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 dropped to 7413.50 before bouncing off the lower Ending Diagonal trendline.  It is hovering above the trendline as I write.  Today is monthly options expiration and the morning options are about to expire.  The further the SPX declines, the more options expire worthless, which may cause a selling feedback loop as remaining call holders scramble to unload.  This may be further exacerbated in the leveraged ETFs.   A further decline beneath 7400.00 issues a sell signal that should not be ignored.   The Cycles Model allows a possible 2-3 week decline.  Possible targets may be the 52-day Moving Average at 6906.99 or the mid-Cycle support at 6806.60.

This afternoon’s options chain shows Max Pain at 7465.00.  Long gamma begins at 7470.00 while short gamma prevails beneath 7460.00.  There is a put wall at 7400.00.  Should the SPX go beneath it, prices may go over a cliff.

ZeroHedge reports, “Bond yields, oil and the dollar are surging this morning as US futures tumble from all-time highs, with Tech underperforming driven by a series of factors including i) surging energy prices on lack of Iran war progress, ii) elevated positioning into options expiry; iii) Central bank repricing, iv) Tech sell-off driven by higher yields, and v) strikes at Samsung Electronics.”

The premarket VIX rose to 19.24 this morning and may close in on the 52-day Moving Average at 21.80 in short order.  Should the VIX reach the neckline by May 20, the Master Cycle may be adjusted from May 6 to May 20 to reflect that move, called a “double reversal”.

The May 19 options chain shows Max Pain at 22.00.  Short gamma resides between 16.00 and 20.00.  Long gamma begins with a call wall (over 250,000 contracts) at 25.00 and runs with call walls nearly every 5 points to 95.00, signifying institutional interest.

The US 10-year Bond Yield burst through its neckline at 44.84 to exceed the dreaded 45.00 level.  The Japanese 10-year rate is also rising, causing potential destabilization in the equities markets.

USD vaulted above the 52-day Moving Average, cementing the buy signal.  The Cycles Model suggests the rally may last to early June, causing grief to the dollar shorts.  A further rally from here may instigate a short squeeze that may propel the USD above the Head & Shoulders neckline, with knock-on effects.

Bitcoin tested the horizontal trendline yet again this morning, then fell away.  The Cycles Model calls for a short, but possibly deep decline to a lower support before resuming its rally.  It may be targeting the Cycle Top currently at 99837.00 by the end of June.

Crude oil may be nearing the end of its current Master Cycle.  While it may appear to be going higher, it is testing the Cycle Top resistance at 104.13 and may not succeed in closing above it today.  The Cycles Model suggests the current Master Cycle is ending with a new decline pending.  The target may be the lower Triangle trendline near 85.00 with a target date near the end of June.  As inventories run low, countries may pounce on the lower oil prices to rebuild reserves.  More purchases may be made as the price declines beneath $100.00.

Gold has begun another decline that may last to early June.  The next support level is the mid-Cycle at 4402.00.  It may decline beneath it, but final support may lie at 4100.00.

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

7:45 am

Good Morning!

SPX futures rose up to 7472.90, only ticks away from the estimated trendline resistance near 7475.00.  Retail dip-buyers are now driving 20% of the trading activity with increased leverage and options.  However, the melt-up has narrowed, increasing fragility.   While the market appears calm, retail investors are the most incapable of handling a spike in volatility.  Tuesday’s volatility spike offered a warning, but did not break beneath the lower Diagonal trendline.  The next break may propel the SPX as far as the Cycle Bottom at 6370.95.

Today’s options chain shows Max Pain at 7440.00.  Long gamma resides above 7470.00 while short gamma dominates beneath 7400.00.

ZeroHedge reports, “US futures are higher as we await color on the Trump-Xi summit and US- Iran negotiations, which are said to be ongoing, and as the tech meltup continues. What is known so far is that Trump / Xi agree that Iran cannot have a nuclear weapon, Hormuz should reopen without a toll or militarization; the countries will look to increase investment in each other as NVDA H20 chips are approved for a set of Chinese companies.”

The premarket VIX is consolidating beneath the mid-Cycle resistance at 18.51.  The VIX has been released from Wednesday’s expiration, allowing it to rise out of its compressed state.  A buy signal has been made above the mid-Cycle resistance and may be confirmed above the 52-day Moving Average at 21.88.

The May 19 options chain show Max pain at 21.00.  Short gamma resides beneath 20.00 while long gamma dominates above 23.00 and remains strong to 95.00 with heavy institutional participation.

The US 10-year Bond Yield gapped down after challenging the Head & Shoulders neckline at 44.84 yesterday.  It closed beneath the neckline yesterday, allowing yet another dive in yields that may reach the mid-Cycle support at 41.78 in the next 2-3 weeks.  This is an early warning that all is not well, since investors saw the 4.5% yield as an opportunity for a safe haven that portends a warning of the fragility in equities.

ZeroHedge reports, “Moments ago, the last refunding auction of the week, the sale of $25BN in 30Y paper, made history: it was the first 30Y auction to print with a high yield above 5%, and a coupon of 5%, since August 2007… which as veteran traders will recall was the month of the historic quant crash which marked the S&P highs at the time and eventually culminated in the global financial crisis. 

The auction priced at a high yield of 5.046%, up sharply from 4.876% in April, and tailed the 5.041% When Issued by 0.5bps, the second consecutive tail following 4 stop-throughs.”

The US dollar rose above mid-Cycle resistance at 98.56 and may offer a buy signal should it close above that support.  Dollar shorts may begin to feel the pain above the 52-day Moving Average at 98.98.

Bitcoin is making new lows as it has been repelled from the  trendline at 80600.00 and  mid-Cycle resistance at 80083.00.  The Cycles Model infers a rather short Master Cycle, possible a week or so.  The only available target is the 52-day Moving Average at 74586.30.

Crude oil has been repelled at the Cycle Top resistance at 103.55, but remains above Intermediate support at 98.71.  Should it decline further, it may proceed sharply to the lower trendline of the Triangle formation in the next week or so.

Gold has been repelled by the 52-day Moving Average at 4756.14 and is challenging Intermediate support at 4791.00 this morning.   A close beneath Intermediate support implies a further decline to the mid-Cycle support currently at 4395.90.  The Cycles Model allows 2-3 weeks of potential decline before resuming its uptrend.  The mechanics are simple.  Central banks are willing to part with their gold hoard to buy crude oil beneath $100.00.

The Ag Index came down dramatically, indicating a probable reversal from the neckline of the Head & Shoulders formation.  The Cycle Model suggests a possible three week correction down to the mid-Cycle support at 359.89.  There is a close correlation between the price of oil and the price of food.  What makes the situation worse is a megadrought plaguing farmers who are not only beset by higher fuel and fertilizer prices, but uncertainty of the water supply.

ZeroHedge observes, “Chicago wheat futures surged on Tuesday, hitting two-year highs after the USDA’s latest WASDE report signaled a much tighter U.S. supply outlook than traders had anticipated.

Production stress across America’s breadbasket is now converging with a megadrought and mounting fertilizer constraints, adding upward pressure on prices at a time when global food prices are rising.”

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

3:26 pm

The SPX top of the Master Cycle has been evasive.  However, trendlines were more accurately drawn and the upper Ending Diagonal trendline appears to offer resistance at 7475.00.  The final probe may be complete or nearly so.  Meanwhile investors and managers have continued buying the dip.

8:00 am

Good Morning!

SPX futures reached a new high at 7430.50 this morning before easing back.   A marginal new high is possible, as the normal Master Cycle has the capability to extend to the end of the week in overtime.  However, yesterday’s tremor, which fell short of a sell signal, may be a warning of larger moves ahead.  The most comfortable place to be may be on the sidelines.

Today’s options chain shows Max Pain at 7385.00.  Long gamma begins above 7400.00 while short gamma strengthens beneath 7330.00.

ZeroHedge reports, “US equity futures are up (alongside oil and yields, go figure), reversing yesterday’s modest losses, as optimism around the earnings potential of AI outweighs concerns over hot inflation readings bringing dip buyers back to drive tech stocks higher, with traders betting that the tech rally has further room to run while also hoping on good news from the Trump-Xi summit set to start today in Beijing.”

The premarket VIX probed lower, to 17.82 this  morning, testing a short term support at 17.80.  It may go lower, but a new low beneath 16.18 may not be probable.

Today is options expiration  for the VIX, so we turn our attention to the May 19 (monthly) expiration.  The options chain shows Max Pain at 22.00.  Short gamma resides beneath 21.00 while long gamma strengthens above 23.00.

ZeroHedge comments, “One macro strategist is now making, in far more measured institutional language, the same argument I made days ago: this is not a normal bull market.”

The US 10-Year Bond Yield may have challenged the neckline of the Head & Shoulders formation at 44.84 this morning, with implications that it may go higher.  Should it close above the neckline, the formation may be activated.  The current Master Cycle stretches to early June,  giving TNX enough time to make a significant attempt at the potential target.

ZeroHedge observes, “With 30Y yields trading on the wrong side of 5% today, all eyes were on today’s 10Y refunding auction to see if it would be ugly enough to push yields to 4.50% or higher. Here is what happened.”

This morning, ZeroHedge reports, “After yesterday’s hotter than expected CPI (driven in large part by Energy, but seeing some contagion into Services costs), this morning’s Producer Price print for April was expected to show a major surge in annual wholesale inflation.

With the eight straight monthly increase, PPI rose by a massive 1.4% MoM (vs +0.5% MoM exp) – the biggest MoM jump since March 2022, lifting PPI by a stunning 6.0% YoY (vs 4.8% YoY exp). That is the hottest PPI YoY since Dec 2022…”

The US dollar is challenging mid-Cycle resistance at 9856.  Should it close above it, a buy signal may be obtained.  This may escape the attention of the dollar bears until it rises above the 522-day Moving Average at 98.99.  There are a lot of vocal dollar bears who do not recognize how valuable the USD may be in these times.

Bitcoin is straddling its two support/resistance lines, remaining just beneath the trendline at 80600.00.  It is due for a decline over the next couple of weeks with a possible target near the 52-day Moving Average at 74433.00.  It could go lower, but lacks a potential target.

Crude oil rose to its cycle Top resistance at 103.11 , but did not cross it, leaving open the possibility of a pullback to the lower Triangle trendline to complete the formation.  Wave E’s are know to be rogues, so the price of crude may drop beneath the trendline in the next week or so.  Most investors are looking for higher prices, which may be a disappointment.

Gold has been consolidating between Intermediate support and the 52-day resistance for the past week.  It may be due for a decline to the mid-Cycle support at 4388.46 by the end of the month per the Cycles Model.

The Lord’s Prayer

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

11;45 AM

Good Morning!

SPX opened beneath tis 6-week trendline, giving a sell signal.  This decline may be rather fast, especially since its starts on a high intensity down day.  Support may be found at the 52-day Moving Average currently found at 6879.10.  This decline is labeled as Wave B, which can be unpredictable.  Investors have been chasing the market with calls, $2.6 trillion purchased last week alone.  This may not end well, since expired calls are worthless.  Can you imagine trillions of dollars going up in a puff of smoke?

ZeroHedge reports, “US equity futures and bonds were lower as oil climbed, with a key inflation report showing the impacts of higher energy and supply disruptions stemming from the war in Iran. Stocks are poised to fall from all-time highs after the core CPI rose more than expected in April. As of 9:15am S&P futures ewere down 0.2% and Nasdaq futures dropped 0.7% as a slide in chipmakers and big tech names dragged down the market in early US hours.”

VIX rose above its mid-Cycle resistance at 18.59, allowing a buy signal.  The May 6 Master Cycle low held.  The next resistance is the 52-day Moving Average at 21.93.  Beyond that lies the Head & Shoulders neckline at 35.30.  This rally may be complex, as the month of june may turn positive in the SPX.  Virtually no on has been buying protection, just when it’s needed.  Downside hedges are still inexpensive.

The US 10-yar Bond Yield is climbing aggressively.  The Cycles Model indicates a potential breakout.  If so, there may be a consolidation above the Neckline prior to impulsing toward its intended target.  Long bonds are getting squeezed.

BKX bounced off the 52-day Moving Average at 160.21, but may be resisted at the Intermediate level at 164.10.  Should resistance hold, the decline may continue beneath the 52-day.  Barring a massive save, the decline may continue another three weeks.

ZeroHedge comments, “Did you already read about how subprime auto is imploding behind the scenes of the market, while “investors” chase gamma squeezes higher in an ongoing distortion feedback loop that is making things look far better than they are under the surface?

Good. Now let me offer up a reminder of another sector of the market that’s also still imploding behind the surface.”

Crude oil is testing the Cycle Too at 102.57 today.  There may be only two more weeks in the current Master Cycle, so crude is at a crossroads.  The Triangle formation implies a quick decline to the lower trendline near 85.00, giving consumers a possible break in gasoline prices over Memorial Week.  An upside breakout may nullify the Triangle formation and speed crude higher.

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 remained beneath 7400.00 over the weekend, declining to a low at 7367.10.  Critical support lies at 7300.00-7320.00. The 6-week uptrend may be broken beneath that level, offering a possible sell signal.  SPX may have ended its Master Cycle on Friday at 7401.50, allowing a minimum 2-3 week reversal.

Today’s options chain shows Max Pain at 7360.00.  Long gamma rises above 7370.00 while short gamma prevails beneath 7350.00.

ZeroHedge reports, “US equity futures are off a touch as the US/Iran failed to consummate a deal, which is boosting Energy commodities and bond yields. Still, stocks have withstood the resulting increase in oil prices and higher bond yields as the market remains focused on the memory/semi stock bubble.?

The premarket VIX rose to 18.23 this morning, short of a buy signal above mid-Cycle resistance at 18.46.   The Cycles Model shows strength rising over the next two weeks.  Very possibly the neckline of teh Head & Shoulders formation may be attainable.

The 10-year US Bond Yield tested its Cyc Top resistance this morning at 44.05, but did not break through..  However, it may encounter a surge of trending strength today that may boost it above resistance and xlear the way to the necklne of the Yead & Shoulders formation..

Bitcoin attempted to overcome Wednesday’s high at 82814.00, but failed.  It is now sitting atop the trendline at 80600.00 and the mid0Cycle support at 80476.00.  A sell signal may be obtained should bitcoin decline beneath these levels.   Bitcoin is an indicator of investor sentiment, as there is no underlying asset.

Crude oil rose up to test the Cycle Top at 102.01 over the weekend, but failed to reach it.  The Cycles Model shows a possible Master Cycle low in about two weeks that may terminate the Triangle formation.  Crude may drop to the mid-Cycle suuport currently at 70.24 to complete the formation, just in time for Memorial Day weekend.

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 are consolidating between support and yesterday’s new high at 7385.02.  While the Cycle may be complete, there may be a brief foray to round number resistance at 7400.00 this morning.  Round numbers are attractors that pull in the last dollar before a reversal, should it fail to hold that level at the end of the day.  The April jobs report may show a slowdown from the March gains.  However, attention may be drawn away from jobs to the situation in the Middle East.  The Cycles Mode point out a possible short, but steep, correction with a recovery by June.

Today’s options chain shows Max Pain at 7310.00.  Long  gamma may strengthen above 7350.00 while short gamma lurks beneath 7300.00.

ZeroHedge reports, “US equity futures are higher and just shy of a new record, with technology names leading futures higher ahead of April jobs report, after Trump’s assertion that the Iran ceasefire is still holding despite an exchange of weapons between the US and Iran overnight, and a deep weekly loss for oil help futures regain positive momentum.”

NDX futures are somnolent, awaiting the payrolls report.  While the rally is complete, or nearly so, NDX may make a run to the upper trendline at 291155.00 before a reversal.  Keep posted today, as yesterday’s action may have given a warning.

The premarket VIX is consolidating near the low.  The Fractal construction may allow another new low prior to completion of the Cycle.  A rally above mid-Cycle resistance concludes the decline is over and a buy signal may be given.

The US 10-year Bond Yield may be consolidating beneath the Cycle Top resistance at 44.04.  The consolidation may not last, as internal strength is building for a potential breakout over the next few days.  The Cycles Model anticipates a probable rally to early June.  This may open the possibility of the TNX rising to 50.00 by September.

The US Dollar may be testing yesterday’s low with the possibility of a nominal new low today.  However, the Cycles Model shows new trending strength arriving next week that could challenge the neckline of the Head & Shoulders formation.  A rally above the mid-Cycle resistance at 98.56 may produce that result.

Bitcoin has declined beneath its mid-Cycle support at 80825.00 and its trendline at 80600.00 this morning, offering a potential sell signal.  Bitcoin offers a view of market sentiment and overall liquidity, since it has no underlying asset.  This may be a warning that all is not well.  A correction may be at hand.

Crude oil challenged Intermediate resistance at 97.62 this morning before pulling back.  Should it close above it, crude may be on track to move considerably higher.  Should it fail to do so, WTI may correct down to the trendline near 85.00.  In either event, crude may resume its uptrend shortly.

Gold found support at the Intermediate level at 4660.00 this morning.  The Cycles Model shows a probable steady rise for the next month.  The nearest resistance is the 52-day Moving Average at 4797.00, then the Cycle Top resistance at 5413.18.  New all-tiome highs are possible, if not by June, then possible later this summer.

The Agriculture Index has begun a corrective decline that may last to early June.  This may not be a time to sell, but a time to accumulate shares of agricultural products and shares.  Possible supports may lie at the 52-day Moving Average at 367.31 or lower at the mid-Cycle support at 359.08 (more likely).  The Spring season is critical.  many farmers are not  planting due to rising costs of fuel and fertilizer.  In addition, a megadrought may affect both the size and quality of the crops.  Here’s an interesting watch.

ZeroHedge warns, “January, February and March were insanely dry. In fact, in all of U.S. history conditions have never been so dry during the first three months of the year. Just think about that for a moment. Not even during the Dust Bowl days of the 1930s were conditions this dry.”

The Lord’s Prayer

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

2:54 pm

SPX rolled over and bounced on a short-term trendline at 7320.00.  An aggressive sell signal may be obtained beneath 7300.00 – 7320.00, as the month-long uptrend may be broken.  The Cycles Model calls for a 2-week decline that may go as far as the March 30 low.  Critical support lies at the 52-day Moving Average at 6850.00.

8:00 am

Good Morning!

SPX futures rose to 7384.90 this morning, overshooting the estimated target for the completion of the Master Cycle.  While all the elements for the Cycle have been completed, the Cycles are behavioral, not mathematical.  While mathematics provide an understanding of the Cycles, they provide guidelines, not rules.  For example, this morning’s behavior is termed a “throw-over” where trendlines and targets are exceeded.   The next push-back level may be round number resistance at 7400.00.  This is meant to pull in the last potential dollar from investors, draining all the  available cash.  The use of options rather than share ownership indicates exuberance that may not be warranted.  This is a dangerous level, since  sellers may soon find no more buyers.  Another fly in the ointment is that stock buybacks are lagging their commitments.

Today’s options chain shows Max Pain at 7350.00.  Long gamma resides above 7375 while short gamma is strongest beneath 7300.00.  Record-setting call options warn of “irrationality“.

ZeroHedge reports, “The global market meltup is rolling on. US stock futures inch higher, but are off session highs, with oil falling for a third straight day as traders waited for updates on a potential US-Iran peace deal that would reopen oil flows through the Strait of Hormuz.”

The premarket VIX rose to 17.60 this morning before settling back near yesterday’s close.  A buy signal may be had above the mid-Cycle support/resistance level at 18.44.  The Cycles Model suggests a possible 1-2 week rally to the neckline of the Head & Shoulders formation.

The May 13 options chain shows no short gamma, while long gamma begins above 17.00 and extends to 35.00.  Upward pressure is building.

The US 10-year Bond Yield dropped beneath Intermediate support at 43.37 to a morning low of 43.14 in the futures, suggesting a further drop in the cash market, as well.  The next support is the 52–day Moving Average at 42.69, should TNX go lower.  However, the Cycles warn that TNX may be about to regain its bullish footing, as trending strength may come back in panic form over the weekend.

The US dollar may be finishing its correction prior to an imminent reversal higher.   The Cycle bottom at 96.72 may provide a final floor for the current low.  However, the correction may be complete, or nearly so.  Look for a renewal of bullish strength nest week as the secular uptrend resumes.

Bitcoin is challenging the mid-Cycle support at 80946.00 this morning as it reverses out of its Master  Cycle high.  The Cycles Model suggests a short, but sharp, decline that may last about two weeks.  No particular target is given, but we should watch for support at 65000.00.

Crude oil is consolidating beneath the 52-day Moving Average at 92.63.  Once above it, a buy signal may be given.  There is no particular target at this time.  However, should crude oil go parabolic, it may reach 140.00 at a possible minimum.

ZeroHedge remarks, “A very optimistic but unconfirmed early Thursday report: Sentiment in early morning trade was lifted after Al Arabiya reported that “the coming hours will witness a breakthrough for the situation of the ships stuck in the strait”.”

Gold made new highs above its Intermediate support/resistance level.  It is on a buy signal with confirmation above the 62-day Moving Average at 4806.20.  The Cycle Model suggests the uptrend may continue to early June.  The Cycles Mode anticipates a steady rally through the rest of May with upside convexity growing..

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 rose to 7338.80 this morning on news of a nearing deal with Iran.  The Master Cycle is running on overtime, but several Fractal relationships are being met this morning.  The first is time.  The rally is running on a corrective time clock which may run out today.  The second is Fractal construction, which suggests a top range of 7343.00 to 7353.00.  This is not random.

Today’s options chain shows Max Pain at 7265.00.  Long gamma begins above 7270.00 while short gamma resides beneath 7225.00.

ZeroHedge reports, “US equity futures are up big this morning and making fresh all time highs, led by tech companies, while oil prices and bond yields fell sharply on optimism that the US and Iran are nearing a peace deal.”

The premarket VIX may have made a new Master Cycle low at 16.18 this morning.  The fractal structure may be complete.  Should that be the case, the VIX may rise to test the neckline of the Head & Shoulders formation at 35.30 in short order.  The low is a week early for the current Master Cycle, which may be altered to fit the new high if accomplished in the next two weeks.

Today is options expirations for the VIX.  It appears that the shorts won this one.  The May 13 options chain shows meager short gamma positions.  Long gamma may begin at 19.00 and expands to 30.00.

The US 10-year Bond Yield fell to o43.50 this morning as it re-enters its correction phase.  A probable target may be the mid-Cycle support at 41.74 before reasserting an uptrend.  The correction may last to early June.  The failed attempt at a breakout has analysts concerned about the fragility of equities.

ZeroHedge observes, “In our preview to this morning‘s Quarterly Refunding Statement, we said that we do not expect major changes and that, at most, the treasury might adjust its statement language to soften the forward guidance on possibly futures increase in coupon auction sizes…”

USD declined to 97.62 this morning, as the correction may be complete.  The Cycles Model anticipates a reversal, but no strength until mid-May.  It may take a few days to sort it out.

Bitcoin may be consolidating above its mid-Cycle support at 81087.00 this morning.  However, time may be running out in the current master Cycle.   What may follow is being billed as a short, but steep, decline.  We’ll be watching support at 65000.00.

Crude oil made a very deep correction to a morning low at 88.66, cutting through its supports.  However, the correction may not last.  This may be considered a “shakeout” as the uptrend may have been established by rising above 100.00.  Trending strength may regain a foothold once crude rises back above 100.00.

Gold rallied this morning above the Intermediate support/resistance level at 4653.21, creating a buy signal.  The next resistance is the 52-day Moving Average at 4815.79, where investors may start piling in.  We may see growing trending strength into early June when the rally takes a rest.

The Ag Index may have begun a month-long correction from its Master Cycle high.  The Cycles Model suggests a possible decline to the mid-Cycle support at 358.80.  Thereafter, the current price action favors a Head & Shoulders formation above the current high, which is illustrated.  The pullback favors buyers who anticipate food inflation may be very high.

BKX has reversed out of its Master Cycle low at 165.69 this morning. Trouble is brewing, but the sheer momentum of this rally may carry its beyond most expectations.   A rise above the Cycle Top may produce a potential Head & Shoulders formation with a target of 194.00.

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

7:45 am

Good Morning!

SPX futures consolidated inside yesterday’s trading range.  While the time element of the Master Cycle appears complete, SPX must still break the Cycle Top support at 7152.00 to produce an aggressive sell signal.  What lies ahead may be a shallow (Wave B) decline that may stop at the 52-dy Moving Average or the mid-Cycle support at 6765.00 over the next 2-3 weeks.  A confirmed sell signal may not be given.  Instead, the decline may be the last “buy the dip” opportunity of the year.  While most analysts view the market against its own past performance, the rest of the world may be looking at the US markets as a haven from the turmoil of war.

Today’s options chain shows Max Pain at 7200.00.  Long gamma rises above 7240.00 while short gamma resides beneath 7165.00.

ZeroHedge reports, “Stock futures are higher, completely reversing yesterday’s drop with dip-buyers out in force as a fragile ceasefire between the US and Iran held after a day of clashes and sentiment is helped by a pullback in oil prices, with Brent crude futures down 1.4% as well as the US move to return 22 Iranian crew from a seized vessel.”

The premarket VIX is consolidating beneath mid-Cycle support/resistance this morning.  The Cycles Model suggests about two weeks of rally that may meet the neckline of the Head & Shoulders formation at 35.30.

Tomorrow’s options chain shows a small contingent of puts between 15.00 and 17.00.  Calls dominate the chain starting at 19.00 and extending to 40.00.

The US 10-year Bond Yield has tested the neckline of the Head & Shoulders and was found wanting.  The breakout hasn’t happened yet, giving stocks a temporary reprieve.  While there may be another attempt at trendline resistance, TNX may be due for a deeper correction.  The mid-Cycle support currently at 41.74 may be a more likely target.

USD challenged the mid-Cycle resistance at 98.56 this morning.  There is a pending buy signal on USD.  Should USD rise above it, a buy signal may be available.  Additional resistance lies at 99.00.  The Cycles Model suggests thsi rally may last another month, giving USD the time to rise to, and above, the neckline of the head & Shoulders formation.  The model remains quiet this week, but shows increasing trending strength the following week.

Bitcoin is probing the mid-Cycle resistance at 81245.60, as mentioned yesterday.  This suggests that Bitcoin may have a more bullish long-term track.  However, it is also at the end of its current master Cycle, suggesting a pullback may soon be in play.

Crude oil may be in a correction lasting up to 2 weeks.  A possible retracement low may be found near the 52-day Moving Average currently at 91.60.  From that point, crude may be rising alongside the SPX into the Summer.

Gold made a deeper low on Sunday, extending the Master Cycle.  A reversal may be imminent, with a potential buy signal above Intermediate resistance at 4656.97.  The Cycles Model calls for a possible month-long rally.

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 7186.00, but did not cross beneath the Cycle Top support at 7147.20. Today is a trending strength day, suggesting SPX may go to the next resistance at 7300.00.  However, the Master Cycle is running on fumes.  Often at this stage of the Cycle a quick run-up may be sold into, causing a reversal.  SPX has had three consecutive weeks of new highs on negative breadth, with hedge funds selling and commercial traders neutral.  The IRA buying season is over while pension funds are uncomfortably long and may rebalance.  The Cycles Model suggests a possible shallow retracement  (Wave b) to the 52-day Moving Average at 6823.82 over the next 2-3 weeks.  The mid-Cycle support at 6760.51 may provide a further bounce platform.

Today’s options chain shows Max Pain at 7230.00.  Long gamma may emerge above 7250.00 while short gamma becomes strong beneath 7200.00.

ZeroHedge reports, “US futures whipsawed and crude oil spiked higher as tensions flared up again in the Middle East, taking the focus off a run of strong earnings by megacap tech companies.”

The premarket VIX has risen to 18.94, above the mid-Cycle resistance at 18.41, creating a potential buy signal.  The Cycles Model suggests that VIX may revive over the next 2-3 weeks  to retest the neckline at 35.30.  While Friday’s low was beneath the April 17 low, if may not qualify as a Master Cycle low.  What this may show is a change in orientation with future Master Cycles ending in strength.

The May 6 options chain shows a minor holdout of short gamma at 17.00.  Long gamma may begin above 19.00 and extends to 40.00.

The US 10-year Bond Yield has gone above the Cycle Top resistance at 43.93.  Should it remain there, it may proceed to challenge the neckline of the head & Shoulders formation at 44.84.  A decline may develop a bounce at Intermediate support at 43.25.  The Cycles Model shows growing strength this week that may lead to a breakout.

USD emerged from a minor retracement, remaining beneath mid-Cycle resistance at 98.56.  There may be another probe lower to complete the retracement before resuming its uptrend.  Otherwise, USD may consolidate until it emerges above the mid-Cycle resistance.

Bitcoin tested overhead resistance at 80600.00 possibly ending its Master Cycle today.  It may attempt to test the mid-Cycle resistance at 81395.77 as well, giving a double indicator of a possible reversal.  Following that, a brief pullback may test the lows.

Crude oil rose to 107.46 this morning, then tested the Cycle Top support at 99.77.  Should the Cycle Top hold, it may venture higher.  The Cycles Model suggests a possible new high before the end of the month.

Gold is consolidating between the April 29 (Master Cycle) low and Intermediate resistance at 4670.95.  The Cycles Model suggests a possible volatility spike may reveal itself today which has the ability to extend the low.