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.

10:51 am

BKX has crossed beneath the rising trendline, offering a sell signal.  Confirmation may come at the mid-Cycle support located at 126.07.  This must be taken seriously, as the BKX is the canary in the coal mine for market liquidity .

7:45 am

SPX futures declined to a morning low of 5984.40 thus far.  The double trendline near 6025.00 was crossed yesterday afternoon, creating a probable sell signal.  The overnight action added plausibility to that scenario.  There is likely to be a bounce today to retest resistance before moving lower.  The ;reversal was made precisely on the Cycle turn date.  The next level of supports lies on the mid-Cycle support at 5822.35.  The 50-day Moving Average is well beneath that at 5951.25 due to the deep decline in April.  The 1987 trendline lies near 5600.00.  Most analysts view this decline as a brief pullback, only to resume the rally to new highs.  On the other hand, the Cycles Model suggests a much deeper decline lasting to mid-July.

Today’s options chain shows Max Pain at 6045.00.  Long gamma may begin above 6060.00 while short gamma rules beneath 6020.00.

ZeroHedge reports, “Stock futures, bond yields and the dollar are all lower after Trump ramped trade war tensions back up saying he wants to set unilateral tariff rates higher/reimpose higher duties within the next two weeks to on several countries before the July 9th deadline while Bessent floated extensions for countries negotiating in “good faith.” Market jitters also intensified amid heightened tensions in the Middle East, with speculation that Israel may attack Iran sending oil surging. As of 8:00am, S&P 500 futures were down 0.6%, near session lows, putting the benchmark on track for its first back-to-back loss in three weeks as the S&P fails to hold the 6k level despite a dovish CPI and a strong 10Y auction. According to JPM, “the combination of a disappointing US/China deal (so far), higher oil prices (new geopolitical risk unlocked), and the inability of MegaCap Tech to hold gains (profit taking as we approach ATHs) seems to be the combination that reversed stocks lower.” Nasdaq 100 futures are down 0.5% with Mag7/Semis weaker; ORCL rose 7% after projecting cloud infrastructure sales will jump more than 70% in the current fiscal year, while Boeing shares tumbled 8% after an Air India Boeing 787 traveling from Ahmedabad in India to London’s Gatwick airport crashed shortly after taking off, in what was the most serious accident involving the US planemaker’s most advanced widebody airliner. . Small caps are underperforming as the yield curve bull flattens. The USD is lower (new 52-wk low) and commodities are selling off with natgas and gold the bright spots. Today’s macro focus is PPI while a 30-year Treasury auction at 1pm ET will provide a key test of sentiment, given concerns about mounting deficits and the cost of Trump’s signature tax bill.”

VIX cash market rallied to 18.87 this morning after having made its Master Cycle low on day 258 of the former Cycle.  The new Cycle offers the potential of a 5-week rally that may exceed the April high.  Today is a wake-up call that thing may not proceed as before.  The Cycles MOdel recognizes the change in trend at the mid-Cycle support/resistance line at 19.75.  Most analysts agree that they may notice a change in trend above the 50-day Moving Average at 24.82.

The June 18 options chain recognizes Max Pain at 19.00.  Short gamma rules beneath 18.00, while long gamma kicks in the door above 20.00.

TNX is testing the 50-day Moving Average at 43.63 this morning.  However, it may not stay at the low.  The Cycles Model introduces a new surge of Trending Strength today.  It may possibly be doe to the $110 billion short-term paper and the $22 billion 30-year bonds being offered at auction today.  The Cycles Model anticipates 4 more weeks of rising yields that may break out above the neckline of the Head & Shoulders formation.

USD futures declined to 97.60 this morning, testing the Cycle Bottom at 97.59.   It may have made a Master Cycle low today, on day 258 of the current Master Cycle.  Should that be so, the Cycles Model projects a rally to early August as international tensions heat up.

Gold futures rose to 3414.60 this morning as it tests the Cycle Top at 3422.33.  This may be the completion of a Trading Cycle, which is not expected to make a new high.  The excitement is tangible, but liquidity may be an issue as yields begin to rise.  In addition, the Yen is also rising, choking off alternate sources of cheap liquidity.

Crude oil  rose to 69.01 this morning then made a brief pullback to 66.73 .  It has risen above the mid-Cycle resistance at 68.42, confirming its buy signal.  Once the pullback is done, it may resume its rise to the Cycle Top at 77.71.  The Cycles Model continues to support the rally to mid-July, leaving the short sellers in tears.

The Lord’s Prayer

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

7:30 am

Good Morning!

SPX futures rose to 6047.00 in the overnight session, approaching the 6050.00 target referred to last week.  It is likely that the SPX may reach or exceed 6050.00 today before a reversal takes place.  Today is day 258 of the current Master Cycle, the “bullseye” for this retracement.  Even Goldman says to “Start selling this junk rally.”  Equities are in the exhaustion phase, but may be quite volatile.  The correction of the April decline is being traced out in a series of zig-zags, which lend an air of chaos and frustration to analysts, as they duplicate at multiple degrees of trend.  Thus,, the reputation as the “most hated” rally.

Today’s options chain shows Max Pain at 6000.00.  Long gamma resides above 6050.00, while short gamma becomes strong beneath 5950.00.  Looks quiet thus far…

ZeroHedge reports, “US equity futures dropped into today’s CPI print after traders weren’t moved by the US-China trade talks, which saw the two two sides agree on a framework to implement last month’s Geneva deal with few actual details.  There’s also nervousness ahead of inflation data: a hot reading would be a big risk factor for a market near record highs (see full preview here). As of 8:00am ET, S&P and Nasdaq 100 futures traded 0.2% lower but were off session lows; pre-market Mag7 names are mostly higher with TSLA (+2%) the standout after a contrite Elon Muskusk tweeted “I regret some of my posts about President @realDonaldTrump last week. They went too far.” Semis and Cyclicals are poised to outperform. In other trade news, US/Mexico were close to a deal on steel tariffs by using import caps, which would be higher than the previous cap, and would remove the 50% tariff on steel below said cap; this looks like a reversion to 2018 levels and may be a template for talks with Canada. The G7 summit will carry additional weight as we are a month away the expiration of the 90-day tariff delay, with only a US/UK framework on the tape. Elsewhere, the EU is said to see talks with the US going beyond a July 9 deadline. The yield curve is twisting steeper with 10Y yields higher, the USD is slightly higher and commodities rise with crude and gold higher after Trump told the NY Post that he’s getting “less confident” about nuclear talks with Iran; natgas and base metals also rallied with Ags are down. The key event today is the CPI report at 8:30am ET where economists expect a relatively tame number, with core inflation up 0.3% in May. Positioning suggests a hotter print will be punished more than a dovish one will be rewarded, according to JPMorgan.”

VIX futures remain peaceful near 17.00, above the rising “floor” defined by the Master Cycle low made last Friday.  The VIX Cycle low usually precedes the SPX Cycle high by a up to a week.   This may give us fair warning that the uptrend in equities is nearing its climax.

The June 18 VIX options chain promises some excitement, if nothing other than the sheer volume of puts and calls.  Max Pain stands at 19.50.  Short gamma remains strong between 16.00 and 19.00.  Long gamma may begin above 20.00 and extends to 100.00.  Remember that 75% of all options expire worthless.

Bitcoin continued to trade beneath Monday’s (swing) high at 110543.89.  This may reveal the end of a trading (60-day) Cycle inversion emanating from the April 7 low.  However, Trading Cycles are lesser in magnitude and may offer only secondary trending information.  The Cycles Model infers an ongoing decline to the end of July.

TNX is due to complete its correction near Intermediate support at 44.03 before resuming its rally.  Once the pullback is complete, the next phase may be a very strong (possibly a panic) rally to the Cycle Toop at 47.87 followed by a challenge of the neckline of the Head & Shoulders formation.  Note that today’s Treasury auction features a $39 billion 10-year T-note auction early this afternoon.  Tomorrow’s auction features $22 billion in 30-year bonds along with $110 billion of short-term paper. The Cycles Model anticipates rising rates into July.

ZeroHedge comments, “The Treasury just executed the largest bond buyback in history—$10 billion in U.S. debt propped up with “existing funds.” They call it “normalization,” but make no mistake—this is 100% government intervention in our monetary system.”

Japanese Yen futures bounced from the 50-day Moving Average at 69.06  this morning to 69.25, signaling the start of a new Master Cycle.  A buy signal may be obtained as the Yen rises above Intermediate support/resistance at 69.30.  This move, coupled with the rising 10-year Treasury note, may choke off liquidity to the markets in short order.  The Yen carry trade may be under water and may become more so as the Yen continues to rise.

Crude oil continues its rally in a burst of strength as it approaches its next resistance at the mid-Cycle level.  There may be a pause at the mid-point, but the Master Cycle rally may continue to mid-July in opposition to the gold Cycle, which may be declining in the same period.

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.