SPX futures declined to 7451.40 this morning, anticipating the market will be closed today (Juneteenth). Intermediate support at 7436.88 held, allowing SPX to challenge the Cycle Top at 7484.65 after monthly options expiration day. The Space-X IPO and Kevin Warsh’s influence in the Fed have taken some of the wind out of the market’s sail. Despite waning liquidity, equities appear to be the only game in town at this time. The Cycles Model suggests next week’s probe may be higher with a possible target near 7750.00. Should it go higher, a blow-of top may be indicated. High market strength may be expressed over the next week. Alternatively, a decline beneath 7400.00 may be a bearish warning that all is not well.
June monthly options expiration may be held on Monday. While on balance bullish, a large number of call options may be dropping off, leaving the SPX in a more delicate state.
The premarket VIX is consolidating, remaining neutral going into the weekend. The Cycles Model indicates calm ahead, suggesting there is no desire to hedge at this time. The tranquil outlook may allow the VIX to decline beneath the lower Triangle trendline, possibly matching or exceeding the December low over the next two weeks.
The US 10-year Bond Yield futures rose to 44.88 this morning. However, the market is closed today, so I am showing the weekly chart showing the 2.5 year Triangle formation. The Cycles Model indicates that TNX may decline to the lower Triangle trendline near 40.00 by mid-July. It may begin its slope downward as early as this weekend. That infers both stocks and bonds may rise together in the immediate future.
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