1. Ugly Monday... The decline in the markets is continuing this morning. The S&P 5000 Index is now testing the May 20th lows. Yields are the real story as the 5-year note is inverting against the 30 year note. Yields on the 2's and 10's are also close to inverting. This is one of the main reasons for the decline since Thursday afternoon. Today's decline is broad based and nothing including energy is being spared. 

2. There are two key events taking place this week. First on Wednesday afternoon the FOMC meeting will conclude and the central bank will make their interest rate policy decision for the US. They are expected to raise the fed funds rate by 50 basis points, but many investors are expecting them to do more, perhaps 75 basis points. They are still behind the curve so I'm not sure it really matters. They need to catch up to the 2 year note yield and that is around 3.2%.

2A. This Friday is options expiration for June. It is also a quadruple witching expiration which means you have 4-different asset classes expiring this week. Buckle up, this week could be very volatile and filled with some serious whipsaw and institutional game playing.   

3.Gold is getting pounded lower as everything deflates today. There are no safe havens today.

4. Dollar is making 9 year high. DXY just shy of 105. Could be heading much higher.

5. Bitcoin is breaking down as well. The possible sideways pattern for upside has failed and the down-trend resumes. It shouldn't find a solid low for a while. I'm sure there will be bounces, but until it reaches 14,300 area I would be very careful.

1. The CPI report was released earlier today rising to 8.6% in May. This is the highest increase since December 1981. This number was also above expectations and the markets are reacting with a sharp sell-off.  Dow down 700+ points

Next week, the Federal Reserve will make their interest rate policy decision. They are expected to raise the fed funds rate by 50 basis points. This news is already baked into the cake, but the fed is still far behind the curve. You see, the fed funds rate should be around the 2-year Treasury note yield and today that is surging to 2.95%. So the Fed still has a ways to go before reaching that number.

2. Everything is falling. Stocks, bonds, gold and even energy stocks are slightly lower. Next week is also options expiration for June. This is a quarterly expiration which is called a quadruple witching expiration. That means there are 4 different asset classes set to expire next week. This usually makes for a lot of whipsaw and sometimes volatility. Also expect a lot of institutional game playing with many of the popular stocks.  

3. Bitcoin is also on the weaker side today trading back below the 30,000 level. It is still holding the consolidation pattern from May 13th, so it has a fighters chance to uptick still. Please note, the bigger trend is down for bitcoin so if it starts to break the consolidation pattern the selling could pick up quickly.

1. Markets are once again chopping around like a ship in the middle of a storm. This type of action does not look to be ending anytime soon, so make sure you take your Dramamine. 

Everyone is now looking forward to the Friday CPI number to get a gauge on inflation. As we all know, inflation remains high. 

2. Oil is trading around $120.00 a barrel and nat gas is now nearing $9.50. Honestly, the United States policy toward energy is the primary cause of this rising price. High energy prices are a direct tax on the consumer. 

3. Gold is flat again. 

4. Bitcoin is slightly lower today, but it remains in a sideways consolidation pattern. So it lives to fight another day, but the bigger picture trend is still down.

1. Elon Musk is pressing Twitter (TWTR) again today.  Musk is requesting certain data and information to facilitate his evaluation of spam and fake accounts. It sounds like this deal is really in trouble, especially if Twitter is not going to cooperate.

2. Markets are rallying higher today to start the session. This rally comes after a sharp Friday sell-off. So far, the rally is being led by the tech heavy NASDAQ. That is a positive in the near term. Just remember, these markets have been very volatile day to day and that is not likely to change anytime soon. 

3. Natural Gas futures (NG) trading is up by 6.0% again this morning. It was actually a little higher earlier and now has pulled in a little bit. Either way, this commodity remains very strong and in an uptrend. $10.20 is the next milestone. When it goes there, all bets are off. Nothing can stop the energy freight train.

4. Gold is Flat today, but holding up at the moment.

5. Bitcoin is bouncing today. The popular crypto is trading higher by 5.0% and looks to be possibly making a zig zag up chart formation. Just remember, the trend is still down so if the bull pattern fails it would lead to a big move lower, but so far its holding up well. It’s doing the cha-cha.

1. Volatile markets remain intact. Nearly every trading day is a roller-coaster ride. traders and investors have to be very nimble at this stage of the game. 

2. The FOMC minutes will be released at 2pm ET. Remember, these are not a true transcript of the last Fed meeting. They are a brief outline of what the central bank wants to get across to you. Over the past few days. Many talking heads on TV are talking about the Fed slowing down when it comes to interest rate hikes. I beg to differ, because these guys are way behind the curve and QT (quantitative tightening) is also long overdue  with a $9 trillion balance sheet. 

3. This is the final trading week before the Memorial Day holiday. Often the volume will get lighter into Friday and that is usually favorable for some more upside, but I would not take anything for granted in this environment. 

4. We called Natgas back in January when it was just breaking $4 per mcf. Now it’s going to $10 on its way to $15.

5. Gold is pulling back today after a decent bounce. I don't see a problem with it yet. 

6. Bitcoin is trading up a little, but it is still just below the psychological 30,000 level.  At this time, it still lives to fight another day, but the trend is still down.

1. Options expiration Friday was one big roller-coaster trading session. By the closing bell stock had reversed a sell-off to new highs and actually finished flat on the day. Today, the markets are seeing some follow through buying to start the day. Either way, nobody is really trusting any rally at this stage of the game. Traders must be very selective on both the long and short side atthis time.

2. Geopolitical events are still front and center. Over the weekend, President Biden said that the US would defend Taiwan militarily, While the markets do not seem phased at the moment the US still has a lot of manufacturing coming out of China. This could come back to bite the United States.

3. Gold is catching a bid today as the US Dollar Index pulls back. So far, the 1785 gold futures support level has been a decent bottom.

4. Bitcoin is also trading higher today recapturing the psychological 30,000 level. While there is nothing great for bitcoin right now it lives to trade another day.

1. Markets are under pressure to start the day. This dip comes as Target (TGT) reported earnings that were impressing Wall Street. Today, Target stock is trading lower by 25%. This is the biggest one day decline that I can remember in the stock. Today's news from Target echoed Walmarts (WMT) report yesterday. The bottom line, inflation and supply shortages are hurting earnings. This news is really weighing on most of the leading retailer stocks today. When companies fail to hit their numbers, look out below.

2. MBA Mortgage Applications -11.0% wk/wk (purchase apps -12.0% wk/wk and -15.0% yryr). This news is also hurting the home-builder stocks today. 

3. Gold is flat today, but holding up at the moment. Silver can’t catch a bid.

4. Bitcoin is now trading slightly lower falling below the psychological 30,000 level. The pattern is developing, but remember the trend is down. Trend is down on all the cryptos.

1. The major stock indexes rallied higher this past Friday and held the gains into the close. This Is a change in character as the past 5 Friday's have been negative and often big declines. The major stock indexes are starting out a little weak today, but nothing horrible is taking place. Often after a big rally session the next day is more subdued. This Is actually normal and that is saying a lot for what we have seen recently. 

2. This Friday is options expiration for May. Traders should be aware that this is often a week of institutional game playing by the institutions. They will often move stocks away from the popular strike prices that expire on Friday. 

3. Twitter (TWTR) stock is falling today by over 5.55%. This is telling us that many people are doubting that Elon Musk will likely pull out of the deal to take the company private. As you know, last week he inquired about the number of real accounts that the company actually has. He found from a past quarterly report that there are lots of accounts that are actually bots. So it sounds like that takeover price will be lower or the deal is off. 

4. Gold is flat today, but there is a lot of support around the $1785.00 area which was tested earlier this morning. 

5. Bitcoin is sitting just below the 30,000 level today. Its still holding above that important 27,000 area that was tested last week, so we shall watch the pattern that develops this week.

1. The Senate is finalizing the $1 trillion infrastructure bill. This could be voted on later this week.
This bill still has to get through the House of Representatives, so it could be a while before anything final takes place. Either way, the markets love debt and easy money. 

2. The semiconductors ($SMH) stocks are strong again today. As long as this industry group holds up there is usually nothing wrong. When this important sector turns down then there are usually big problems ahead for tech and often the broader markets. Thi sis something that I use as a stock market barometer.

3. Gold down slightly but not out yet. Not quite ready to back up the truck, but that day is a ways off.

4. Bitcoin was down below 30k but now is trading slightly above. It’s not out of the woods yet, more weakness to come?

1. Earlier today, the CPI report was released. 

From CNBC:

The consumer price index accelerated 8.3% in April, more than the 8.1% estimate and near the highest level in more than 40 years.

Core CPI, which excludes food and energy, also was higher than expected, rising 6.2%.

Shelter costs, which comprise about one-third of the CPI, rose at their fastest pace since 1991.

Inflation-adjusted earnings continued to decline for workers, falling 2.6% over the past year due to the surging cost of living.

2. Markets are extremely oversold right now so that is really the only bullish case I can make. Remember, nothing goes up or down in a straight line in markets. 

3. The US congress just approved $40 billion for Ukraine. This is one of the biggest reasons why the markets cannot stabilize.  The more the west gets involved the worse it gets for markets. 

4. Gold is catching a small bid today, but it should go lower.  Gold futures have solid support around the $1785 area. 

5. Bitcoin is slightly lower today testing the important psychological level. I think the pattern suggests a move lower to 27,000 is next.