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!

This morning’s SPX futures declined to 7643.60 thus far, raising the caution level.  While the  Intermediate support for the SPX may be valid, the trendline may not.  True support lies at 7611.00.  Should the SPX venture beneath it, a larger decline may ensue.  However, the fractal may yet be incomplete, allowing another probe higher to the Cycle Top at 7916.71, or higher.  Should that level hold, SPX may imminently receive a burst of energy that may send it higher.  This market isn’t giving away any of its secrets, making it a difficult one to follow.

The premarket VIX rose to 16.55, short of a breakout at 16.82.  VIX may also be short of completion, with  another potential decline ahead.

The US 10-year Bond Yield is also edging higher, to 48.14 thus far.  It may be due for a reversal imminently.  Let’s see what Bessent and Warsh may have up their sleeve.

I have a busy day of appointments ahead.  I may attempt to come back to the blog later this afternoon.

The Yen Broke above its Cycle Top resistance at 65.04 and appears to have stopped for the time being.  Should the Yen pull back, it may have left a Head & Shoulders formation projecting further gains.  Thus far the Yen has appreciated over 7% from its July low.  It is likely that there is at least one hedge fund in the Yen Carry trade that may be taken out on a stretcher.  This move has some far-reaching effects on world liquidity, including our own.  The Yen carry is  basically a short on the Yen.

ZeroHedge observes, “US Treasury Secretary went full judge, jury, and executioner on speculative yen shorts overnight with probably the most direct explicit jawboning we have seen in years…”

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.

10:41 am

BKX is testing its 52-day Moving Average at 187.90 this morning after making a possible Master Cycle high on Friday.  A decline beneath the 52-day may produce an aggressive sell signal.  Confirmation of that signal may lie beneath the trendline at 186.00.  Liquidity may be getting thin with knock-on results showing in the BKX and in Bitcoin.  Weakness has made an appearance today and may double down by the weekend.  The new master Cycle may show up as a decline to the end of October.

8:15 am

Good Morning!

SPX futures went lower this morning, toward Intermediate support and the trendline at 7635.77.  The  bull market trend remains intact, but it is coming under pressure.  While inflation risks are continuing to build, the Cycles Model suggests the SPX may go higher.  The indicated target for the current rally may be the Cycle Top resistance at 7910.02 in the next week.  however, should the Master Cycle extend, a potential target may be 8000.00 or higher.

ZeroHedge reports, “US futures fell as Brent crude approached $100 a barrel, chasing Shanghai crude which is now trading above $102, reinforcing expectations that central banks will have to raise interest rates to contain inflation while a key CPI print looms on Friday.”

The  premarket VIX rose above the Triangle trendline at 15.00, topping out at 15.94.  Should it remain beneath the 53-day Moving Average at 16.30, it may resume its decline beneath the trading channel near 14.00.  The Cycles Model suggests that the VIX may be nearing its Master Cycle terminus, but an extension is not out of the question.

The US 10-year Bond Yield has dropped beneath the Cycle Top support at 48.03 this mornig, taking pressure off Treasuries temporarily.  The Cycles Model suggess a possible week of sideways-to-lower yields.  The likelihood of a test of the Head & Shoulders neckline at 47.00 may be operative.

ZeroHedge remarks, “The latest global bond sell-off has revived the idea that markets are fretting over unsustainable public finances. As concerned as I am by this issue in the longer term, the recent bond market weakness at the moment should be seen more as a continuation of the long normalisation from the historic anomaly of the 2010s.”

The US Dollar Index may be testing its August 20 low.  The Cycles Model does not anticipate a new low.  However, the USD may show weakness over the nxt week or possibly longer.   While the dollar debasement theme is still commonly held, the US dollar remains the strongest currency internationally.    A bounce above the mid-Cycle support/resistance line at 99.18 may introduce a buy signal.

Crude oil broke out above its July high at 93.50 this morning, then pulled back.  There may be a retest of the declining trendline near 84.50 before a resumption of the uptrend.   What follows may be a resumption of a very strong probe toward the cycle Top resistance at 111.96.

ZeroHedge observes, “Geopolitical risks in the Gulf pushed Brent crude futures toward $100 a barrel overnight as Yemen’s Iranian-backed Houthi rebels launched new attacks on Saudi cities and economic infrastructure.”

Gold was repulsed at the mid-Cycle resistance at 4554.09 ovwer the weekend and may be resuming its downtrend.  The current target may be the 52-day Moving Average at 4236.50.  However, it may go lower.  The Cycles Model suggests gold may be winding up its Master Cycle shortly.

Bitcoin has declined beneath its long-held trendline near 80000.00 and given a possible sell signal.  A further decline beneath 76000.00 may confirm the sell.  The Cycles Model suggests a possible panic decline should it break through that low.  The new Master Cycle may extend to late October.

The Agricultural Index continues to consolidate above its Head & Shoulders neckline at 420.00.    The Cycles Model infers a possible retest of the neckline before moving higher.  Note that Trending Strength may return this weekend and may extend up to two more 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.

11:31 am

The BKX may have made its Master Cycle high yesterday at 190.02, creating a lower, secondary high near its Intermediate resistance at 188.71.  A reversal may be imminent.    A decline beneath the trendline near 185.00 may produce a sell signal.  The new master Cycle is projected to decline to late Ocober.  The cross-currents of a rising Yen and negative excess liquidity may be putting a strain on the banking system.  Higher 10-year rates may put a nail in the coffin.

8:45 am

SPX futures pulled back this morning, weighed by the better-than-expected Jobs Report.  The good news/bad news dichotomy may not last, as it reveals strength in our economy that other leading countries do not have.  The SPX remains on an uptrend that may support new all-time highs while other major economies do not..

ZeroHedge earlier reported, “US futures are choppy, trading between unchanged and modestly higher, ahead of today’s jobs report which sees a modest increase in August payrolls (but the risk is for another negative print,”

ZeroHedge later reports, “A four standard deviation beat for non-farm payrolls this morning (good news) is triggering ugly reactions (bad news) across markets with rate-hike odds for September ripping back up near recent highs (despite no signs of inflationary wage growth – in fact it is slowing).”

The premarket VIX plummeted to 13.80 this morning, challenging the December low.  This action may be called a throw-under as it escapes the lower confines of the trading channel.  Throw-overs/unders may last up to a week before resolving in the opposite direction.

The US 10-year Bond Yield spiked higher this morning after Waller dismissed elevate energy prices and tariffs as inlfationary.  The Cycles Model suggests that yields may remain on a sideways tangent between the Cycle Top at 47.97 and the neckline of the Head & Shoulders formation at 47.00 for possibly another week.

The USD may have resumed its rally after yesterday’s plunge on Warsh’s statement.  A rise above the mid-Cycle resistance at 99.17 may prove the setback to be only temporary as the trend may be pointing higher.  A buy signal rests above the mid-Cycle.  A breakout above the 52-day Moving Average at 100.26 may bring more buyers.

Say “goodbye” to the Yen Carry Trade as the Yen has risen 3.3% in  a single day and 5.5% since late July.  The move may have been tied to policy intervention by the Bank of Japan and a possible rate hike being considered at their Spetamber 18 meeting.  The Yen Carry Trade had a loan rate of as little as .10-.25% a year ago.  Rate have risen since then  while the BOJ considers raising their loan rate from 1.00% to 1.25%.  This does not account for the rising currency costs.  This may have been a large sourc e of liquidity in the pas decade.

Crude oil pulled back this morning after a very active month.  It did not break out above the July high at 93.50, leaving the possibility of a further correction to test intermediate support at 84.10.  Should the decline tarry, crude may decline as far as the 52-dAY moving Average at 80.32.  The Cycles Model anticipates the return of trending strength in the latter half of September.

Gold plunged to 4365.00 this morning before a bounce, testing Intermediate support at 4320.00.  The Cycles Model anticipates a lower test at the 52-day Moving Average at 4228.82 before a more substantial bounce.

ZeroHedge observes, ”  It was reported yesterday that the Netherlands just shifted approximately 86 tonnes of its gold reserves from New York and Ottawa to London, explicitly citing “increasing geopolitical unrest” and the need to prepare for severe crises.”

The Agriculture Index declined to 434.73, testing the neckline support near 420.00.  The Index is at an interesting phase.  Should it find support at the neckline, it may go considerably higher.  Alternatively, a decline beneath the neckline may reset the H&S  formation.  The Cycles Model considers a possible burst of trending strength this weekend, which may trigger the H&S formation.

ZeroHedge advises, “Chicago rice futures are on track for their largest annual gain since 2003 as the grain that feeds much of the world becomes increasingly expensive amid an intensifying El Niño and diesel-fuel and fertilizer supply disruptions stemming from turmoil in the Strait of Hormuz and the Russia-Ukraine war.”

Bitcoin was repelled yesterday by its Cycle Top resistance,  currently at 82842.00.   It then declined beneath its trendline, near 80800.00, offer ing an aggressive sell signal.  A decline beneath 76250.00 may confirm the signal.  The Cycles Model suggests a possible decline to late October.  While the mid-Cycle support at 69840.94 may provide a bounce, The full Cycle target may by the Cycle Bottom at 56839.00.

The Lord’s Prayer

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

11:20 am

BKX has bounced from its trading channel trendline  and is currently challenging Intermediate resistance at 188.64.  It may go nominally higher, suggsting a possible target at 191.00.  However, the current Master Cycle may be running on fumes.   A trendline break at 185.00 may offer a sell signal.

7:45 am

Good Morning!

SPX futures rose to a morning high at 7686.30, continuing its uptrend after a bounce from the trendline and Intermediate support at2619.14.   This may be considered an aggressive buy while the crowd may be waiting for a breakout above its previous high at 7771.48 to commit a long position.  Many are using calls to get leverage on this move.

ZeroHedge reports, “Futures are flats with Tech in line and small caps lagging even as bond yields dip 1bp across the curve, ignoring the continued rise in oil.”

NDX futures are testing yesterday’s low, but haven’t broken it.  Tech earnings continue to rise, but investors are unwilling to commit thus far.  That may change, should the current Cycle extend.  The Cycles Model suggests the rally may resume for another 2-3 weeks.  The Cycle Top resistance and upper trendline are in conjunction, currently at 31490.27 as a probable target for a likely probe higher.

The Premarket VIX is rising from the Triangle trendline as it may complete the current Master Cycle in the next week or so.  The VIX fractal is very compressed and in need of some relief.  This week’s surge in volatility, although somewhat reduced, may be a foretaste of action in the coming week or so.

The US 10-year Bond Yield has pulled back from its Master Cycle high, dropping beneath the Cycle Top support at 47.91.  The Cycles Model places TNX between the Head & Shoulders neckline and the Cycle Top over the next two weeks.  Should the neckline hold, the Head & Shoulders Target may be considered.  The US Treasury’s preference for refinancing long-term debt with T-bills may leave the bond market subject to the overnight rate sooner than expected.

ZeroHedge notes, “A top Federal Reserve official said he would be “inclined” to keep interest rates on hold, highlighting divisions among the US central bank’s governors as they prepare for a crucial vote this month.”

Crude oil rose to 93.14 this morningas it continues it uptrend.  It may test its July 23 high at 93.50 this week.  Should it remain beneath it, Crude oil may trend sideways for another week.  The longer view is that crude may continue higher, testing its Cycle Top at 110.93 by mid-October.

Gold has made a 50% retracement of last week’s decline, suggsting the bounce may be over.  The Ccyles Model suggests a possible reversal may occur.  Should gold decline beneath Intermediate support at 4308.46, it may taget the Cycle Bottom in the next week.

The Agriculture Indes may be pulling back to its neckline near 424.00.  It has proven to be a highly volatile index that may have a few surprises left.  Should the pullback stop at the necklne by this weekend, it may resume its uptrend toward the Head & Shoulders target.  However, it may decline further, changing to a more powerful dynamic.  We may know very soon which it may be.

Bitcoin may be attempting a final rise to or above the trendline at 81000.00, which represents major resistance.  Should it break through, the trend may remain higher.  However, the Cycles Model shows waning strength at this point.  A break beneath 76000.00 tells us Bitcoin may be going lower.  Bitcoin may have been the beneficiary of excess liquidity, which has now turned negative.

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 tested the low by declining to 7609.50, testing Intermediate support at 7615.23 this morning, then bounced into positive territory.  It did not need to test the 52-day Moving Average at 7567.44.  Cycle Top resistance is currently at 7887.23 and rising, shile the uupper trendline may reach 8000.00 in a couple of weeks.  Domestic analysis shows that excess liquidity is negative,  buybacks are fading and there isn’t much incremental buying power left.  However, they miss an important point from the international economy.  Japan may be on the verge of collapse.

ZeroHedge reports, “US equity futures are lower with Tech underperforming as oil prices / bond yields move higher (although off session highs), both in response to an acceleration in “kinetic hostilities” in the Middle East.”

Nikkei 225 futures dropped to 63760.00 this morning after being unable to rise above its 52-day Moving Average at 67149.48.  Its current Master Cycle is a long lasting one, ongoing to mid-November.  While investors are acting “edgy” around the SPX, the decline in the Nikkei will force investors to find safe harbor elsewhere.  The DJIA and SPX offer alternatives as the strongest indices globally.

The premarket VIX rose marginally higher this morning to 16.82 thus far.  The VIX has carried a volatility deficit since the start of the Iran war.  Despite rising stock prices, VIX may continue its rise.  There are indications of large dealer losses in the options market that may be revealed in the coming days.

The US 10-year Bond Yield pulled back this morning from its Master Cycle high.  TNX is due for a back-test of the Head & Shoulders neckline near 47.00.  It may go lower, but should it stay above, the next phase of the uptrend may be powerful.  The Cycles Model shows about 2 weeks of potential weakness before moving higher in strength.

Crude oil made a new high this morning before pulling back.  The Cycles Model suggests possibly sideways-to-lower prices over the next two weeks before strength reappears.  While Venezuela oil does not immediately translate into lower gas prices, the impact of this new fuel source may take months to develop.

ZeroHedge notes, “The exploding cost of energy is most obviously being felt at the gasoline pumps for Americans as evidenced in this Visual Capitalist graphic where prices in some states are up over 60% in six months in the wake of the Iran war.”

The Agriculture Index made a new high this morning, then pulled back.  This may not be a reversal from the Master Cycle as yet.  The Cycles Model show another bout of strength coming this weekend that may produce a top.  What may follow is a back-test of the head & Shoulders formation before resuming its uptrend.

ZeroHedge remarks, “The Bloomberg Agriculture Spot Index (BCOMAGSP) posted its largest monthly gain since the chaotic days of the Arab Spring riots and is nearing a breakout above its 2023 highs, signaling a broad-based acceleration in agricultural commodity prices.”

Gold bounced from its Intermediate support at 4294.19 this morning, beginning a possible correction that may test the 52-day Moving Average at 4217.00.   Ths is not to be mistaken for a reversal…just a bounce.  Hope springs eternal, as investors may try to pile in to the “dip.”

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.

3:42 pm

The decline may have gone faster than anticipated.  The low at 7611.20 nearly made the target at 7600.00, suggesting completion.  Onward and upward!

7:45 am

Good Morning!

SPX futures declined to 7638.50 this morning, just ticks above the previous low at 7838.17.  I had mentioned yesterday that a decline beneath 7638.00 creates a short term sell signal.  This may create a possible “bear trap” as the SPX declined toward the 52-day Moving Average currently at 7563.38, where it meets a rising trendline.  Should the trendline hold, the SPX may then rise toward the Cycle Top resistance currently at 7881.03 over the next 2-3 weeks.  It may go higher, if the Cycle extends.  Wall Street is recommending a reduction of exposure to equities.  They may buy what you sell.

ZeroHedge reports, “Stock futures are set to start the new month on the backfoot – having weathered a variety of challenges to post a gain for August – with tech lagging as a global selloff pushes yields to the highest level since 2008.”

The premarket VIX rose to 15.96 this morning.  A breakout may occur above 16.31 as investors buy protection against the possible decline in equities.  The VIX may then rise to the to of the Ending Diagonal near 19.50 in the next few days.

The US 10-year Bond Yield broke out this morning.  The futures hit 48.01 thus far while the cash market (TNX) rose to 47.90, above its Cycle Top at 47.77.  Investors may likely chase this breakout, but the Cycles Model suggests it may be a fast move, as it has the potential to reach 50.00 in the next week or two.  A fast and disorderly rally in yields may be a setback for stocks.

The US Dollar is consolidating above its mid-Cycle support after having risen through it.  Additional strength may be imminent as yields rise.  The next resistance level is the 52-day Moving Averageat 100.38.  Above that, the dollar shorts may panic, boosting the USD toward the Head & Shoulders neckline.  A breakout may be in the works, as the new Master cycle may last to mid-October.

ZeroHedge notes, “Last week’s financial media was full of apocalyptic headlines: “$40 trillion in national debt!” “U.S. debt in a doom loop!” “The end of the dollar is near!”

Gold and bitcoin soared in lockstep with the dollar doom and gloom. If you took the headlines at face value, one would assume the dollar was already toast and U.S. Treasuries were worth no more than digital confetti.”

Crude oil rose above its previous high, indicating a continuation of the uptrend.   Trending strength has shown up alreaady today and is likely to reappear later this week or early next.  The current Cycle may last to mid-October with a minimum target near 100.00.  A more likely target may be the Cycle Top at 110.77.  Should it go to 119.48 or higheer, a massive Cup with Handle may be formed with an average target near 184.00 sometime in 2027.

Gold futures continued its decline in strength today as it seeks out Intermediate support at 4283.00, where a short-term bounce may occur.  The current Master Cycle may have up to 2 weeks left as it may target the Cycle Bottom currently at 3855.00.

The Ag Index continues higher as it solidifies its rally above the Head & Shoulders neckline.  It may be nearing the end of this Cycle, possibly at the end of the week.  Once the top is in, a pullback to the neckline may be in order.

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 7672.90 this morning, beneath round number support at 7700.00.  A probe beneath its prior low at 7638.00 indicates a possible further decline to test  the 52-day Moving Average at 7560.02 over the next two weeks.  While institutional investors are lightening up on equities, retail investors are buying calls.  The dip may not be ready to be bought.

ZeroHedge reports, “US stock futures dropped in thin trading with most traders out as summer draws to a close, while oil prices jumped after the US and Iran exchanged attacks for first time in weeks.”

The premarket VIX rose to 15.29 this morning, above the lower Triangle trendline.  Investors had given up on buying protection last week, just as the price is being reset.  The Cycles Model suggests a probe higher to the top of the short-term trading channel just beneath 20.00.

The US 10-year Bond Yield may have hit escape velocity, remaining above the Head & Shoulders neckline at 47.00.  The Cycles Model anticipates TNX rising to a new high this week, then a possible retest of the neckline.

ZeroHedge observes, “The US $40 trillion debt has dominated global headlines. However, although the US fiscal challenges are relevant, we must remember an important lesson. Fiscal policy is not about who wins but who loses first.”

USD is consolidating near Friday’s high as it is now on a buy signal.  The Cycles Model suggests a contiued rise to mid-October, giving the dollar the ability to break above its Head & Shoulders formation.

Gold futures are consolidating near Friday’s low, after having left a sell signal by declining beneath the mid-Cycle support/resistance at 4548.74 on Friday after investors piled  in at the high.  The Cycles Model suggests a possible further decline   to mid-September where the Cycle Bottom may come into play.

Investing.com remarks, “Gold prices pulled back on Monday as investors continued to reassess the Federal Reserve’s rate outlook following Chair Kevin Warsh’s hawkish inflation message, while rising oil prices added to inflation concerns.”

Crude oil rose above the downtrend line as itt rose out of a minor Trading Cycle low last week.  The Cycles Model suggests a possible surge, propelling it higher this week.  The longer term outlook shows crude rising through mid-October.  The Cycle Top resistance at 110.73 is a critical point during this rally.  Should it rise above it, neww all-time highs may be expected.

The Agriculture Index may have made its Master Cycle high on Friday.  The Cycles Model suggests a reversal may not come until the end of the week, so no action is anticipated until the final high is recorded.

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 above 7700.00 this morning, confirming yesterday’s breakout after the dip.  It may be on a renewed buy signal that may take effect after a back-test of support (Jackson Hole).  Should it break down beneath 7700.00, however, we may see a further decline to the 52-day Moving average near 7561.00 before a final rally.

ZeroHedge reports, “US stock futures are flat and rates rise ahead of today’s main event: Fed chief Kevin Warsh’s Jackson Hole speech at 10am ET (full preview here) as traders seek clarity on his economic outlook and his strategy for lowering inflation back to the Fed’s 2% target.”

The premarket VIX is consolidating beneath the trendline, suggesting a further drop to the bottom of the trading channel near 14.00.  VIX is very calm, suggesting a bounce may be forthcoming.

The US 10-year Bond Yield was stopped at the neckline this morning.  The Cycles Model suggests the decline may continue to the 52-day Moving average at 45.94 over the next week or so.

ZeroHedge observes, “A stellar 2Y auction, a subpart 5Y, and it only makes sense that we end the week with a perfectly average sale of $44BN in 7Y bonds.”

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.

Good Morning!

SPX futures consolidated inside yesterday’s trading range as it may emerge out of a minor Trading Cycle.  It is helpful to be aware of this lesser Cycle, although it often does not sync with the Master Cycle.  It may provide queues for buying the dip in a longer trend.  The Master Cycle has 2-3 weeks left, with the balance of this week as a base-building oportunity for the next probe higher.  Nvidia reports earnings after the close today, which may provide some volatility.

ZeroHedge reports, “Stock futures are are flat and Treasuries slipped while oil stumbled heading into today’s PCE report and NVDA earnings.”

The premarket VIX also consolidated this morning, with indications of going higher.  The Cycles Model suggests a strong surge of strength over the next few days.  The outcome may be a test of theEnding Diagonal trendline near 19.50.  Should it follow this ending fractal, the boost higher may be followed by a decline to new lows over the next few weeks.

USD is also consolidating beneath the dual resistance at 99.13.  The Master Cycle has flipped, but has not gained enough strength to emerge above its 200-day Moving Average.  The Cycles Model suggests that Trending strength may return over the weekend.  The new Master Cycle may probe higher to mid-October.

The US 10-year Bond Yield continues to decline toward its 52-day Moving Average and lower trendline at 45.85.   While yields temporarily decline, the honeymoon may already be over for Warsh.  Hard questions may be asked at Jackson Hole.  The fact is, since 1949, the Fed has not been in charge of the trend in rates.  The Cycles Model suggests the “line in the sand” may be testd next week.

ZeroHedge observes, “After last week’s post “Bessent buyback” fireworks, which sent yields on a rollercoaster ride in the subsequent days, many were very curious to see how today’s sale of $69BN in 2 year paper, the week’s first coupon auction, would go and whether Bessent inadvertently had impaired primary market issuance. In the end, the auction went through without a glitch.”

Crude oil continues to decline to a triple support area near 79.06 this morning.  Time and price may offer a reversal of this correction by Friday.  The Cycles Model suggests the trend may resume higher to mid-October, with the Cycle Top at 110.71 as the intended target.

ZeroHedge observes, ” Brent crude futures dropped for a third session as Iran and Oman advanced plans for a temporary maritime corridor through the Strait of Hormuz.”

Gold has declined from yesterday’s peak.  The first alert of a reversal may lie beneath the mid-Cycle support at 4544.00.  Should it remain above that level, the indicators suggests another probe higher may be forthcoming.  A possible target in that event may be 5000.00.

The Ag Index is consolidating beneath yesterday’s high.  The Cycles Model allows another week or so to test the high or make a corrective low before  before a new Cycle may emerge.  The timing and fractal structure are complex and may need more time to sort things out.

ZeroHedge gives notice, “Warnings on Wall Street about a confluence of stressors building deep within global agricultural supply chains are growing louder by the week, raising the risk of a food crisis next year.”

Bitcoin has pulled back from the Cycle Too resistance, currently at 81680.00.  It may be due for a pullback, perhaps to 75000.00, before proceeding higher.  The current master Cycle extends to the end of September.  A really above the Cycle Top may engage one of the Fibonacci levels illustrated in the chart.   A target near 100000.00 is not out of the question.

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

BKX reversed from its trading channel trendlineand may proceed higher,  Altough there is a possibility of makeing a new high near 200.00, the Cycles Model is less than forthcoming about it.  The question is, will Bessent’s TGA plan work?  Stay alert for a break of the trendline near 185.00.

ZeroHedge observes, “US Treasury Secretary Bessent took out a tactical nuke in saying he could use $1trn from the Treasury General Account to fund Special Military Operation Twist bond buybacks vs. the $2bn per round increase we saw last week. That looks a lot like the ‘Whatever It Takes’ mentioned yesterday: his former mentor Stan Druckenmiller is not a fan, apparently.”

8:15 am

Good Morning!

SPX futures rose up to 7699.50, against round number resistance, setting up a possible buy signal above 7700.00.  The expected correction may be over, having made a minimal 35.5% retracement.  This may be a second buying opportunity for both the SPX and NDX.  SPX may be ready to make its final probe to its all-time high over the next several weeks.  The coming rally may be subdued for the balance of this week.  However, September may come in with a bang.  as it breaks higher.  The minimal target for this rally may be the trendline near 7925.00.  However, should the rally extend beyond mid-September, the rally may “throw over” the trendline with a possible target near 8100.00.

ZeroHedge reports, “Global stocks rose as chipmakers rebounded, with falling bond yields adding support to risek sentiment after Brent crude slid below $90 a barrel, down more than 3% after a New York times reports that “evacuated foreign service officers could begin heading back to their posts as early as this week… suggesting Washington does not anticipate a renewal of full-scale conflict with Iran.”” 

NDX futures rose to 29344.90 thus far, overtaking the 52-day Moving Average at 29303.39 and offering a possible buy signal after a gut-wrenching decline.  Should it follow through, the upper trendline near 31800.00 may be its intended target by mid-September.

The premarket VIX is consolidating jn a narrow range this morning.  Investors may distrust the rally in equities this week, increasing their hedges against another decline.

The US 10-year Bond Yield dropped back after a near-breakout (47.44) on Friday.  The cash intervention from the Treasury General Account may be an attempt to produce a massive short squeeze.  The Cycles Model suggests it may temporarily be so, with the current Master Cycle headed for the 53-day Moving Average at 45.83 over the next week.   It should be noted that history does not support this move as a long term solution.  The uptrend may remain intact.

ZeroHedge remarks, “I predicted back in May that the bond market would “break” Washington. Last week we saw signs of that with the Treasury’s increased intervention at the long end of the curve.”

The USD is consolidating beneath its mid-Cycle resistance at 99.03 this morning.  The consolidation may continue through the week, with a possible surge in strength in September.

Crude oil tested the Intermediate support at 81.97, then rose above it.  A poossible bounce higher is anticipated, as the Cycles Model offers a return of strength by the end of the week.

ZeroHedge observes, “There continue to be clear signals that the White House is moving away from the potential for renewed military action and instead settling in for a long economic siege campaign targeting Iran, on a permanent basis.”

Gold made corrective high this morning at 4697.30.  It may have reversed, completing its Master Cycle.    A decline beneath its mid-Cycle support at 4541.87 may confirm the reversal and offer a sell signal.  Should that be so, the new Master Cycle may take gold considerably lower by mid-October.

The Ag Index may have made its Master Cycle high yesterday at 425.89.  In the process it may have left a new, higher neckline for a Head & Shoulders formation.  It may be due for a two-week correction down to the Cycle Top support at 403.65.  Should it find support there, it may proceed higher to mid-January.  Additional targets for the Ag Index are, 575.00 and possibly 880.00.