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

12:15 pm

After a long hiatus, the Ag Index has finally come alive.  I have stated that this is a sector to accumulate for the past six months, as agricultural prices fluctuated in a narrow range.  Our food at the grocery store is affected by multiple inputs.  Fuel is one of them.  Fuel is needed for growing and transportation of the finished products.  Food accounts for 12% of the average American family’s budget.  It could double in the next year.  A knock-on effect is the impact of food prices on inflation also raises the cost of financing (bonds).

11:55 am

BKX may be losing upward momentum with the neckline of the Head 7 Shoulders at 148.00.  There are four more weeks of decline being proposed by the Cycles Model.  If so, BKX may easily decline beneath the neckline very soon.  Major bank announcements are often made during the weekend to mute market reaction, especially for bad news.  The Cycles Model suggests volatility may increase by the weekend, as the first domino in private credit may have fallen.

ZeroHedge  reports, “The barrage of negative private credit news, now that the $1.8 trillion bubble has burst, is coming hot and heavy.”

8:00 am

Good Morning!

SPX futures may have begun their next decline phase after a reversal beneath the 52-day Moving Average at 6898.00.  The Cycles Model suggests another week of potential decline with increasing intensity/volatility.  The next support level may be the Head & Shoulders neckline at 6710.00.  The Cycles Model infers a possible panic down day tomorrow, followed by a mush more intense panic next week.  Investors have sold put protection in large amounts during the recent bounce, leaving them vulnerable to another downturn.   The oil crisis still has legs and may define risk over the next week or so.

Today’s options chain shows Max pain at 6820.  Long gamma may begin above 6850.00 while short gamma prevails beneath 6790.00.  One-day options have greatly reduced due to the bounce.  However, longer-term options are still strongly short.

ZeroHedge reports, “US equity futures remain extremely illiquid, jittery and volatile, and are down 10bps near the morning lows, erasing a 0.5% gain after earlier rebounding on hopes the upcoming SPR release will keep oil lower (it has so far failed to do that).”

The premarket VIX rose to 26.23 this morning as it approaches the Head and Shoulders Neckline at 28.15 after finding support at the Cycle Top at 22.71.  The next opportunity for a possible panic move may occur at the monthly options expirations, March 18-20.

The March 18 (monthly) options chain shows Max Pain at 21.50.   Massive short gamma positions have been taken between 16.00 and 21.00.  Long gamma begins at 22.00, with institutional presence at every 5 points up to 100.00.

The US 20-year Bond Yield leaped to 41.94 this morning, testing the 200-day Moving Average at 41.98.  The Cycles Model infers that trending strength may intensify into the weekend, with a possible panic surge by mid-week.  The prevailing belief that the war in the Middle East will be short-lived has had a limited effect on yields.  However, an acceleration in the oil crisis may have a much more dramatic consequence for the TNX.

12:00 pm

TNX has broken out above the 200-day Moving Average.  See US 20-year Bond Yield.

ZeroHedge reports, “Not that anyone will care much in light of the Iran-related news barrage hitting every second, but moments ago the US sold $58BN in 3Y paper in what was a rather ugly auction.”

Crude oil is in a consolidation phase today, as threats are exchanged over the Middle East.  Trending strength may return by the weekend with another potential burst of energy by mid-week.  The next week may prove to be very active for crude.  Secretary of Defense, Pete Hegseth claims the war intensity may increase today.

Bitcoin made a retracement of its decline from its March 4 high at 74083.89 yesterday.  The lower high suggests a further decline ahead.  A sell signal awaits beneath Intermediate support at 68135.00.  The Cycles Model warns that the decline may possibly linger to the end of April.  A possible downside target may be as low as 37000.00.

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

7:30 am

Good Morning!  An abbreviated comment.  I’ll be back mid-morning.

SPX futures consolidated after making a nearly 10% round trip, including the futures.  Options are playing a big part of the price action, if not total control.  Note from yesterday’s report that options Max Pain (least payout by dealers) was at 6800.  This could only be done on low volume, as retail flows, although positive, could not make up the power to rebound that strongly and hedge funds are net bearish.  The decline identifies as a Leading Diagonal, which may have yet another decline to complete it.  The Head & Shoulders formation is still active.  Commerciale traders are set to sell in large amounts.  Short gamma, beneath 6750.00, is being favored.  Recall that the 52-day Moving Average is at 6899.00.  Short term support is at 6770.00, then again at 6750.00.

Today’s options chain shows Max Pain at 6755.00.  Long gamma becomes strong above 6800.00 while short gamma can be found beneath 6750.00.

ZeroHedge reports, “S&P futures are unchanged this morning, but approaching session low, following Trump comments that appeared to be the first signs of an off-ramp which however were followed by renewed fighting in the Middle East.”

The premarket VIX revisited the Cycle Top support at 22.95 by declining to 22.93 this morning.  The fear levels have moderated, but the Cycles Model suggests more rally to come.  Intensity may take some time to rise, but next week looks promising.

Tomorrow’s options chain shows Max Pain rising to 23.00 after yesterday’s debacle.  Short gamma is strongest between 19.00 and 20.00.  Long gamma is strongest between 24.00 and 34.00.  The outer reaches of long gamma have pulled back.

TNX is testing the possible lower limits of it retracement this morning.  A rally to challenge the 200-day Moving Average at 42.00 may be developing, with a possible probe to the trendline near 42.50.  Increasing strength may accompany this probe with a potential breakout looming in the next week.

USD paid a visit to the 200-day Moving Average at 98.34 this morning, declining to 98.49.  After a nod to this support, it may be ready to probe higher with the Cycle Top at 100.08 in sight.  A breakout above that level may first offer a correction to the 52-day Moving Average at 98.01, then a probe to much higher levels as dollar shorts must painfully exit.

Bitcoin may have taken a turn for the worse. after reversing at 71301.00 this morning.  A decline beneath Intermediate support at 67916.00 may offer a sell signal.  Further support lies at 61725.00, the 43-week mid-Cycle support.   A decline beneath it may cause Bitcoin to continue its decline to 30.00.  The Cycles Model suggests the decline may continue to the end of April.

Silver rose to 90.37 this morning, remaining beneath the Cycle top at 96.32.  It continues to be in a corrective mode.  The decline may come back with a vengeance toward the end of the week, possibly declining to the mid-Cycle support at 56.24.

Crude oil dropped to a morning low at 83.47, erasing approximately two-thirds of this weekend’s parabolic spike.  While crude may fall as far as the Cycle Top support at 73.66, it may begin another parabolic rise.  Should crude rise above the current high, the weekly charts show a possible Head & Shoulders formation with a minimum target of 184.00.  This would bring chaos to the worldwide economy.

The Lord’s Prayer

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

7:30 am

Good Morning!

SPX futures plunged to 6580.30 over the weekend session as momentum has clearly overtaken price.  The morning session brought a bounce to 6696.00 as futures tested the neckline near 6705.00 from beneath.  The Cycles Model suggests the Head & Shoulders target may be reached in the next few days.  The corollary is, will there be more downside following this low?  Head & Shoulders formations often occur in the midst of a Cycle and not at the end.  While the Head & Shoulders may easily be fulfilled this week, the Cycles Model projects the end of the Master Cycle in the following week.  So, while the Head & Shoulders projects a low near 6400.00, there is a very strong support in the 1987 trendline near 6200.00, with the Cycle Bottom support near 6100.00 as a follow-up decline.

Today’s options chain shows Max Pain at 6800.00.  Long gamma is strong above 6850.00 while short gamma goes into full swing beneath 6700.00.  SPX is in deep short gamma.  There are put walls at 6650.00, 6600.00 and 6500.00.

ZeroHedge reports, “US futures tumbled and oil surged as the war in Iran showed little sign of deescalating over the weekend and led to more major Middle East producers curbing output. Still, futures retraced more than 50% off the overnight lows as WTI nearly touched $120 overnight, the highest since 2022, before dropping back to around $100 after a report G7 countries may release 300 million to 400 million barrels, or around 25% to 30% of the 1.2 billion barrels in strategic reserve.”

DJIA futures plunged to 46308.00 this morning, confirming its Head & Shoulders formation.  It is on a similar trajectory as the SPX, with a possible Cycle terminus near the Cycle Bottom support at 42601.00.

NDX futures crashed to 23976.00 in the overnight session.  It has bounced back to the neckline near 24300.00.  While this has a “heavy” feel, the chances of a limit down day are minimal.

The premarket VIX reached an overnight high at 35.30, but may scale the probe back to 30.00, or possibly to the neckline of its own Head & Shoulders formation.  The VIX has a longer Cycle timeline than the SPX.  The prospect of war in the Middle East may keep worries and tensions high while bringing a short-term recovery to equities as war production gears up.

The March 11 options chain shows Max Pain at 21.00.  Short gamma is strongest between 17.00 and 19.00.  Long gamma begins at 24.00 and remains strong to 40.00.

TNX futures vaulted above its 200-day Moving Average at 42.02, reaching a weekend high at 42.15 before pulling back beneath the 200-day resistance at the open.  The Cycles Model had anticipated a surge in trending strength over the weekend with another market- moving event the following weekend.  Military events appear to happen on the weekends in order to keep them from influencing the markets while open.

Crude oil futures shot up to 119.43 over the weekend before pulling back near 100.00 this morning.  It may have made its Master Cycle high over the weekend,  as the Cycle Model indicated.  Measures to alleviate the surge in oil prices are already on the table in hopes of bringing the price of oil back down.

ZeroHedge observes, “Asian and European equities traded lower, while U.S. equity futures fell 1% as Brent and WTI futures traded in triple-digit territory following the weekend escalation in Middle East tensions. The energy shock we have been warning about for the past week, citing top institutional desks from JPMorgan, UBS, Goldman, and others, is now staring G-7 leaders directly in the face as energy market panic erupts.”

The USD rose to 99.62 this morning, threatening to break out above last week’s high and testing the Cycle Top at 100.08.  While the Cycle Top may provide temporary resistance, activity in the USD is picking up this week, suggesting a breakout above the November high may be imminent.

The Lord’s Prayer

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

7:45 am

Good Morning!

SPX futures are in decline, having plunged to 6778.10 thus far.  The sell-off may intensify through the weekend before the next bounce.  The decline may last up to 2 more weeks before any relief may be seen.  (More commentary later.)

9:30 am  

A decrease in payrolls and increased hardship have brought another risk to the fore.  The steady inflow of pension and 4001(k) contributions may be dwindling.  ZeroHedge comments, “My readers know that for the last couple of years I’ve repeatedly warned about the “passive bid” in markets. By that I mean the constant, automatic buying of stocks driven by retirement plans, ETFs, and other systematic investment programs.”

Today’s options chain shows Max Pain at 6845.00.  Long gamma begins above 6875.00 while short gamma becomes strong beneath 6825.00.

ZeroHedge reports, “Seven days into the war on Iran and markets are getting increasingly shaky. US equity futures tumbled ahead of the February jobs report, and are on pace to close the worst week for global markets since 2020 deep in the red as the selloff in global bonds deepened after another jump in oil prices fanned fears that the war in the Middle East is fueling inflation. ”

Further news from ZeroHedge, “In our nonfarm payrolls preview, we quoted JPMorgan’s Market Intel desk which said that “for this print, the stronger the better”, which by implication means that a poor number would be bad. By that logic, the actual number couldn’t be any worse, because moments ago the BLS reported that in February, the US lost 92,000 jobs, a huge drop from the downward revised (of course) 126K in January, and the second worst print since 2020 (only October’s shock -140K was worse). The number of private payrolls dropped by 86K, also a huge miss to estimates of a 60K increase.”

The premarket VIX  rose to 28.25 this morning.  The neckline of the Head & Shoulders formation goes into play above 28.15.  Should it open above it, consider this a confirmed buy signal for the VIX.  Although investors have been relatively calm about the prospects of a war disrupting the global economy, they remain cautious thus far.  However, stress is increasing.

The March 11 options chain shows Max Pain at 20.00 in a brutal contest.  Short gamma is increasing beneath 19.00 while long gamma remains clustered beneath 25.00.

The DJIA has declined beneath its neckline, activating the Head & Shoulders formation.

USD is consolidating near its high this morning.  The Cycles Model suggests the USD is due for multiple bursts of strength over the next week that may elevate it to the Cycle Top at 100.08.  An overshoot may cause pain among the USD shorts.

The Japanese Yen dipped to 63.25 this morning, extending an already long Master Cycle.  A reversal may be imminent.  The Yen carry trade may be on shaky ground.

Bitcoin may be challenging support at the Intermediate level at 68890.00.  A rise back above it may allow the rally to continue.  Caution is advised should it remain beneath it.

Crude oil surged higher to 89.61 this morning.  WTI has clearly reached its minimum target.  But there is a warning not to hang on to the parabola, as it may reverse without warning.  The weekly Cycle Top is at 85.00.  Should it decline beneath it, the decline may bring tears to those who ran to WTI the past week.

TNX has risen to 47.87 (47.89 in the futures) to challenge the mid-Cycle resistance at 41.82.  The last resistance of the series lies at 42.04…the 200-day Moving Average.  It may consolidate above the 52-day Moving Average at 41.55 for the time being.  However, the Cycles Model suggests a surge in yields may happen this weekend, leaving the final bastion of neutrality at the trendline near 42.50.

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

11:21 am

BKX continues its decline beneath the trendline near 160.00.  Mid-Cycle support at 152.92 may provide a bounce, but the most significant target may be the Cycle Bottom at 130.57.  BKX has another potential month of decline per the cycles Model.  Wile the decline may progress further downward, potential for a panic may not come until the middle of March.  All eyes are on the Middle East while the financial sector continues to deteriorate.

9:20 am

Good Morning!

SPX futures made an overnight attempt at the 52-day Moving Average at 6899.00, but fell short at 6894.00.  It has since begun its decline back to the revised Head & Shoulders neckline at 6710.00, as reported yesterday afternoon.  This is a high confidence formation, as the DJIA and NDX are showing similar formations.  Many traders and analysts consider the bearish camp “overdone” as the sideways motion thus far has been discouraging the bulls and the bears.  However, the SPX remains on a technical sell signal that may be confirmed beneath 6800.00.

Today’s options chain shows Max Pain at 6875.00  Long gamma resides above 6900.00 while short gamma dwells beneath 6840.00.

ZeroHedge reports, “US futures are mixed, first dropping overnight to session lows after Iran vowed to escalate its retaliation against US strikes and avenge the US sinking of an Iranian warship as the conflict entered its sixth day, before spiking to session highs after Bloomberg reported that Iran had previously signaled a willingness to eliminate its uranium stockpiles in return for “something good” during talks with the US before the strikes began…”

The premarket VIX has bounced back above the Cycle Top at 21.15, but remains range-bound this morning.  The Cycles Model calls for an increase in Volatility with a potential panic rally early next week.  This seems to be opposite the common advice that VIX may be crushed again.  Note the appearance of a Head & Shoulders formation.

The March 11 options chain shows Max Pain at 19.0.  Diminishing short gamma positions lie beneath 18.00 while the heaviest long gamma positions range from 20.00 to 30.00.

Investing.com observes, “Stocks finished higher on Wednesday. On the surface, this looked like a typical “vol down, stocks up” type of move. The VIX 1-day closed on Tuesday above 20 and traded down to around 12, while the VIX Index traded to roughly 20.50. Meanwhile, the VIX 1-day finished on Wednesday at around 17, so it is possible to see another opening move that helps push the market higher.”

The US 10-year bond yield has risen to 41.49 this morning, testing the 52-Day Moving Average at 41.54. Bond volatility has just awakened, although commentators expect yields to go down beneath 4%.  On the other hand, the Cycles Model calls for a day of strength.  Whether it propels TNX above resistance is yet to be seen.   However, there may be another blast of strength over the weekend, giving enough ammunition to possibly rise above the 200-day Moving Average at 42.05.  The new Master Cycle may be long and powerful, lasting to the end of May.  No one seems to be expecting this.

USD has found support at the trendline and may get a shot of strength to rise to its Cycle Top at 100.07.  The current master Cycle may have up to two more weeks to go.  A breakout above 100.00 may cause pain among the dollar shorts, adding fuel to the rally.

Investing.com observes, “The safe-haven appeal of the U.S. dollar has been burnished by a spike in oil prices caused by the escalating conflict in Iran, rather than a loss of faith in the American government, according to analysts at BofA Securities.”

Bitcoin is consolidating today after yesterday’s surge to 74083.00.  It may have corrected enough to mount another probe toward the 52-day Moving Average at 76643.00 before anther pullback.  Bitcoin may be on a long Master Cycle that may last to the end of April, with potential targets at the mid-Cycle resistance at 94849.00 or round number resistance at 100000.00.  Most comments on Bitcoin are still bearish

Investing.com comments, “Bitcoin (BitfinexUSD) steadied around $72,000 on Thursday, trading above that level for the first time in roughly a month after a broad rally lifted cryptocurrency markets and related equities a day earlier.”

Silver continues its decline today, with a low at 80.66.  The Cycles Model calls for  an increase in velocity of the decline , especially over the weekend.  A  likely bounce may be at mid-Cycle support at 55.46.  However, the Cycles Model suggests the decline may continue to early April, with a possible target as low as 35.00.

Crude oil made a new high today at 79.04 as it adds definition to its Master Cycle high in a high risk geopolitical environment.  While the fractal now appears complete, it may have some fine tuning over the weekend.  In addition, there may be a new potential Head & Shoulders formation being developed, but not yet complete.  The  existing one may still be playing out in the next few days.  There is a lot of resistance at 80.00.

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

2:47 pm

A simple visualization of the SPX indicates that the Head & Shoulders needed re-calibration.  It so happens that the DJIA and NDX also have Head & Shoulders formations in similar locations.  So there is now an agreement across the board, which makes this report easier to relay.  Prepare for a possible decline with increasing strength over the next week.

8:00 am

Good Morning!

SPX futures are consolidating near the upper half of yesterday’s trading range with the possibility of another probe higher.  This is an epic battle to regain control as the SPX slips beneath its support at the neckline of the Head & Shoulders formation.  Poor liquidity is being exacerbated by increasingly bearish price movement.  Individual investors are stepping away from the fray while hedge funds are increasingly bearish.  Buybacks are slowing down, leaving no backstop against a further decline.

Today’s options chain shows Max Pain at 6825.00 with long gamma above 6850.00 and short gamma beneath 6800.00.

ZeroHedge reports, “It was shaping up as a catastrophic, margin-call driven Wednesday session after Japan’s Nikkei tumbled about 4% and Korea’s Kospi suffered its biggest drop ever, plunging by a record 12%. But after initially plunging overnight, S&P futures rose as much as 0.4% after the New York Times reported that operatives from Iran’s Ministry of Intelligence used backchannels to contact the Central Intelligence Agency a day after US-Israeli attacks began.”

The premarket VIX pulled back to a low of 22.18 this morning as tension eased in the Middle East.  With corporate credit risk and Treasury yields rising, the path for the VIX may be higher for some time.  The Cycles Model suggests volatility continuing to rise into the weekend.  A possible target overthe next month may be the April 7 high at 60.00.

The March 11 options chain shows Max Pain at 19.00 with dwindling short gamma beneath it.  Long gamma seriously begins at 20.00 with calls owners grouped between 20.00 and 25.00.  There are outlying groups of calls up to 55.00.

TNX is consolidating within yesterday’s massive move.  Although appearing calm, it may be ready to explode even higher today.  The 52-day Moving Average at 41.53 may be a temporary stopper.  Should it go higher, the 200-day resistance at 42.07 may prevail.

USD is consolidating near its Diagonal trendline after a massive two day rally breaking through all resistance.  The Cycles Model suggests the rally isn’t over yet.  The next resistance is the Cycle Top at 100.07, near the November high at 100.39.  Wall Street is quiet about this move thus far.  However, breaking above 100.00 may bring massive USD short covering.  The possibility of a panic rally next week may grab a headline or two.

The Japanese Yen careened into its Master Cycle low yesterday, putting the Yen carry trade participants at ease.  However, The Cycle has reversed overnight and with it the carry trade may be about to become less profitable.  The “carry” involves borrowing funds from the Bank of Japan at its key rate currently at .75%, recently raised from .50% in December.  The rate hike brought a delayed reaction in the Yen.  What may not be recognized is that these hikes are about to bring a greater surge in the Yen.  A breakout above the january high may bring an unwind of the carry trade.

Bitcoin has broken above its month-long consolidation, rising above Intermediate support/resistance at 69547.77.  This action has given a buy signal.  There may be a consolidation or a pullback for a few days.  However, Bitcoin has a date to meet the 52-day Moving Average in another week.  A longer pullback may follow.  The current Master Cycle may last to the end of April, with a possible target near the mid-Cycle resistance at 95047.00.

Silver has fallen beneath its 52-day Moving Average at 83.47, confirming a sell signal.  The correction may continue toward the mid-cycle support at 56.21, with a possible add-on decline toward 300.00.

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

11:05 am

BKX has declined beneath its Diagonal trendline and may be setting up for a bounce.  A possible target for this bounce may be the 50-day Moving Average at 167.37.  Dip buyers may be ignoring the broken trendline because BKX still appears to be in an uptrend.

10:20 am

SPX has vanquished the Head & Shoulders neckline at 6770.00 but may be ready to bounce on a possible support at 6720.00, making a back-test of the neckline.  Dip-buyers may have disappeared as they are being taken behind the woodshed.  Instead, shorts may be taking short-term profits, creating the bounce.  This decline may be only the first installment, with more to come.

8:00 am

Good Morning!

SPX futures took a nosedive to 6737.80 in the overnight session before bouncing back above the neckline at 6770.00.   This is the second day that the SPX futures have fractured the Head & Shoulders neckline.  But will the attempts to open above it succeed?  As investors buy more downside protection the struggle to maintain equilibrium intensifies.  In addition, the 10-year Treasury yields have climbed  well above their Cycle Bottom adding volatility to both bonds and stocks.  The overnight futures are thinly traded, making them susceptible to manipulation.  Can calm be maintained after the open?  The Cycles Model suggests the decline may resume beneath the Head & Shoulders neckline with potential widening swings developing later in the week.

Today’s options chain shows Max Pain at 6875.00.  Long gamma begins above 6900.00 while short gamma strengthens beneath 6850.00.

ZeroHedge reports, “US equity futures are down sharply, along with all global markets, as the Iran war expands and escalates (attack on US embassy in Saudi Arabia; uncertainty over duration of Strait of Hormuz closure; targeting non-military infra / businesses) rattling markets and sending oil and the dollar surging.”

The premarket VIX rose to 27.30 this morning  before settling back near 35.00.  Many traders view 25.00 as the “breakpoint” between a bull market and bear market.  While investors have purchased the largest amount of put protection in recent history, we may see even more hedging above this point.  The Cycles Model suggests increasing strength in the rally by the weekend.   Buybacks begin to taper off this week, offering less resistance to the VIX rally.

The March 11 options chain shows Max pain at 19.00.   Short gamma continues to dwindle while long gamma begins at 20.00.  Conviction in long gamma tapers off above 30.00.  Much of the new activity is centered around the March 18 expiration.

The US 10-year Treasury bond yield surged again this morning, reviving bond volatility.  The rally may intensify into an outright panic as the new trend strengthens.  TNX has the potential to rise above its cluster of resistance between 41.57 and 42.00 by this weekend.  Bond longs may be squeezed in that scenario.

The USD index rose to 99.38 this morning, breaking above the Ending Diagonal trendline near 99.00.  USD may rise to the Cycle Top at 100.07 before it pulls back to mid-Cycle support at 98.31.  The trend is higher and may intensify over the next couple of weeks.  Dollar shorts are at risk.

The Japanese Yen has extended its correction to match the February 6 low.  While appearing to be bearish, this action may have prepared the way for a strong resurgence.  There is an ongoing debate on the board of the Bank of japan whether to raise rated again from .75% to 1.00% in April.  The Cycles Model indicates that the trend in the Yen may have already changed…to the higher.  The new Master Cycle may bring a rally  to mid-April.  The Yen carry trade may be in the bullseye of the coming storm.

Bitcoin is consolidating between the Cycle Bottom and the Intermediate resistance at 69870.00.  While on an aggressive buy signal, a move above the 52-day at 77334.00 may upgrade the signal to a confirmed buy.  Bitcoin may  have established an uptrend that could extend to the end of April.

Gold was slammed down to 5006.00 this morning, creating a sell signal beneath the trendline and Cycle Top at 5194.42.  The Cycles Model suggests that volatility may rise even more over the next several weeks with the mid-cycle support at 4200.00 as a potential target.

Zerohedge remarks, “Gold is printing a sizable down candle following yesterday’s shooting star formation. We may be looking at a second lower high developing, raising the risk of a potential double top.”

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

10:16 am

BKX bounced from its lower trendline at 156.00and may retrace its decline back to the 52-day Moving Average at 167.73, a 50% retracement.  The consolidation may take up to 2 weeks.  However, when the retracement is over, the Cycles Model suggests the decline may be strengthened.  “First, the stairway.  Then the elevator.”

7:45 am

Good Morning!

SPX futures declined to 6760.00, beneath the Head & Shoulders neckline near 6770.00 on the news of the military campaign against Iran.  The futures bounced to 6822.00, but have subsided near 6800.00.  The break of neckline support may allow the decline to continue to the proposed target near 6200.00.  However, prior to that, the bounce may resolve higher, possibly to retest the 52-day Moving Average at 6897.00.   The predominant emotion seems to be concern and not fear.  The Cycles Model suggests that panic may set in toward the end of the week and extend to mid-month.

Today’s options chain shows Max Pain at 6890.00.  Long gamma begins at 6900.00 while short gamma lies beneath 6800.00.

ZeroHedge reports, “US equity futures and global stocks tumbled, the dollar and gold rallied and oil soared as military strikes intensified across the Middle East, sending oil to its biggest surge in four years and stoking concern that faster inflation could weigh on the global economy.”

Premarket VIX rose to 25.24 over the weekend, breaking above its February 5 high at 23.10.  Panic rules the VIX this morning and may be reinforced as the week progresses.  The Longer view suggests the VIX may rise to the April 7 high near 60.00.  The new Master Cycle may last to mid-April.

The March 3 options chain shows short gamma between 14.50 and 18.00 dwindling.  Long gamma ovetakes short gamma at 19.00 and shows increased activity to 50.00.

ZeroHedge remarks, “Over the past 48 hours, geopolitical tension between the United States, Israel and Iran has escalated into direct military action. Air and missile strikes have been reported. Retaliatory measures have followed. Political leaders are issuing statements, and international observers are attempting to assess the scale and trajectory of events.”

The US 10-year Bond yield rose to 40.19 this morning, leaving a Master Cycle low on Friday.  The new Master Cycle may show growing strength over the next few weeks.  A buy signal on yields may be found above the trendline at 40.30.  The Cycles Model infers a possible 3-month rally out of this low, as it may be the retracement of a 3-year correction.  The peak in October 2023 was 49.97.

USD futures rose above their 52-day Moving Average at 97.92 and surpassed the mid-Cycle and 200-day resistance at98.31 this morning.  The Ending Diagonal trendline awaits the USD at 98.75.  It is on a buy signal that may take the USD higher for the next two weeks.  Trending strength may become more active during that time, challenging the Cycle Top at 100.06.

Bitcoin dipped to 63030.00 on Saturday as news of the military action in Iran came out.  However, it recovered and remains above the Cycle Bottom at 63198.00 as I write.  This indicates that the trend is higher in bitcoin.  The Cycles Model suggests a possible 2-month rally.  The next resistance to the rally may be the 52-day Moving Average at 77730.00 with a further possibility at the mid-Cycle resistance at 95446.00.

The rally in gold surged to 5433.75 over the weekend but pulled back near 5300.00.  The Cycles Model suggests that this probe may be a mere correction with more possible downside to come.  A decline beneath the trendline near 5250.00 or the Cycle Top at 5170.95 may confirm that viewpoint.

Silver declined from its cycle Top resistance at 93.94 on Friday to a morning low at 88.70.  A decline beneath Intermediate support at 88.53 may offer an aggressive sell signal with a further drop beneath the 52-day Moving Average at 82.59 may confirm the sell.  The Cycles Model maintains that silver may still have some corrective action to do.

Crude oil (WTI) rose to 74.99 over the weekend, in reaction to the military operations in Iran and the bombing of oil refinery facilities in the Middle East.   This morning it is trading near 71.00.  Crude oil has been due for a reversal and may have made its Master Cycle Top over the weekend.  Should that be the case, crude may decline through mid-April in the new Master Cycle.

ZeroHedge observes, “A drone strike forced Saudi Aramco to suspend operations at its Ras Tanura complex while damage assessments are underway on Monday, reviving a 2024 warning we issued that any successful Iranian or Iran-backed militia strike on critical Saudi refining infrastructure could trigger a global oil shock and, in a more severe scenario, set the stage for a broader financial crisis (reminder credit markets are already cracking).”

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

9:00 am

Good Morning!  I am doing an abbreviated session this morning.

SPX futures have declined to 6841.00 thus far.  The next support may be at 6800.00 for a bounce.  However, the ideal would be to reach the neckline at 6770.00 before bouncing.  The Cycles Model shows a possible Master Cycle low by mid-March.  The Head & Shoulders formation may dictate a possible target once the neckline is broken.

ZeroHedge reports, “The rollercoaster continues: US equity futures are in the red again, trading near session lows, and set to extend Thursday’s losses with as stocks underperform after yesterday’s spectacular plunge in the momentum trade as NVDA’s post record-breaking earnings/guidance plunge spooked markets that nothing is resolved about where AI goes next.”

VIX rose to 21.74 this morning, challenging the Cycle Top resistance at 21.61, then pulled back to the trendline at 20.50.  A breakthrough may solidify its gains and allow a higher rally.  The Cycles Model allows increased volatility until early April, while it shows a declining SPX to mid-March.

TNX continues its decline toward the terminus of Wave (E) and the Master Cycle low.  The Cycles Model shows that TNX may be entering its reversal window in the next week.  A possible target may be the Cycle Bottom at 39.32.

11:19 am

BKX is testing its Diagonal trendline at 157.00.  The Cycles Model allows another 6 weeks of potential decline.  Supports may be found near the Cyclle Bottom at 128.97, then at the April 7 low at 99.66.

The Lord’s Prayer

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

10:48 am

SPX has declined beneath the 52-day Moving Average at 6898.00 and is retesting it at this time.  This is a sell signal.  Traders are wondering why NVDA is down.  The market is down on bad news and good news.

8:00 am

Good Morning!

SPX futures consolidated between 6958.00 – 6930.00 in the overnight market, remaining above Intermediate support at 6914.00.  The trendline is near 6950.00.  The dealers may attempt to overcome the trendline and may do so temporarily today.    Fractal analysis suggests the SPX may have the capacity to rise briefly before a reversal.  To many, it may seem as if the SPX is making an ATH, but it is the result of a rogue Wave (B) that may already be complete.   Wave (B)’s are counter-trend moves that are fast and have the appearance of longevity. but are not long term.  The Cycles Model suggests that may be about 3 weeks of decline following the reversal.

Today’s options chain shows Max pain at 6925.00.  Long Gamma may begin at 6950.00 while short gamma may start at 6900.00.

ZeroHedge reports, “US equity futures managed to erase overnight losses and were trading flat after Nvidia and Salesforce failed to assuage fears about an overheated AI economy while traders awaited color from today’s round of US / Iran talks.”

The premarket VIX has declined to 17.54 this morning, making a new master Cycle low.  Should the SPX rise above 6950.00 this morning, the VIX may test the mid-Cycle support at 17.12.  However, the fractal appears complete.  The new Master cycle may rise as far as mid-April, allowing time for momentum to build.  The minimum target may be the April 7 high near 60.00.

The March 3 options chain shows short gamma between 14.50 and 18.00.  Long gamma is heavily populated between 19.00 and 25.00 with institutional presence every 5 points up to 50.00.

TNX appears to be consolidating after rising from Monday’s master Cycle low.  The new Master Cycle suggests a new trend developing that may last to mid-April.  Today we may see the auction of $200 billion in short-term bills and $44 billion in 7-year notes.  The Cycles Model suggests trendline strength may make a comeback this weekend.

ZeroHedge observes, “After yesterday’s 2 Year auction, moments ago the Treasury sold its second coupon for the week when it auctioned off $70BN in 5 Year paper in a rather lackluster auction. ”

USD futures were repelled at resistance at Intermediate resistance at 97.71 this morning.  It may be making a (minor) Trading Cycle low in the next two days.  The Cycle bottom at 96.56 may be the target.  Once accomplished, the USD may rally to mid-April.

Bitcoin has emerged above its Cycle Bottom support at 65069.00 yesterday and may test that level for support.  Today we may see a burst of strength that could propel bitcoin higher.  The next resistance is Intermediate, at 73064.00.  A stronger resistance may be the 52-day Moving Average at 79705.00.  Should it exceed these levels, Bitcoin may continue rising through the end of April.

Silver futures have decline beneath Intermediate support at 87.74.  Should the decline continue, the next level of support is the 52-day Moving Average at 81.50.  Silver may have another month to complete its correction.  The Cycles Model offers the mid-Cycle support as the next lower level at 54.05.  Further guidance may be revealed as the correction progresses.

Gold futures are being repelled by the Upper trendline at 5250.00.  Should it decline beneath its Cycle Top at 5126.00 it may offer a sell signal.  The target of its decline may be the mid-cycle support at 3969.33.

Crude oil may be in a downside correction for the next week or so.  Its downside target may be the 52-day Moving Average at 60.73.  Once accomplished, WTIC may resume its rally to mid-April with strong momentum.  A breakout above the current level may engage the Head & Shoulders formation with a possible target near 80.00.