Oil climbed, yields climbed, and the party found its bill.

The moves to new all-time highs are continuing but the momentum – in the form of the range of movement – is getting smaller. The conviction is getting weaker.

Aside from the Stock Trader’s Almanac, the move higher may well be happening as opposed to the resting week history suggests. We are only on hump day so it still can stall in line with historical stats. And the main stock indexes continue to befuddle and stupify. One for the potter heads.

Gold is middling still and not interesting just yet.

Oil is pushing back into the prior range. Overnight moves and an intraday pullback to 95 would be great to join the party.

BTC has fell out the apple tree missing all the branches on the way down. A corrective move before the next leg down makes sense. I’d look for more shorts around the 70k level with a view to looking for a move to 60k – and remember we have potential down to 50k. Given the alt-season narrative and the die-hards want to be bullish, I’d part anticipate a fast sell-off and an even faster recovery so the coinheads can talk about the alt-season bulls. This is currently and historically a self-fulfilling prophecy.

Tag ‘n Turn:

SPX remains the same. The rising channel is changing its angle of dangle – or momentum, if we want to be specific. Let’s stick with waiting for a breakout.

RUT breakout turns out to be a false break. I’m not yet bullish so I can keep holding until Thursday before I need to figure out what I need to do with my swing. A break over the range highs will put us back in a bull move. The range-lows break puts us back in the big picture range reversal on the daily chart, as this is the only daily pattern that’s confirming to the 6 money-making pattern.

GEX has huge bullish exposure but overnight we see again some bear GEX sneaking in – super tiny. So I’ll be looking to see if that increases or disappears.

Overall, we could well see price push lower (which is happening in the pre-market futures) then push higher again – which is the frustrating theme we keep seeing.

As always, I personally want to see some sort of corrective move.

Market Briefing:

Wednesday 3 June – hump day, the day at which the week’s momentum has been observed to consider whether it would prefer to lie down. ADP private payrolls land at 08:15 ET. ISM Services at 10:00 ET. The tape, having printed three records on Monday, slipped on Tuesday, and is mid-week considering whether to print a fourth or whether to finally indulge the pause history says always comes.

• Tuesday closed: SPX 7,609.78 +0.13% (fresh record) / Nasdaq 30,743.69 / Dow 51,213 / NATHs SPX 7,620.90 still in view

• The Three Atlases continue to carry the load. The 497 supporting names remain on standby. The pigeon quartet’s lament for them remains in rotation

• WTI 96.45 +3.28% overnight back inside its prior channel / Brent firm above $95 / Gold 4,487.80 -0.69% middling / VIX 16.08 holding tight, year low 13.38 still in view

• Today’s calendar: ADP NFP Wed 08:15 ET (116K forecast vs 109K prev) / ISM Services PMI Wed 10:00 ET (53.8 vs 53.6) / NFP Fri 08:30

• The Almanac stat continues to apply: only the 14th 9-week streak since 1930, the strongest at +19.0%, average post-streak 1-week return -0.84%, only 31% positive in the week immediately following

• BTC 67,444 after the apple-tree descent. Larger Range Breakout target annotation now visible at the 60k zone on the daily

Market Snapshot

• ES: 7,614.25 / -14.00 (-0.18%) / NATHs 7,632.25 / overnight slip

• YM: 51,213 / +461 (+0.99%) / NATHs 51,443 / Uncle Dow leading

• NQ: 30,747.25 / +4.25 (+0.01%) / NATHs 30,785 / Nazquack barely moving

• RTY: 2,922.90 / -13.30 (-0.45%) / NATHs 2,952.00 / Uncle Russ the false-breakout one

• GC: 4,487.80 / -31.40 (-0.69%) / middling, not interesting just yet

• CL: 96.45 / +3.06 (+3.28%) / WTI back inside the prior channel – pullback to 95 would be the party invite

• VIX: 16.08 / +0.32 (+2.03%) / firming slightly off year-low approach

• BTC: 67,124.48 / +466.13 (+0.70%) / corrective bounce starting after the apple-tree descent

Tag ‘n Turn

SPX rising channel angle softening – stick with waiting for the breakout. RUT breakout turned false – holding the swing until Thursday. BTC fell out the apple tree, looking for more shorts around 70k, 60k target, 50k below. Oil pushed back into the prior range – pullback to 95 would be the invite.

Four different waits on four different charts. SPX waiting for the breakout the chart hasn’t decided. RUT waiting for Thursday to confirm which side of the range. BTC setting up the next short on the bounce. Oil waiting for the 95 pullback. The talking heads describing the rally yesterday have continued to describe it without describing the range, which has continued to shrink without describing itself.

SPX Analysis

SPX remains the same. Rising channel is changing its angle of dangle – or momentum, if we want to be specific. Stick with waiting for the breakout. NATHs 7,620.90. Current 7,609.77.

SPX remains the same.

The rising channel is changing its angle of dangle – or momentum, if we want to be specific.

Let’s stick with waiting for a breakout.

Current Status: In range / channel angle softening / wait for the breakout / NATHs 7,620.90 / 30-min close 7,609.77 / 7,570 visible support level

Gamma Exposure

Huge bullish exposure but overnight we see again some bear GEX sneaking in – super tiny. Watching whether that increases or disappears. Gamma flip 6,863.53. Put wall 7,600. Call wall 7,600. IV 13.27%. IV Percentile 36%.

GEX has huge bullish exposure but overnight we see again some bear GEX sneaking in – super tiny. So I’ll be looking to see if that increases or disappears.

The put wall and the call wall sit on the same strike at 7,600 – the gamma compression configuration. The largest call gamma node now sits on the board at 7,700.

IV at 13.27% against historic 9.58%, with IV Rank 16.64% and IV Percentile 36%.

Current Status: Flip 6,863.53 / Put Wall 7,600 / Call Wall 7,600 / IV 13.27% / HV 9.58% / IVR 16.64% / IVP 36% / Bear GEX super-tiny but present

RUT Analysis

RUT breakout turns out to be a false break. Not yet bullish, holding the swing until Thursday before deciding. Break over the range highs = back in a bull move. Range-lows break = back in the big picture range reversal on the daily, the only daily pattern confirming to the 6 money-making pattern. NATHs 2,942.41. Current 2,931.96.

RUT breakout turns out to be a false break.

I’m not yet bullish so I can keep holding until Thursday before I need to figure out what I need to do with my swing.

A break over the range highs will put us back in a bull move.

The range-lows break puts us back in the big picture range reversal on the daily chart, as this is the only daily pattern that’s confirming to the 6 money-making pattern.

Current Status: False breakout printed / holding swing through Thursday / range high break = bull / range low break = big picture reversal / NATHs 2,942.41 / current 2,931.96 / range-low support 2,885.52 / big picture daily 2,730.10

BTC Analysis

BTC has fell out the apple tree missing all the branches on the way down. Corrective move before next leg down makes sense. Looking for more shorts around 70k with view to 60k and remember we have potential to 50k. Alt-season die-hards will try the recovery – fast sell-off and faster recovery is the self-fulfilling prophecy.

BTC has fell out the apple tree missing all the branches on the way down.

A corrective move before the next leg down makes sense.

I’d look for more shorts around the 70k level, with a view to looking for a move to 60k – and remember we have potential down to 50k.

Given the alt-season narrative and the die-hards want to be bullish, I’d part-anticipate a fast sell-off and an even faster recovery, so the coinheads can talk about the alt-season bulls.

This is currently and historically a self-fulfilling prophecy.

The 4hr chart shows the descent from the daily range highs near 82,000 has now reached the Larger Range Breakout Target annotation at the 60k zone visible on the daily, with current price at 67,444 mid-corrective-bounce. The Bear Entry annotation at 76,385 and Stop Loss at 77,834.55 sit well above. The next short setup is the bounce back toward 70k.

Current Status: Apple-tree descent printed / Larger Range Breakout target zone reached / corrective bounce in progress / next short setup around 70k / 60k zone target / potential 50k below / current 67,444

CL (Oil) Analysis

Oil pushing back into the prior range. Overnight moves and an intraday pullback to 95 would be great to join the party. Current 96.45 +3.28%.

Oil is pushing back into the prior range.

Overnight moves and an intraday pullback to 95 would be great to join the party.

Current Status: Back inside the prior channel / pullback to 95 = entry / current 96.45

Rounding Off

Records Printed With Quieter Conviction. Wall Street closed Tuesday at a fresh S&P 500 record of 7,609.78 on lighter daily range and a visibly softer rising-channel slope. The Nasdaq added 0.81% to a record. The Dow added 0.85%. The Russell 2000, which broke out of its range on Monday, broke back into it on Tuesday, which the chart has politely declined to call a breakout. WTI ran +3.28% on the Hormuz threat, putting prices back inside the prior channel that yesterday it had stepped out of. Gold eased -0.69% in a way nobody is being asked to comment on. The Three Atlases continued to carry the load and have not yet been observed asking for a coffee break.

What We Are Watching For. A pause. A few up days, a few down days. Something normal-ish. The 9-week streak just printed is the strongest in the data set going back to 1930, and the Almanac says the immediate aftermath is statistically soft. Hump day is still inside the historical window for a pause to print. ADP private payrolls land before the open today. ISM Services prints at 10:00. NFP closes the week Friday. The system reads what the system reads. SPX waits for the breakout. RUT holds the swing through Thursday. BTC sets up the next short on the bounce. Oil pulls back to 95 or it doesn’t. Trade small. Keep consistent to the process.

Expert Insights

Tuesday closed at fresh records on lighter range. The Russell broke out and broke back in within the same week. WTI is back in its prior channel having briefly stepped out. The Almanac data showing the post-9-week-streak average return is -0.84% in the immediately following week, and only 31% positive, sits on the desk of nobody in particular. The talking heads describing the rally have continued to describe it without describing the range.

Rogers’s line covers four open questions today: the SPX range break (not yet); the RUT swing decision (Thursday); the BTC next short setup (around 70k); the oil pullback opportunity (to 95). The trader’s job is to keep four watch-lists clean, manage what is already open, and let the chart print the entry. Sitting on hands sounds boring. It is the trade.

[Source: Jim Rogers, A Bull in China and various public interviews, public]

Fun Fact:

The “stunning charm” potter-heads reference is, in the canonical wizarding-world literature, properly called the Stunning Spell and its incantation is “Stupefy” — first introduced in J.K. Rowling’s Harry Potter and the Goblet of Fire (2000) and used continuously through the series thereafter. Its sister charm, the Confundus Charm (the formal Befuddlement Charm), causes confusion in the target and is the source of “befuddle” in the same lexicon.

Both spellings — “stupefy” and “befuddle” — are also regular and very old English verbs, predating the Harry Potter series by centuries. “Stupefy” dates to the late 14th century from the Old French stupéfier via Latin stupefacere meaning “to make stupid or numb.” “Befuddle” is more recent, with the Oxford English Dictionary recording first use in the 1850s.

What makes this pairing satirically efficient is that both spells are essentially correct descriptions of the United States equity tape this week: it has printed fresh records on progressively smaller candles, the rising channel has visibly softened, the conviction has shrunk, and the Almanac data has been politely placed on the desk of nobody in particular. The indexes are, in the most literal sense, befuddling and stupefying their observers. The wizarding community is yet to comment.

[Sources: J.K. Rowling, Harry Potter and the Goblet of Fire (2000) for the canonical spell names;
Oxford English Dictionary for the etymology of the regular English verbs; both public]

Trade well,
T2 Markets

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