SPX futures consolidated above the trendline overnight, testing Intermediate resistance at 6810.00. It has since declined back beneath the trendline and 52-day Moving Average at 6866.60, making new lows. Semiconductors have joined software companies in leading the momentum sell-off.  Stock buybacks are at a low point and may go lower, considering that the electrical grid is already at capacity. That means cheap energy is no longer available and data centers may have to build their own power supply.  Increasing capex may take precedence over future stock buybacks, since financing costs may be rising. The choppiness in price movement, especially beneath 6800.00, may give way to a steady decline to mid-Cycle support at 6527.70, per the Cycles Model.

Today’s options chain shows Max Pain at 6920.00. Long gamma may be found above 6945.00, whils short gamma resides beneath 6900.00. Sentiment still leans toward long gamma, but that may change with more downside action.
 

The premarket VIX has risen to 21.18 thus far this morning, just beneath the Cycle Top at 21.46 and upper Triangle trendline near 22.00. A breakout may trigger the hedging response by many, while short gamma may be taken behind the woodshed.  The Cycles Model infers that today may be a very strong trend maker for the VIX. Let’s see if it breaks out.
 

TNX may be correcting back down to the Head & Shoulders neckline at 42.05 this morning. No fireworks, just a steady rise in yields over the next two weeks. The target remains at the Cycle Top at 45.17.

ZeroHedge observes, “Ahead of today’s much-anticipated quarterly refunding announcement by the US Treasury, some were hopeful that Bessent could pull an anti-Yellen and forecast a gradual decline in long-term issuance in coming quarters, sending yields lower. None of the happened, however, and instead the Treasury did not surprise markets, announcing that this quarter’s refunding total would come in line with estimates, at $125BN (to refund $90.2BN in securities).”
 

USD resumed its rally toward multiple resistance between 98.14 and 98.45. It may be due for a pullback to the Cycle Bottom at 96.75 after testing the resistance band. Trending strength may return later next week.
 

The Japanese Yen may have hit its Master Cycle low this morning at 63.72. Watch for a bounce above the 52-day Moving Average at 63.98, which may emit a buy signal. The rally out of this low may be short, but very sharp, as the Yen may rise precipitously to its Cycle Top in just 2-3 weeks.Once a breakout occurs, the rally may be fueled by short covering. Those participating in the yen carry trade are also short the yen, and may have to reconsider their leverage options, as this may blow up their risk (payback) assumptions.
 

Bitcoin may be making its Master Cycle low today, having exceeded its Head & Shoulder target. The Head & Shoulders formation has been noted in this blog since late November. The Cycles Model calls for as much as two months of correction out of this magnificent low. The first 3-4 weeks may be choppy, but critical to this rebound. A buy signal may be found above the Cycle Bottom, currently at 76133.00. Investor confidence in bitcoin may not return until it rises above the 52-day Moving Average at 88242.00.

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