SPX futures reversed in the overnight session, confirming the Triangle formation and completing the (heretofore early) Master Cycle. This is in agreement with the NDX on June 22 and the DJIA Cycle Top on June 25. Should the Triangle formation be accurate, the SPX may decline for 2-3 weeks back to or beneath the bottom Triangle trendline near 7300.00. The dispersion of the Cycle highs inform us that the all-time high is yet to come.
ZeroHedge reports, “US equity futures point to a softer start to the third quarter as investors await a fresh batch of economic data and the first major overseas appearance by Fed Chair Kevin Warsh.”
The premarket VIX rose to 17.19 this morning, ending the current Master Cycle. Should the reversal hold, the VIX may rise to the Cycle Top resistance at 25.82, delaying the completion of the massive triangle formation at or beneath its lower trendline. Triangle formations are delaying tactics, often frustrating both the bulls and the bears.
The US 10-year Bond Yield leaped above the 52-day Moving Average this morning, challenging Intermediate resistance at 44.91. The Cycles Model suggests the TNX has another week of rally, putting the Cycle Top in play to complete the current Master Cycle. Bond volatility is rising to a potential peak next week.
The US Dollar Index continues its bounce this morning, remaining above the Head & Shoulders neckline near 101.00. While the Master Cycle may be complete as of June 24, there are circumstances that may impel the dollar to go higher in the immediate future, extending the Master Cycle another week or so.
Bitcoin is probing lower this morning, on its way to test the Cycle Bottom at 55345.00. While the decline appears orderly, it may become more volatile over the next week. The Cycles Model considers that the current state of affairs may continue to the end of July or early August.
ZeroHedge remarks, “Bitcoin’s latest collapse has broken more than just technical support. The dollar debasement narrative has stopped helping, the relationship with tech has fractured, and even falling volatility is no longer providing relief. Yet as Bitcoin approaches several major long-term support levels, the setup is becoming more interesting than the headlines suggest.”
Crude oil made a nominal new low this morning, potentially extending the Master Cycle another week. The Model suggests rising volatility this week with a possible panic next week. Given that the decline is beyond exhaustion, the panis may be on the upside.
Zerohedge comments, “Hormuz vessel traffic continues to flow, but at a sharply reduced pace compared to the previous week, as US-Iran technical talks resume in Doha without senior negotiators meeting face-to-face.”
Gold futures are consolidating today, but still have further to decline. The Cycle Bottom at 3773.73 may be the primary target for this decline. However, it may go as low as the lower trading channel trendline, approaching 3600.00.
Comments
Log in or sign up to join the conversation.