00and may now be underneath the three-month trendline.  This may be recognized as a sell signal, especially should it close beneath 6400.00.

8:30 am

Good Morning!

SPX futures made a new low at 6434.10 this morning as support erodes.  Critical support lies at 6400.00.  A break pf the trendline near there gives a sell signal.  Further support lies at the Intermediate level at 6327.00 while the 50-day Moving Average is at 6227.13.  The Cycles Model suggest the uptrend may be broken by Thursday with a decline lasting to the end of September.

Today’s tightly- wound options chain shows Max Pain at 6450.00.  Long gamma becomes strong above 6460.00 while short gamma prevails beneath 6440.00.  This suggests a slip in either direction may set off a chain reaction.

ZeroHedge reports, “Futures are flat ahead of consumer-sector earnings kicking off today, starting with a miss by Home Depot this morning. As of 8:00am ET, S&P futures were unchanged while Nasdaq futures drop 0.1% as Mag7 names are mostly lower ex-NVDA. Semis are mostly weaker ex-INTC which gained more than 6% on news SoftBank would invest $2 billion in the chipmaker and the US would take a 10% stake. Defensives are slightly outperforming Cyclicals. Europe’s Stoxx 600 rose 0.5% as signs of progress toward a peace settlement in Ukraine lifted sentiment. The dollar nudged lower. Treasuries eked out gains after S&P Global Ratings affirmed its AA+ long-term rating for the US, with the 10-year rate falling one basis point to 4.32%. Commodities are weaker dragged lower by energy despite strength in precious and Ags. BBG flags a trade escalation from Friday where Trump expanded the metals tariffs to more than 400 consumer goods, including baby gear, and there is no exemption for goods already in transit; the article states this impacting $328bn of goods based on 2024 trade levels vs. $191bn before the expansion and is more than 6x levels from 2018. Today’s macro data focus is on housing starts and building permits; XHB has lagged SPX YTD by 138bp but has outperformed the SPX by 912bp over the last month.”

VIX futures are hovering near their Master Cycle low made on August 13.  The Cycles Model suggest that the VIX fractal may turn impulsively bullish by the end of the week.

Tomorrow’s options chain shows massive short exposure beneath 20.00, indicating the retail preference.  However, long gamma begins above 20.00 and shows heavy institutional participation every 5 points up to 60.00.

TNX futures rose up to the 50-day Moving Average at 43.51 in the overnight session.  It has since pulled back and may retest the recent low near 41.88, or the Cycle Bottom at 41.01.    Meanwhile, rate cut expectations are faltering as J-Hole approaches on Friday.  Jerome Powell is expected to give his last speech on Friday at 10:00 am.

Bitcoin is challenging the 50-day Moving Average at 115602.00, falling to a low of 114441.44 this morning.  The Cycles Model anticipates a possible sharp correction until the first week of September.  What follows may depend on the depth of the impending correction.

USD is challenging the 50-day Moving Average at 98.13.  Should it remain above it, a possible buy signal may be made.  However, the fractal guidelines suggest a deeper low may be developing.

10:15 am

The Banking Index is hovering above its Intermediate support at 143.30 this morning.  A decline beneath it may induce a sell signal.  Further support of a sell signal lies beneath the 50-day Moving Average at 139.66.

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 went lower this morning, to 6436.30, as the SPX obtained release from the massive options positions which expired on Friday.  While Friday’s options day closed near Max Pain at 6440.00, the dealers had to maintain hedges against the possibility of a melt-up.  The release of these hedges allows the index to “relax” and possibly decline.  Some analysts are calling for a pullback.

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 have risen to 6487.40 thus far this morning, above its August 13 high.   Cycle Top resistance lies at 6507.36.  The Cycles Model indicates  that time is running out for this uptrend.  Investors prefer stocks over cash despite the all-time highs.  That means there are fewer buyers, or maybe none at all, to cushion the inevitable correction.  The Cycles Model posits this is the last possible week for the uptrend.  In addition there is an indication of rising volatility associated with reversals.  Should that be so, there is a high probability of a decline to the end of September.  The uptrend trendline is at 6400.00, beneath which a sell signal may be made.

Today’s options chain shows Max Pain at 6440.00.  Long gamma resides above 6500.00 while short gamma lies beneath 6400.00.

ZeroHedge reports, “US equity futures are slightly higher , hovering near all time highs as traders bet that data on Friday will bolster the case for interest rate cuts even as the latest BofA card data hints at a big beat in today’s retail sales print (see preview here); tech stocks lag. As of 8:00am S&P futures are 0.2% higher following back-to-back record closes earlier in the week, with Nasdaq futures modestly in the red after incremental headlines since yesterday’s close which were net negative, with soft guidance from AMAT on uncertain macro environment in Semis and weaker China activity data. Pre-market, NVDA fell 0.3%, with the rest of Mag 7 moving higher; Health Care and Financial are outperforming. Intel rose more than 3% in premarket trading on a report that the US government may buy a stake in the struggling chipmaker. US Treasuries are mixed, with the yield on two-year notes falling one basis point to 3.72%. The yen led gains among major currencies against the dollar as the greenback weakened 0.3%. Commodities are mixed, with precious metals higher and base metals lower. Today, key macro focus will be Retail Sales and Trump-Putin Summit.”

VIX futures are consolidating near the low at 14.30.  Today is monthly options expiration for the SPX in the largest August expiration ever.  SPX calls outpace puts by a wide margin, suggesting that their expiration may release the VIX from its floor.  0DTE traders may dominate today’s trading, chasing after momentum moves into the close.

The August 5 options chain shows Max Pain at 19.50.  Short gamma is heavily weighted beneath 18.00, while long gamma strengthens above 25.00.

TNX is hovering beneath resistance at 43.30 – 43.53.  There is a risk of an imminent breakout above that level.  The Cycles Model indicate a high probability of rising rates through the end of September.  Should that be so, the Head & Shoulders formation may be engaged.  Retail sales are coming in strong, snuffing the hopes of an imminent rate cut.

USD futures are testing the 50-day Moving Average at 98.16 this morning.  The Master Cycle has made its low on August 13, suggesting a breakout may be imminent.  Note: A further low is possible, with a reaction/reversal to follow.

Bitcoin futures may have made their all-time high at 124,532.70 yesterday.  It has since pulled back, but stopped short of a key support at 117672.63.  An aggressive sell signal may be made beneath that level.  Note that the 50-day Moving Average lies at 114897.00, where a confirmed sell signal may reside.  Should a sell signal be  triggered, a decline to early September may occur.  The Cycles Model suggests a double dose of strength/volatility may be imminent.

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 made a new all-time high at 6488.50 this morning.  It is on time to meet or (temporarily) exceed the Cycle Top , currently at 6501.10.  The market has narrowed considerably, while growing exponentially.   Only two stocks,  NVDA and MSFT make up over 15% the the valuation of the SPX.   The Cycles Model suggests today is a high strength, high volatility day.  It may be a perfect setup for a reversal.  Should that be the case, we may see a full-on decline to the end of September.

Today’s options chain shows Max Pain at 6455.00.  Long gamma becomes strong above 6490.00 while short gamma dominates beneath 6440.00.

ZeroHedge reports, “The global market rally stalled and US equity futures are flat with small caps underperforming (SPX and NDX made new ATHs yesterday while the Russell still sits ~5% below its ATH) into this morning’s PPI print, where the market may confirm CPI’s trend as well as solidifying PCE estimates. As of 8:00am, S&P 500 futures were flat changed after the benchmark notched a record close for a second straight session; Nasdaq futures dropped 0.2% after Cisco shares fell after issuing a cautious full-year revenue outlook.  Europe’s Stoxx 600 rose 0.3%. Pre-mkt, Mag7 names are mostly higher with Semis weaker; Defensives looking stronger than Cyclicals with healthcare leading. Bond yields are lower as the curve bull flattens: the yield on 10-year notes dropping two basis points to 4.21%. Bitcoin retreated 1.7% from an all-time high and the USD is flat. Today’s macro data focus is on PPI and Initial Jobless Claims; an in-line print in both should support stocks. JPMorgan says that should the rally resume, look for RTY to close the gap to tech/large caps.”

VIX futures are consolidating in a narrow range just above yesterday’s low.  Today is day 251 of the current Master Cycle.  The Cycles Model suggests it may be a high volatility day.  ‘

The August 20 (monthly) options chain shows short gamma strong between 16.00 and 18.00.  Long gamma is strong above 20.00.  Large institutional positions are filling in above that.

10-year Treasury yield futures show a decline to 42.01 this morning.  The likelihood that TNX may reach the Cycle Bottom at 41.01 this week is high.  The yield drift lower may be about to end dramatically as a high volatility reversal may be due this weekend.  Things don’t look good for President Trump’s meeting with Putin.

USD futures may have reversed out of a possible Master Cycle low at 97.47 this morning.  Overhead resistance is at 98.05-98.17, above which is a buy signal.

ZeroHedge observes, “Following the ‘mixed’ message from CPI earlier in the week (which the market perceived as dovishly cooler than expected), Producer Price Inflation was expected to accelerate in July’s data released today.

…and accelerate it did – dramatically with headline PPI rising 0.9% MoM (massively more than the +0.2% expected and the biggest jump since June 2022) sending PPI up 3.3% YoY (highest since Feb 2025)..”

”

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.

8:30 am

Good Morning!

SPX futures reached an overnight high at 6462.50, possibly on its way to 6500.00, near the Cycle Top.  The Cycles Model suggests more strength in the rally, at least to the end of the week.  However, this Master Cycle is running out of time as today is day 250.  In addition, the Cycle Top is at 6493.00 today, suggesting resistance at 6500.00.

ZeroHedge reports, “US equity futures are higher led by small caps (again) as the CPI print induces further short covering ahead of a now certain September rate cut, and a beta chase. As of 8:15am, S&P 500 and Nasdaq 100 futures were 0.2% higher after both indexes closed at fresh record highs on Tuesday, but were comfortably outpaced by the Russell 2000 index, as smaller companies were lifted by a largely benign inflation reading. Pre-mkt, Mag7 and semis are higher with Cyclicals outperforming Defensives, ex-Energy. Bond yields are lower as the curve bull flattens and USD weakens; the market strengthens its view on rate cuts in Sep, Oct, and Dec. Bessent calls for a 50bp cut in Sep. Today’s macro data focus is on mtge apps ahead of tmrw’s PPI which should help solidify PCE views.”

The Question is, where is the money flow coming from?  The answer may be Europe.  Note that any analysis of the market omits the influence of the turmoil in Europe.

The EuroStoxx 50 rose in  sync with the SPX from the April 7 low to the July 8 high.  Then the Stoxx reversed, making a bearish low on August 1.  Smart money is leaving European stocks and coming to the US.  Not only is the European economy in shambles, but NATO is preparing for war.  US stocks are considered a safe haven because of the strong US economy and the distance from the war zone.

VIX futures made a new low at 14.36, extending Wave (2).  This action may also bring in the terminus of the current Master Cycle by the end of the week.

TNX futures declined to 42.44 this morning,  while the Cycles Model considers a further decline to the Cycle Bottom at 41.04, extending the Master Cycle.  The bounce in Federal revenue may have been too little, too late as spending in July increased by almost 10%.  So, while the thought of further rate cuts offer encouragement to the markets, increased spending and the threat of war in Europe are moving things in the opposite direction.  The realization may soon catch up to reality.

Bitcoin continues its march higher, with the Cycle Top at 124811.00 a possible target.  In fact, it may touch 125000.00 briefly this 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.

8:15 am

Good Morning!

SPX futures consolidated beneath yesterday’s retracement high at 6407.25, leaving a complex fractal formation.  Regardless of the reactions to the CPI print this morning, SPX is poised for an imminent, sharp decline by the end of this week.  The uptrend may be broken and the support at the 50-day Moving Average may be tested or broken, as well.  After a 5-day ride on the escalator, the elevator may be engaged for the trip down.

Today’s options chain shows Max Pain at 6390.00.  Long gamma resides above 6400.00 while short gamma becomes strong beneath 6350.00.  Conviction is not strong in either direction.  However the 0DTE traders may pick up on any directional swing.

ZeroHedge reports, “US equity futures are flat into today’s CPI print, which is expects to show a modest increase in YoY prints (full preview here) with bond yields reversing an earlier drop. As of 8:00am ET, S&P and Nasdaq futures were down 0.1%, with Mag7 names mixed in premarket trading: NVDA is lower as China asks firms to not use the H20 chips; Intel gains after its CEO met Trump last night with Trump posting positive comments after the meeting. European stocks erase early gains of as much as 0.4%. The dollar gains for the second day while US Treasuries trade flat, with the yield on 10-year notes at 4.29%. Commodities are higher led by Metals; gold is flat at $3350 as is bitcoin which trades just under $119K. Trump announced he would nominate labor stats critic EJ Antoni for head of BLS. US economic data slate focuses on the CPI print at 8:30am; we also get the July federal budget balance at 2pm.”

8:30 am

VIX futures made a new low (15.21 thus far) at the announcement of the CPI this morning.

ZeroHedge observes, “With a new boss looming at The BLS, one wonders what the ‘old boss’ has in hand for today’s CPI data (with consensus seeing both headline and core YoY price changes ticking higher) after June’s consumer prices came in cooler than expected, disappointing the Trump Tariff Tantrum crowd. Will this time be different… Will the dreaded tariff-flation show up this time?

Headline CPI rose 0.2% MoM in July (as expected) and +2.7% YoY (cooler than the 2.8% expected) and in line with the June print…”

TNX is heading lower this morning.  The probability of reaching the Cycle Bottom at 41.05 in the next couple of days is very high, extending the Master Cycle low.

ZeroHedge comments, “Central banks have become the dominating force in financial markets.

Easing and tightening decisions move all assets from bonds to private equity. Their role is supposed to be to control inflation, provide price stability, and ensure normal market functions. However, there is little evidence of any success in achieving their goals. The era of central bank dominance has been characterised by boom-and-bust cycles, financial crises, policy incentives to increase government spending and debt, and persistent inflation. Recently developed economies’ central banks have taken an increasingly interventionist role.”

USD futures have declined beneath the 50-day Moving Average at 98.22, extending the Master Cycle a few more days.  Thus far it has bounced off Intermediate support at 98.02.  However, it may yet decline to the 97.00 area by the end of the week.

Gold futures may have declined beneath the 50-day Moving Average at 3347.33 this morning.  This may confirm the sell signal in gold.  The Cycles Model suggests a decline may last through early September.

The Lord’s Prayer

Our Father, who art in heaven, hallowed be thy name.  Thy Kingdom come, Thy Will be done, on earth as it is in heaven.  Give us this day our daily bread and forgive us our trespasses, as we forgive those who trespass against us.  And lead us not into temptation, but deliver us from evil.  Amen.

8:00 am

Good Morning!

SPX futures rose to 6405.70 over the weekend and are currently stalled at round number resistance (6400.00).  The Cycles Model anticipates the first possible major break in the uptrend about to occur with an acceleration of the decline by mid-week.  While commercials continue to buy, hedge funds became sellers last week and retail participation has thinned.

Today’s options chain shows Max Pain at 6385.00.  Long gamma comes in strong above 6400.00, while short gamma rules beneath 6350.00.

ZeroHedge reports, “US equity futures are up small with Russell/small caps outperforming, and yields dip at the start of a data-heavy week that will be pivotal for the Fed’s rate cuts later this year. As of 8:00am ET, S&P 500 contracts rose 0.2% after the index ended Friday just shy of a record high; Nasdaq futures were flat. In premarket trading, AMD fell 2.3% and NVDA was 1% lower after the chipmakers agreed to remit to the US government 15% of their revenue from AI chip sales to China in exchange for export licenses. Bond yields are lower as the curve flattens and the USD rises. Cmdtys are lower with Energy/Metals weaker but Ags stronger. Meanwhile, Trump asked China to increase soybeans purchases 4x ahead of tomorrow’s trade deadline although Lutnick last week said another extension is likely. Geopolitics is also in focus with a larger impact on EMEA and the Trump/Putin summit this Friday. Bitcoin rises back to $122K and Ethereum surge to $4350 overnight, hitting the highest since 2021. There are no major macro data prints today but market will focus on CPI on Tuesday.”

VIX futures are holding steady above Friday’s low.  Overhead resistance is at 16.68.  A probe above that level reinforces the buy signal.  The Cycles Model agrees that the uptrend is about to resume, with strength, this week.

The August 13 options chain shows  short gamma at 15.00-16.00.  Long gamma begins at 17.00 and remains strong to 25.00.

TNX is trading mid-range between its Master Cycle low, made last Monday, and Intermediate resistance at 43.37.  A rise above that level gives a buy signal that may extend to late September.  Note the Head & Shoulders formation that hints of higher rates ahead.

ZeroHedge remarks, “Mainstream economists were surprised last week after Donald Trump closed two massive trade and tariff deals, the first with Japan and the second with the EU. And this happened without triggering an economic crash.

The deal with Europe in particular has made a number of critics look rather foolish; there’s an army of mainstream economists who might reasonably acknowledge they misjudged the situation. But we all know that economists never admit their mistakes.”

USD futures have risen above the 50-day Moving Average at 98.24 this morning, giving a very strong buy signal.  There is still a massive dollar short contingent that may start feeling the pain of a squeeze.  The Cycles Model indicates a possible rise in the USD to mid-September.  Trending strength may appear by mid-week.

Euro futures are pulling away from being repelled from the Intermediate resistance at 116.60 and may be about to test the 50-day Moving Average at 115.84.  The Euro is currently on a sell signal and a further decline beneath the 50-day Moving Average offers reinforcement to that signal.  The Cycles Model suggests the Euro may decline with strength into early September as the War drums beat louder and investors flee the danger zone.

Gold futures may have declined beneath the 50-day Moving Average at 3346.56 today, creating a potential sell signal.   If correct, the Cycles Model anticipates a decline until early September.   A possible target may be the trendline near 33100.00.  A secondary target may be near the mid-Cycle support at 3036.54.

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

Good Morning!

SPX futures bounced to 6366.00 this morning as investors continue to buy the dip.  However, each successive bounce becomes smaller and unable to make new highs.  The case in point, the bounce from Friday’s low retraced 82%, while this morning’s retracement was 70%.  Meanwhile, support at 6310.00 is eroding and may be unable to preserve the “uptrend.”  SPX is on an aggressive sell signal.  A decline beneath Intermediate support at 6257.99 upgrades the sell to “confirmed.”  The 50-day Moving Average at 6155.98 holds the key to universal recognition that the “uptrend” is broken.

Today’s options chain shows Max Pain at 6345.00.  Long gamma is available above 6350.00 while short gamma resides beneath 6300.00.  The wild card is the 0DTE traders who may pile on in any directional move.

RealInvestmentAdvice considers, “While the market steadily rose throughout June and July, corporate insiders were growing less enthusiastic about the stock market. Less than a third of S&P 500 companies saw insiders purchase stock in their own company in July. That is the lowest figure since 2018. Moreover, the ratio of buys to sells for insiders fell to almost half of its longer-term average and now sits at its second-lowest reading in four years. Per Bloomberg’s article “Corporate Insiders Were Dumping Stocks Into July’s Record Rally“”

ZeroHedge reports, “US equity futures rise at the end of a week in which markets were buffeted by tariffs, geopolitical developments and corporate earnings. As of 8:00am ET, S&P 500 futures were up 0.3%, with the underlying index on track for its biggest weekly gain in five. Nasdaq 100 futures gained 0.4% as the AI narrative gets more fuel from TSMC and Softbank. In premarket trading, MegaCap Tech sees NVDA leading gains (+0.7%); sectors like Utilities and Consumer Staples are outperforming. Intel rises after CEO Lip-Bu Tan said he’s got the backing of the company’s board, following Trump’s call for his resignation; Tesla slipped after disbanding its Dojo team, upending its effort to build a supercomputer for driverless-vehicle technology. Headlines were quiet since yesterday’s close with no major macro data reporting today. The next key catalyst will be August 12 CPI release. Trump nominated CEA Chair Stephen Miran to fill Kugler’s expiring term which prompted JPM to now see a 25bp cut in September (vs. his previous December call), following by three 25bps cut in the next three meetings. Yields are flat and USD is lower. Commodities are mixed with oil and precious metals higher, while base metals are flat. Gold is in focus after US Customs and Border Protection clarified that Swiss 1kg and 100oz gold bars are subject to reciprocal tariffs. Otherwise its pretty quiet to close out the week with no major data and Fed’s Musalem speaking at 10:20am.”

VIX futures hovered near yesterday’s low beneath the 50-day Moving Average at 16.89.  The Cycles Model anticipates a show of strength this weekend, followed by multiple panic rallies over the next two weeks.  This may take investors by total surprise as there is little hedging to date.

The August 13 options chain shows short gamma residing at 15.00-16.00.  Long gamma starts at 17.00, but only extends to 25.00.

The 10-year Treasury bond yield remains beneath the triple resistance at 43.37-43.91.  There is still a chance of a final probe lower to the Cycle Bottom at 41.06, but it is diminishing quickly.  The Cycles Model suggests a very strong move higher on Monday which has the potential of resuming the uptrend.

ZeroHedge observes, “After two decidedly ugly auctions, including a poor 3Y on Tuesday and a very poor 10Y yesterday, moments ago the Treasury concluded the week’s trio of refunding auctions when it sold $25BN in 30Y paper. And this particular auction may have been the worst of the lot.

The final refunding auction priced at a high yield of 4.813%, which while lower than July’s 4.889% was not low enough, and with the When Issued at 4.792%, the auction tailed the When Issued by 2.1bps, the biggest tail since last August.”

USD futures have risen this morning after having made a probable Master Cycle low at 97.94 yesterday.  It has challenged the 50-day Moving Average at 98.28.  Should it close above it, there may be a buys signal on USD.  The Cycles Model suggests a probable rally to mid-September, anticipating a rise to the mid-Cycle support/resistance at 102.97.

Gold futures rose to 3534.10 while spot prices (chart) lag as it winds up its Master Cycle.  The tariff on Swiss gold has upended the market temporarily, causing a possible reversal that may last to September.  There  is no shortage of gold in the US.  The tariff is meant to curb the trade deficit.