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 may be consolidating beneath Friday’s high at 5528.11, with a weekend high at 5523.10 and a low of 5490.60.  A break beneath Intermediate support at 5484.86 produces a sell signal.  Meanwhile the DJIA made its high on Wednesday at 40376.11.  The SPX exceeded its Fibonacci target at 5491.00 and proceeded to test the 1987 trendline which provides the ultimate resistance.  The immediate Cycles  view is that  SPX may decline to mid-June with a series of panic events starting on Tuesday, if not sooner.  The longer term Cycle view is that the decline may continue with high volatility to mid-May 2026.  This is not a market in which to be long.  However, certain trading desks are turning bullish.

Today’s options chain shows Max Pain at 5475.00.  Long gamma begins at 5500..00 while short gamma may start beneath 5450.00.

ZeroHedge reports, “US equity futures are little changed, reversing earlier losses as much as 0.5%, as global markets are broadly in the green amid a burst of positive sentiment, which even pushed JPM’s recently bearish trading desk to turn tactically bullish this morning (more in a subsequent post). As of 8:00am ET, S&P and Nasdaq futures are down 0.1%, but well off session lows. Nvidia shares fell 1% in premarket after the Wall Street Journal reported China’s Huawei Technologies is getting ready to test a new and powerful artificial intelligence processor that the company hopes can replace some products made by Nvidia; other Mag7 names are mixed with Cyclicals/Semis under pressure and Defensives catching a bid. Europe’s Estoxx advanced 0.5% over early London session with gains led by info tech and consumer staples; Asian stocks were also broadly higher with Japan erasing all post-Liberation day losses.  US equities are focused this week on the tech sector, with Microsoft, Apple, Meta and Amazon all reporting earnings. The week also includes the April US jobs report, due Friday. Bond yields are higher as the curve bear steepens and the USD starts the session stronger. This is a data-heavy week but today’s focus is on regional Fed activity but the key’s this week are NFP, JOLTS, ISM-Mfg, and 25Q1 metrics.”

VIX futures have risen to 26.02 this morning as it may be emerging from a Master Cycle low on Friday.  The Cycles Model shows multiple panic rips to the upside starting this week.  The upside trend may resume to the middle of June.

RealInvestmentAdvice observes, “Market Finds Some Hope

Last week, we discussed the issue with the spat between President Trump and the Federal Reserve chairman, Jerome Powell. As noted then:

“While the markets await the next Federal Reserve meeting, the uncertainty over monetary policy weighs on markets as much as the uncertainty about tariffs. This past week, the market reversed some of its gains from the massive “tariff reprieve” surge. With the MACD back on a buy signal and money flows turning positive, buyers are tepidly stepping back into the market. The 20-DMA continues to act as overhead resistance, defining the current downtrend. While there is undoubtedly a risk of another test of recent lows, which should be expected and why caution remains advisable, a break above the 20-DMA would lead to a rally to the 50-DMA. (Monday’s article addressed the “Death Cross” and what it means for investors.)“”

TNX is emerging from a Master Cycle low made on Friday.  A buy signal for yields may be made above 42.88 with confirmation above the 50-day Moving Average at 43.14.  Trending strength may return by the end of the week, according to the Cycles Model.  A test and possible breakout of the Cycle Top at 48.04 is anticipated.  Investors are questioning the long-held view that Treasuries are a safe haven in times of market distress.  Most commentators believe that interest rates are political and can be manipulated.  That view may come up against a hard wall as interest rates rise in a stagnating economy and a looming war.

On Wednesday last week Bitcoin made its Master Cycle high.  Since then it has been consolidating beneath the high.  A sell signal may be made with a decline beneath the mid-Cycle support at 91211.84.  The Cycles Model calls for a decline to mid-June.  There are multiple potential panic-down days starting mid-week.  The retracement appears to be over.

USD futures are consolidating beneath the high made on Wednesday.  It is on a buy signal above the Cycle Bottom support at 98.70.  The USD appears capable of getting a double dose of energy on Wednesday which should wake up investors to the change in trend.  Analysts are calling the USD low in April “Structural” because   it has dipped beneath previous 2-year lows.  On the contrary, it may be a false flag to turn sentiment in the wrong direction, providing fuel for a huge short-covering rally.

Today’s “spike rally” in gold today may offer hope to investors that the uptrend is still alive.  However, the trend may have turned, leaving investors high and dry.  A decline beneath the trendline at 3250.00 offers a sell signal with further confirmation beneath it.  The Cycles Model tells us to prepare for a decline lasting until mid-July.

The Lord’s Prayer

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

9:30 am

Good Morning!

My laptop is still having trouble downloading chart images.  However, a quick summary is sufficient,  Yesterday I observed that three different technical markers suggested that the top of this rebound may be at 5491.00.  Yesterday the SPX closed at 5484.77.  The overnight futures went as high as 5524.60.  However this morning cash market went to 5491.85 at the open, then started to decline.  I don’t know whether that is the top or not, but the issue will be resolved early this morning.

Best wishes,

Tony

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.

10:24 am

BKX completed its Master Cycle at a retracement high and is due for a steep decline.  A decline beneath the Head & Shoulders neckline at 99+.68 may set off an unanticipated panic decline lasting up to a month.

I am leaving for a long weekend in another state.  Hopefully I will be back on Monday for more reports.

7:45 am

Good Morning!

SPX futures went lower in the overnight session to 5327.50.  Should it remain above 5310.00, it has the ability to rise to a new corrective high.  The fractal structure becomes complete above 5491.00, where multiple resistances lie.  The SPX remains beneath the 2987 trendline, threatening the long-term uptrend.  A breakdown beneath 4835.00 raises the threat of a decline to 3500.00.  Meanwhile, retail investors are buying the dip while hedge funds and institutions are selling the ramp.

Today’s options chain shows Max Pain at 5350.00.  Long gamma begins at 5445.00 while short gamma starts beneath 5300.00.

RealInvestmentAdvice comments, “We have good and bad news for investors who want to know whether the stock market will soar, stall, or plummet. First, the good news. This article presents the market path for what lies ahead. Unfortunately, the “right” path is among three likely scenarios.”

ZeroHedge reports, “It’s risk-off price action this morning, with US equity futures lower, rates rallying across the curve, macro credit opening softer, while the USD trades broadly lower. The two-day rally in US stocks fizzled amid mixed Trump signals on China tariffs as the president floated a fresh levy timeline while simultaneously denying easing efforts and Beijing called for full rollback of all US duties. As of 8:00am S&P futures slipped -0.3% as China maintained a defiant stance over tariffs imposed by Trump, but were off session lows as investors continue to live headline to headline; Nasdaq futures dropped 0.2% with all Mag7 names in the red; NVDA (-1.5%), TSLA (-1.6%), and AAPL (-1.2%) are leading the losses. With Trump reigniting tariff volatility, IBM warning on federal cuts and China denying trade talks entirely, the rotation out of US risk remains intact. Europe was mixed, Real Estate (+1.16%) and Autos (+0.71%) outperforming but Banks (-0.76%) and Travel (-0.69%) lagged. Overnight, China responded to the recent headlines regarding “US-China talk”: Beijing pointed out that “there are absolutely no negotiation on the economy and trade between China and the US and called to cancel all the unilateral measures on China. Meanwhile Trump downplayed the idea of millionaire tax rate, one that some Republicans sees as a way to pay for the economic package. Bond yields are lower and USD is weaker; 2-, 5-, 10-yr yields are 4.5bp, 4.8bp, 3.3bp lower.  The dollar extended its decline (-0.56%), with gold climbing (+1.3%) as investors hedge against prolonged US policy risk. VIX is flat (+0.28%), MOVE dipped (-1.48%) and USYC2Y10 (+1.6%) suggesting caution is returning despite the bounce in crude (+0.74%) copper (+0.57%) and gold (+1.4%). Flows are risk-off: SPY -$1.98B, QQQ -$689M and IWM -$614M, while GLD picked up another +$643M and XLU +$109M. Looking ahead today, we have durable good orders, initial and jobless claims, existing home sales, as well as non-voter Kashkari speaking.”

VIX futures remain neutral this morning.  Structurally, it may decline further near the 50-day Moving Average at 24.58.  VIX is within the turn window for the Master Cycle.  While early, the reversal may coincide with that of the SPX.   The Cycles Model suggests a possible panic Cycle beginning next week.

The April 30 options chain shows Max Pain at 26.00.  Short gamma is strongest between 20.00 and 25.00.  Long gamma lies above 30.00 to 40.00.  Sentioment favors a calmer market.

TNX rose above the 50-day Moving Average at 43.24 this morning, potentially resuming its uptrend.  Yesterday’s low may have completed the Master Cycle on day 261.  A continued rally above the 50-day indicates a buy signal for the 10-year yields.  The next visible resistance lies at the Cycle Top at 48.03.  The Cycles Model shows rising yields through the end of May.

USD futures are consolidating above the Cycle Bottom support at 98.84 after being launched from its Master Cycle low.  It is on a buy signal.  The lament of the crashing USD has been a bit overdone.  The latest analysis calls for rising inflation and a weaker USD.

Gold futures are consolidating abive the trendline near 3250.00.  A Cycle reversal has been made and confirmation lies beneath the trendline.  Should it decline beneath the trendline, the Cycles Model suggests a decline lasting until mid-July.  Gold’s time to own will come again, but the next two months may be punishing for longs.

Crude oil is correcting beneath the Cycle Bottom support.  A rise above that suport at 62.85 reiterates the 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.

1:22 pm

Indications are that, possibly by the end of the day, the SPX may reach its potential target.  Three different indicators all agree that the target range may be 5491.00 – 5500.00.  The 50% retracement is at 5491.00.  The fractal expansion is at 5491.00 and the Intermediate resistance, currently at 5500.00, may reach 5491.00 by  the end of the day.  An alternate possibility may allow the target to be reached by tomorrow morning.

8:30 am

Good Morning!

SPX futures have risen to 5424.80 as it completes a heretofore correction to the 1987 trendline and Intermediate resistance at 5513.26.  This rally may be the last of its kind, should it not exceed the 1987 trendline.  The market loves to prove the majority wrong as the rally flies in the face of bearish sentiment.  The Cycles Model allows this final probe today on day 261 of the Master Cycle.  The potential target limit may be 5530.00-5550.00.  The final probe must exceed the prior high at 5481.34, its minimum target.

Today’s options chain shows Max Pain at 5275.00.  Long gamma may begin above 5300.00 while short gamma may start beneath 5250.00.

ZeroHedge reports, “US futures jumped and the dollar stabilized after president Trump said he has no intention of firing Powell, easing some fears on the Fed’s independence, while he also plans to be “very nice” to China in trade talks and sees China tariff coming down substantially which hinted a potential pivot in trade policy. As of 8:00am ET, S&P futures are up 2.3%, with Nasdaq futures surging 2.7%. Pre-market, Mag 7 names are all higher led by TSLA (+6.4%, after Musk said that his time on DOGE will significantly drop next month), NVDA (+4.9%), AMZN (+4.1%) and META (+3.7%). Intel rose 3% on reports it will cut more than 20% of its staff, a move aimed at eliminating bureaucracy. 10y TSY yields are down 10bps to 4.30% as longer-dated Treasuries rally, recovering from selling on concerns about the Fed’s continued independence; the USD reversed earlier gains. Commodities are mostly higher led by oil (+1.6%) and base metals; gold is 1.3% lower.

VIX futures have declined to 27.81 this morning.  It may be completing the next Master Cycle in the next week as low at the mid-Cycle support at 19.44.

Today’s option expiration is no longer available.  The April 30 options chain shows short gamma beneath 25.00 while long gamma strengthens above 35.00.  Options are clearly bearish on the VIX.

TNX futures have sunk to 42.80, beneath the 50-day Moving Average at 43.25.  The potential downside target may be the mid-Cycle support at 42.21.  Today is day 261 of the Master Cycle, allowing a deeper low than the April 16 low.

ZeroHedge comments, “For much of April, and certainly following the vomit-inducing surge in 10Y yields two weeks ago, the biggest question in the market has been whether China is dumping their roughly $1 trillion in treasuries. And while we won’t know until June when the April TIC data hits (and even then the data is at best mixed), moments ago we found something just as important: the Chinese are certainly no longer rushing to buy US paper, something we learned following today’s 2Y auction which saw a dramatic plunge in Indirect (i.e. foreign) demand.”

I have several appointments later this morning.  I may return to comment in the afternoon.  Tomorrow’s reoport may also be shortened, as I am planning a trip beginning tomorrow.

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.

7:50 am

Good Morning!

SPX futures rose to a 35.5% retracement overnight at 5226.80, then eased back down beneath 5200.00.  It is likely that the decline may extend further before a significant bounce appears.  Beyond the round number supports the next level to defend is the April 7 low at 4835.00.  There is little buyer conviction, which may allow the options market to rule the day.

Today’s options chain shows Max Pain at 5150.00.  Long gamma may begin modestly above 5200.00.  Short gamma is strong beneath 5100.00.

ZeroHedge reports, “US equity futures are higher, attempting to pare back some of the sharp losses from Monday’s prior session and extending yesterday’s late day buying where the S&P found support at the 5,100 level; according to JPM, there is some optimism around a trade deal with either Japan or India and a deal is a likely milestone for stocks to finally bottom. As of 8:00am ET, S&P and Nasdaq futures are are up 0.8%, off session highs of 1.3%, with Mag 7 and Semis all higher with TSLA earnings after the close. This week 25% of the S&P reports with implied vols among the highest since peak-COVID. Chinese tech names are reportedly considering US listings despite “market ructions”, via Bloomberg citing sources; Walnut Coding, CloudSky, Zaihui & Zhonghe said to be considering IPOs in the US. The yield curve is twisting flatter and USD seeing a bid following 4 days of losses. The commodity space is mostly higher led by Energy but gold remains the top story as it set a new ATH rising above $3500 before easing back. The macro data focus is on regional Fed activity indicators (Philly non-mfg and Richmond Fed at 8:30am/10:00am ET), but the more impactful data is tomorrow’s Flash PMI prints. We also get a slew of Fed speakers (see below) alongside numerous heavyweight earnings including Tesla.”

Taking the long (weekly) view, SPX may have completed a 60-month [A]-[B]-[C] fractal in March.  Confirmation of that (Ending Diagonal) fractal may be contingent upon declining beneath the April 7 low at 4835.04.  Should that event occur, the next level of support lies at  the October 10, 2022 low at 3491.58.

VIX futures pared its gains down to 32.07 this morning.  Vols are not coming down, remaining above the Cycle Top support at 31.51 and on a buy signal.  This is a sign that there may be another probe higher, exceeding the August 5 high.  The Cycles Model gives the probability of another two weeks of rally in the VIX.

Tomorrow’s options chain shows Max Pain at 31.00.  Short gamma lies beneath 30.00.  Long gamma strengthens at 35.00 and runs to 60.00.

TNX is maintaining its gain from yesterday’s probe to 44.07 thus far.  It may be due in the next few days to a Trading Cycle low near  the mid-Cycle support at 42.20.  The next period of strength ma come in early May, while the current Master Cycle may continue its advance through the end of May.  Powell is being set up as the potential fall guy should interest ratees rise further.  The sad fact is that the Fed has always followed the lead of the markets with rare exception.  While tariffs are being blamed for rising rates, the real issue of a looming war is being swept under the table.

Bitcoin continues to rise as it approaches mid-Cycle resistance at 90323.00 on day 267 of the Master Cycle.  The Cycles Model shows a high volatility reversal potential on Wednesday.  Further resistance of the 100-day Moving Average at 90850.00 is directly above.

Gold futures may have met their target high at 3509.06 this morning.  Care must be taken here as the apparent Cycle high is about two weeks early.  Should there be a reversal, look for gold to decline beneath the Cycle Top support at 3149.48 to verify a possible change in trend.

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.

10:56 am

The Ag Index is pulling back from the 50-day Moving Average, offering investors more opportunity to “buy the dip.”  The current Master Cycle may extend through mid-June.  Once it returns above the 50-day the next visible resistance may be the Cycle Top at 408.76.

ZeroHedge observes, “America’s declining cattle herd is nothing short of alarming, and some ranchers call it a “national security threat” to the nation’s food supply chain. This continues to be a major theme fueling record-high cattle prices on the Chicago Mercantile Exchange and beef prices at the local supermarket. Elevated interest rates and soaring input costs under the Biden-Harris regime years have made it increasingly difficult to maintain or rebuild herds—challenges that are expected to persist early in President Trump’s second term.”

10:27 am

BKX has resumed its decline toward the neckline of the Head & Shoulders formation at 99.68.  Liquidity is vanishing fast from the markets (see below).  The Cycles Model suggests the decline may last to mid-May.

The Japanese Yen continues its upward probe above the Cycle Top resistance at 70.70, possibly testing the September 16 high at 71.55.  Today may be the last day of the current Master Cycle, suggesting a pullback may be due shortly.  However, there is another reversal due at the end of April that may propel the Yen to new highs later in May.  The Yen carry is endangering the low interest loans made at .1%.  The twist is that the payback may have risen as much as 13%, leaving the yen carry debtors in a possible default.

7:35 am

Good Morning!

NDX futures have declined to 17968.60 this morning, declining beneath the Cycle Bottom support at 18018.68 and confirming the sell signal.  The next probable support level is the April low at 16542.20.   The current Master Cycle may decline to mid-June, per the Cycles Model.  Last week’s rally which ended on Monday stopped short of its usual parameters involving a retest of the trendline and 50-day Moving Average at 20082.00.  This truncation does not bode well for the the health of the NDX going forward.  The race to build a new AI model is burning a hole in the Mega cap corporate cash flow which may disappoint investors.  Critical support lies at the 1987 trendline at 15200.00.

SPX futures have declined to a morning low at 5209.80, beneath the Cycle Bottom support at 5264.96.  This confirms the sell signal.  The Cycles Model suggests 6 weeks of decline may be ahead.    SPX turned down last week without challenging the 1987 trendline, a sign of investor exhaustion.  Critical support lies at the current April 7 low at 4835.00.  Should SPX find support there, there may be an outside opportunity for the SPX to rally to new highs.  We may see the SPX struggle to maintain that support this week.  However, there are factors that  may dictate a continued decline

Tooday’s options chain shows Max Pain at 5300.00.  Long gamma may begin above 5350.00 while short gamma strengthened beneath 5250.00.

ZeroHedge reports, “With most global markets still closed for Easter holiday, US equity futures start the week sharply lower while the dollar and Treasuries plunge (10s and 30s are 8bp and 10bps higher as the yield curve twists steeper) as traders reacted to the possibility that Trump will try to remove Powell. As of 8:00am ET, S&P futures are down 1.3% and Nasdaq futures slide 1.5% with Mag7 names under pressure with INTC/NFLX among the bright spots in TMT. European stock markets were largely still shut for a public holiday. The dollar is set up to have its worst day in 2 weeks, plunging to a 15 month low, and sending precious metals soaring: gold was above $3400 at last check. Energy is weaker, Ags/base metals are higher. There is also trouble in trade deal  land with Japan pushing back on US demands for its trade deal, while China warns trading partners against mistreatment in any deal made with the US. It’s a quiet day with just the Leading index on today’s calendar (10am); Fed’s Goolsbee speaks at 8:30am.”

VIX futures rose to a morning high at 32.89 above the Cycle Top at 31.24.  That action reconfirms the buy signal.  That leaves the August 5 high at 665.73 as the next resistance to the rally.  The Cycles Model indicates a possible new high in about two weeks.

The April 23 options chain shows Max Pain at 26.00.  Short gamma may begin beneath 25.00 while long gamma strengthens above 30.00.

TNX futures rose to 44.10 over the weekend, while the newly-opened cash market shows a high of 44.01.  It has risen from a low on April 16 at 42.75, surpassing the 50-day Moving Average at 43.28 and creating a buy signal for yields.  The Cycles Model calls for a 6-week rally that may exceed the Cycle Top resistance at 47.99.

USD futures declined to a morning low at 97.68 and may have reached the Master Cycle low on day 259 within target parameters of 96.00-98.00.  Should today be the low, we may see a very sharp move beginning as early as Wednesday to the upside.  The USD demise may be postponed.  The Cycles Model infers a rally may dominate the USD actions until mid-June.

Bitcoin rose to 87772.39 this morning, extending its Master Cycle to day 266.00.  While the Cycles may often be precise within a few days, occasionally extraneous events may speed up or postpone them within certain parameters.  Today’s extension has as much to do with the fractal structure being completed as it has to do with the USD making a new low today.

Gold futures rose to 3435.90 this morning and may be approaching a new Master Cycle high at a possible round number resistance of 3500.00.   Why is gold going higher in the absence of inflation?  The reason may be political instability.  Europe appears to be preparing for war.  With that realization, banks and other institutions are buying gold, not for the appreciation, but for an asset that will survive a war since most currencies will default.

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.

3:05 pm

SPX has been unable to complete its retracement, leaving a truncated fractal.  The retracement barely made the 50% level, which is unusual this close to an all-time high. A close beneath the daily Cycle Bottom support at 5265.00 confirms a sell signal.  The Cycles Model suggests a decline may follow until mid-June.

The DJIA was able to make a higher retracement by 13 points on April 15, qualifying it for a Master Cycle high.  Prepare for a possible decline lasting to mid-June.

10:19 am

BKX was unable to make its final surge to a new retracement high.  The Cycles Model infers a decline in the making by next week.  It may decline beneath the neckline of the Head & Shoulders formation by the end of next week.  The evidence produced by the Cycles Model suggests a series of panic down days in early May.

9:59 am

The Ag Index is on its way higher after surpassing the 50-day Moving Average at 388.59.  For the past month the Ag index has been in an “accumulation phase.”  Today the buy signal is twice confirmed.  The Cycles Model suggests the rally may continue through mid-June.  The potential taret may be the Head & Shoulders neckline at 421.00.

7:45 am

Good Morning!

This morning’s SPX futures rose to 5341.86, above the Cycle Bottom where it had closed yesterday.  Futures are easing lower.  Should the SPX open beneath the Cycle Bottom at 5270.00, the decline which started yesterday may continue.  Corporate insiders are buying shares ahead of the buyback blackout ending.  However, they may be assuming the resumption of the uptrend.  As you can see, the SPX is well beneath the long-term uptrend, the 1987 trendline.  The Cycles Model suggests that, once the decline takes hold, it may continue for the next two months.  The green Master Cycle may have ended on Monday in a truncated fashion, suggesting the turn may have occurred prematurely.  There may be a slight risk of the SPX running up to the trendline by Monday.

Today’s options chain shows Max Pain at 5350.00.  Long gamma may begin at a highly contested 5400.00 while short gamma strengthened beneath 5300.00.

ZeroHedge reports, “US equity futures have bounced back from yesterday’s rout, following positive signals from initial US-Japan trade talks after President Donald Trump said there was “big progress” to strike a deal fueling optimism over trade negotiations. Still, as of 8:00am they are well off their highs after DJIA heavyweight member UnitedHealthcare plunged 20% after slashing outlook on care costs and after President Donald Trump berated Federal Reserve Chair Jerome Powell for being slow to cut interest rates; S&P 500 futures rising 0.4% having earlier risen as much as 1.2%, while Nasdaq futures gained 0.8% with Mag7 names mostly higher as US-listed shares of TSMC rose 3.8% in premarket after forecasting sales for the second quarter that topped estimates. European stock fell and Asian markets rose. Volatility is becoming less extreme as the VIX retreated to around 30, down from last week’s peak of about 52. The dollar edged higher while the yen drops, lagging G-10 currencies. Gold dipped from record highs but was still trading above $3300 while oil rose for a second day after the US vowed to reduce Iran’s energy exports to zero.”

VIX futures declined to 30.22, but recovered back above the Cycle Top support at 31.08.   The VIX remains on a buy signal.  The Cycles Model anticipates a series of panic-up days over the next three weeks that may break records.  Today over $2.6 trillion of notional options exposure will expire, including $1.2 trillion of SPX options and $480 billion notional of single stock options.

The April 23 options chain shows Max Pain at 25.00.  Short gamma resides between 13.50 and 21.00.  Long gamma may begin at 30.00 and extends to 60.00.

TNX is declining further this morning and may be hours away from a Master Cycle low.  The potential target may be the Intermediate and mid-Cycle support at 42.19.  The Cycles Model suggests a very strong reversal on Monday, followed by rising rates through mid-May.  Should TNMX exceed the 50-day Moving Average at 43.20, the reversal may have been accomplished with a new buy signal.

ZeroHedge remarks, “As US equity markets continue to fall – and recession calls mount from establishment elites, despite strong ‘hard’ data’ – President Trump lashed out at Fed Chair Powell via TruthSocial this morning exclaiming that Powell’s termination from his position can’t come quickly enough, arguing that the US central bank should have lowered interest rates already this year, and in any case should do so now.

ZeroHedge reports, “After last week’s basis trade collapse (which we now know has already claimed several relative value multistrat hedge funds), many were dreading the outcome of today’s 20Y auction, a reopening of 19-Year, 10-Month cusip UJ5. It turned out they have nothing to fear.

The $13BN auction priced at 1:01pm ET at a high yield of 4.810%, up sharply from last month’s 4.632% and the highest since February; more importantly it stopped through the When Issued 4.814% by 0.4bps, the second consecutive stop through (if fractionally weaker than last month) and 3rd in the past 4 months.

USD futures may be consolidating near the Cycle Bottom at 99.23 in order to make the final probe beneath it.  A potential target may reside between 96.00 and 98.00.  The Cycles Model suggest a strong turning point on Monday, followed by a panic rally by mid-week.

Gold futures rose to 3371.89 during the overnight session, but have come back down in the red in a likely extension of the Master Cycle to day 274.  The Cycles Model calls for a three-week decline from the top.  There may be at least two panic down days in the interim.  Keep in mind that the uptrend has lasted for 9 years and is due for a major correction.   On an inflation-adjusted basis, gold has finally caught up to the 1980 high.   

Crude oil futures rose to 63.67, rising above the Cycle Bottom resistance at 63.22.  Crude is on a confirmed buy signal.   The Cycles Model suggests the rally may last to the end of May.  The narrow trading channel suggests the rally may rise above the Cycle Top at 79.58.  A longer-term target may be the March 2022 high at 126.42.

Bitcoin is struggling to keep above the 50-day Moving  average at 84205.00 and Intermediate support at 836156.00.  Once beneath these levels, Bitcoin is on a sell signal until mid-June.  The Cycles Model calls for an immediate surging decline followed by two possible panic down days next week.  This doesn’t appear healthy, at all.  China may have instigated a form of capital controls with a twist.

ZeroHedge comments, ” Local governments in China are reportedly seeking ways to offload seized crypto while facing challenges due to the country’s ban on crypto trading and exchanges.

The absence of clear rules on how authorities should manage seized cryptocurrency has led to “inconsistent and opaque approaches,” which some lawyers fear could open the door to corruption, according to an April 16 report by Reuters.”

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.

3:13 pm

SPX did not complete a final thrust higher today.  While there may be a belated attempt at pushing it higher in the next day or so, it has crossed beneath the Cycle Bottom at 5280.50 creating a sell signal.  Take appropriate action.

ZeroHedge notes, “Update (1330ET): Key highlights from Powell’s prepared remarks:

Powell said: “tariffs are highly likely to generate at least a temporary rise in inflation.”

“The inflationary effects could also be more persistent. Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and, ultimately, on keeping longer-term inflation expectations well anchored.

Powell again stressed the central bank’s focus on preventing potential tariff-driven price hikes from triggering a more persistent rise in inflation.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said.”

8:10 am

Good Morning!

SPX futures declined to 5307.10 this morning, as it prepares for a final thrust to the trendline just above 5500.00.  The 50% retracement value is 5491.00.  Should there be a surge in the next few days. it may reach as high as the mid-cycle resistance at 5768.00.  This market may be full of surprises in the next few days.

Today’s options chain shows Max Pain at 5400.00.  Long gamma may strengthen above 5425.00 while short gamma appears beneath 5350.00.  Today appears to be a quiet day in the options market.

ZeroHedge reports, “US equity futures are lower after NVDA unveiled the US government restricted export of its H2) chips to China, sending the stock -6% lower pre-market and dragging the broader market lower; Europe chip giant ASML Holding NV reported disappointing results further denting the semi space. As of 8:00am, S&P futures are down 0.7%, and Nasdaq futures slide 1.5%, with the balance of Mag7 and Semis, all weaker (AMD -6.2%, AVGO -3.3%). Futures had been even lower overnight but bounced shortly after 4am ET after China said to be open to trade talks with some preconditions, including (i) consistency of message and respectful approach; (ii) one person to negotiate that is not Trump but has his authority; with the goal of having a signable agreement before the leaders meet in person. Bond yields are mixed as the curve twists steeper while USD weakness continues, sending the Bloomberg dollar index to a 6 month low. Commodities are rallying today with all 3 complexes higher; WTI crude oil futures are up about 1%, gold futures more than 2%, extending their recent advance. Precious is standing out to the upside, with gold hitting a new record high above $3300. Today’s macro data focus is on Retail Sales.”

VIX futures probed to 33.63 in the overnight session, rested above the Cycle Top support/resistance at 30.63.  That action may be a buy signal for the VIX.

Today’s options expiration shows Max Pain at 21.00.  Short gamma lies between 15.00 and 20.00.  Long gamma may begin at 22.00 and strengthens above e350..0.

TNX slipped beneath the trendline and the 50-day Moving Average at 43.36, but appears to be strengthening on day 254 of the Master Cycle.  This may be a bit too soon for a reversal, as there may be a strong likelihood of completing the decline to the mid-Cycle support at 42.19.  Figures from the basis trade blow-up last week are beginning to emerge.  Total assets in the multi-strategy trades are near $1.5 trillion.  A lot is at stake her in attempting to mitigate losses in the Treasury market.

Bitcoin is slipping beneath the 50-day Moving Average at 84182.00.  This may produce a sell signal with legs, as today may bring strength to the new trend.  The Cycles Model suggests the decline may last until mid-June with the August low as a possible target.

Gold futures edged up against the April 11 high, but did not exceed it.  Investor enthusiasm is at a fever pitch, so what could go wrong?  Commentators are gleefully predicting an imminent collapse in the USD and continued rally in gold.

USD is hovering just above the April 11 low on day 254 of the Master Cycle.  The decline may extend over the weekend, as mentioned last week, the probable target may be in the range of 96.00-98.00.  Momentum traders are shorting the USD, putting on more downside pressure.

The Japanese Yen continues its climb this morning to a new high at 70.39.  This action is wreaking havoc with the Yen carry trade as the year-to-date appreciation exceeds 11%.  Those that borrowed in Yen at .10% now have to contend with capital losses far exceeding any possible savings from the lower interest rate.  This action is draining liquidity further from the markets.  The Cycles Model suggests a final surge to the neckline at 71.55 may be in order over the next few days.  The Cycles Model signals a wild double reversal in the next 2-3 weeks that may propel the Yen above the Head & Shoulders neckline.

The Lord’s Prayer

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

9:50 am

BKX has just a few more days left in the Master Cycle to make a  new high.  The normal retracement would allow BKX to rise to the mid-Cycle resistance at 123.25.  The 50-day Moving Average lies at 125.83.  However, time is running out.  Should TNX run lower, it may propel BKX to its targets.  A lot his riding on the bond market at this time.

8:15 am

Good Morning!

NDX futures are consolidating near the 38.2% Fibonacci level.  The bounce stil has further to go.  The minimum retracement would be near the 50% retracement value or to the Intermediate resistance at 19505.99.  The Cycles Model points toward the multiple resistance including the 30-month trendline, mid-Cycle resistance, the 50-day Moving average and the 61.8% retracement level at 20000.00-20362.23.  Analysts are asking, “Does the price action continue to turn away from US assets?”

SPX futures are also consolidating during this shortened week.  The minimum target for this retracement may be at 5500.00, where the 50% Fib retracement may be met.  Intermediate resistance is declining at a rate of 18 to 20 points per day and currently at 5601.00.   The 50-day Moving Average and mid-Cycle resistance are at 5769.36, right on top of the 61.8% Fibonacci level.  However, that may entail running above the 1987 trendline near 5575.00.  Having reviewed the price levels, the time element may not run out until early next week.

Today’s options chain shows Max Pain at 5380.00.  Long gamma may begin at 5400.00 whil short gamma resided beneath 5300.00.  Options may not be playing a big role in price action today.

ZeroHedge reports, “US stock futures swung between gains and losses after a two-day advance as traders focused on signs that the Trump administration may add more tariff exemptions to ease the economic turmoil of the trade war. As of 8:00am S&P 500 were down -0.3% and Nasdaq futures dipped -0.2%, although both indexes were in the green just minutes earlier with moves now happening so fast and jittery, it has become meaningless to keep tabs. Boeing sank 4% in premarket trading after China ordered airlines not to take any further deliveries of the company’s jets; elsewhere, Mag7 and Semis are leading TMT higher with Fins higher into earnings. Other Cyclicals like Energy/Industrials are mixed with Materials higher led by gold miners. In Europe, stocks pushed higher after Trump floated a pause in auto tariffs.  Bond yields are +/- 1bp as the curve twists flatter; USD is flat as it looks to ease 5 consecutive days of losses. The commodity complex is weaker with crude and base weaker, gold up, and Ags mixed. The macro data focus is on import/export prices and Empire Mfg plus earnings from GSIB Banks, transports, and a HC (and Defensives factor) bellwether, JNJ.”

The Shanghai Composite is consolidating near its high of the week  above the Lip of the Cup with Handle formation.  The next probable turn date may be on Friday, while our markets are closed.  Thus far the PBOC has been buying stocks to maintain the optics of stability, but that may give way to economic and technical reality as it declines back beneath the lip.  Any advantage that Chinese stocks may reveal may disappear as the index declines to or beneath the Cycle Bottom.

ZeroHedge comments, “Last week we explained how the escalating trade war between the US and China has gradually transformed into a theatrical war of who has the upper hand on any given day. And since it takes a long time for trade obstructions to hit the underlying economy, investors are keenly eyeing the stock, and especially FX, markets for any and every (early) indications of who has the upper hand (even if they are, as we show below, completely false).”

VIX futures have made a marginal new low at 29.59 which may mark the end of the retracement, or nearly so.  The 61.8% retracement level is near 33.50.  The 75% retracement lies near 27.75.

Tomorrow’s options chain shows Max Pain at 20.50.  Sjprt ga,,a resided betweem 15.00 and 20.00.  Long gamma begins at 21.00 and runs as high as 75.00.

ZeroHedge remarks, “Post peak fear

Volatility has cooled from its April highs, but the market’s nerves are still frayed. While the VIX term structure flattens and SPX range compresses, deeper cracks—like MOVE’s stubborn grip and skew distortions—remind us that healing takes time.

We have seen volatility

April VIX future (UX1 Index) is now at 29 vs being 39 last Tuesday… Aside from February 2018 (‘volmageddon’) … highest 10d realized volatility in last 10+ years … yes, above COVID (GS derivatives).”

TNX bounced off the trendline and 50-day Moving Average at 43.42 this morning.  However, this decline only made a 38.2% retracement thus far.  Today  is day 253 of the Master Cycle, either suggesting the retracement may be over, or a very sharp move may be made in the next week that could bring the 10-year yield lower.  While the basis trade appears contained and foreign selling does not appear in the fore, there may be pressure to keep yields down.  The fact that bot stocks and bonds took a hit last week has shaken investor confidence.

USD bounced off Friday’s low, signaling a potential early end to the Master Cycle.  However, there may be room to decline another 3 points by early next week.  Should that occur, we may see a powerful rally out of the low.

Bitcoin is consolidating beneath Friday’s high.  Time may be running out for another probe higher.  By next week the opportunity to raise price levels may have run out.  In fact, the Cycles Model suggests a very strong downdraft may be revealed by mid-week.

Gold futures may be consolidating above its upper trendline near 3220.00.  An aggressive sell signal may be obtained upon the decline beneath 3200.00. While gold may only have a 3-4 week window for a decline, it may have the potential to turn into a collapse.

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.

10:59 am

BKX may have made its Master Cycle high on Wednesday, on day  253.  Should it not make a new high, the Cycles Model infers a decline that may last to mid-May.  A decline beneath the neckline at 101.00 may induce a decline to 60.00.  Be careful.  Things may get nasty in the next week.

7:45 am

Good Morning!

NDX futures rose to a weekend high of 19086.00.  The weekly chart shows that the NDX has not yet challenged the long-term uptrend line near 15200.00.  This has sparked a debate whether the NDX is in a bear market or not.  Considering the steepness of the rally since October 2022, gains have been forfeited, but the long-term uptrend is still intact.  That may soon change, as another Cyclical reversal may be due next week.  The challenge for the NDX is whether it may rally above a triple resistance directly overhead.  The 30-month trendline (not shown) lies at 20000.00.  The 10-week (50-day) resistance lies at 20113.36 and the 61.8% Fibonacci retracement lies at 20036.00.  The challenge is to overcome these resistances to overcome a possible bear market reversal.  Investors are fatigued after last week’s panic-induced moves in both directions.  This week promises to be calmer, but there is work to do in order to re-establish the long-term uptrend.

SPX futures are higher, having attained a weekend high of 5447.10.  It is nearing the long-term (1987) trendline near 5500.00.  The 50% Fibonacci retracement value is at 4985.00, while the Intermediate resistance is at 5617.62 and falling fast.  Finally, the Cycles Model suggests the SPX may rise to the mid-Cycle resistance at 5770..00.     This may portend a choppy week ahead for the SPX.

Today’s options chain shows Max Pain at 5250.00.  Long gamma may begin above 5300.00 whils short gamma lies beneath 5200.00.

ZeroHedge reports, “US equity futures are higher, part of a global risk-on rally, after President Trump paused import duties on a range of consumer electronics over the weekend (even as he clarified on several occasions the pause is only temporary). As of 8:00am, S&P 500 futures are up 1.5% while Nasdaq 100 contracts climb 1.9% with Mag7 names are all higher led by AAPL (+4.9%); Semis and Cyclicals outperforming, too; Goldman Sachs was 2.7% higher after its first-quarter earnings. The global risk on rally has meant a broadly positive European and Asian session as well. That said, volatility remains front and center among asset classes, with the VIX holding around 33 and similar gauges for bond and currency swings also staying elevated. The dollar fell for a fifth day as Trump warned that a specific levy for electronics will be announced later; DXY remains at the 100 level, aiding international indices in outperforming the S&P.  US bonds retraced some of last week’s losses, pushing 10-year yields down to 4.43% in a bull-steepening move. Commodities are mixed with Energy/Base Metals higher, precious lower, and Ags mixed. Trump is set to give more color on tariffs later today but markets like the delayed implementation at a time when positioning is cleaner. Macro data this week is focused on Retail Sales and Housing data, plus today’s NY Fed Inflation Expectations.”

VIX futures made a new low at 32.22 this morning as it drifts lower.  A possible target for this decline may be the Cycle Top support near 30.45.  While the VIX did not exceed the August 5, 2024 high, it remains more elevated after Monday’s episode.  As of Friday’s close, it hovered about 18 points above its mid-Cycle support at 18.96.  This suggests investors’ expectations may have changed favoring a willingness to hedge against future downdrafts.

The April 16 options chain shows Max Pain at 21.00.  Short gamma resides between 15.00 and 20.00.  Long gamma may begin at 22.00 and extend to 75.00.

TNX has turned down this morning, with futures reaching 44.20 thus far.  There are two possible retracement values to consider.  The first is the trendline and 50-day Moving Average at 43.46.  The more likely retracement may be the mid-Cycle support and 50% retracement value near 42.18.  This may have a temporary calming effect on equities.  While the PBOC is doing everything in its power to prop up the Chinese equities markets, the Fed refuses to consider doing the same for the US markets.

USD futures have bounced out of Friday’s low and have risen above the Cycle Bottom support/resistance at 99.47.  This may have triggered an aggressive buy signal.  While the sudden decline since April 2 may be attributed to the announced Trump tariffs, the reaction of our trading partners may produce a more realistic view of the effects of the tariffs on the US economy and an end in the 30-month downdraft in the US Dollar.  .

Bitcoin may have made its Master Cycle high on Sunday and is hovering above the 50-day Moving Average at 84455.00 where a sell signal may be made.  Further confirmation of the sell lies beneath the Intermediate support at 83531.15.  Should Bitcoin fall beneath these levels, a decline may ensue through the middle of June.

Gold futures have pulled back to 3209.00 this morning after making a potential Master Cycle high on Friday.  The top trendline of its 1 year trading channel lies at 3200.00.  A decline beneath it may offer an aggressive sell signal.  The Cycles Model suggests a decline to follow until the week of May 5.