Confusing geopolitical noise continues.

Markets entered the week numb to Trump's now-familiar Sunday evening habit of walking back Iran war threats before the Monday open — a pattern markets have largely stopped reacting to. Fortune 

True to form, Trump posted on Truth Social at 7:26 a.m. Monday, claiming the US was in "serious discussions with a new and more reasonable regime" in Tehran, while simultaneously threatening to obliterate Iran's power plants, oil wells, and Kharg Island if the Strait of Hormuz wasn't reopened — sending S&P 500 futures briefly higher. The Daily Caller 

Within the hour, Secretary of State Rubio contradicted Trump's claims, and Iran's government flatly rejected the overture as "excessive and unrealistic," leaving markets directionless. The New Republic 

Monday evening, the Wall Street Journal reported Trump told aides he was willing to end the Iran campaign even if the Strait of Hormuz remained closed — a significant shift in his stated red line. U.S. News & World Report 

Tuesday brought the best session since May: the S&P 500 surged +2.91%, the Dow gained +2.49%, and the Nasdaq jumped +3.83% after an unconfirmed report surfaced that Iran's president was open to ending the war with guarantees — with airlines rallying and oil retreating from its highs. CNBC

Go figure.

Sonnet can do many technical analysis (TA) tasks, from elementary TA to EW and cycle analysis.

It can evaluate competing EW counts and rank them, identify EWT rules violations, and even detect EW counts from raw data. I have not tested the last one yet.

It can also perform cycle analysis of financial instruments, including the detection of cycles, plotting FLD for cycle price projections, and creating cycle composite plots.

I tested it first for time -frequency analysis of SPX, to see how cycle periods and strengths vary over time.

Sonnet used a windowed short-term FFT to detect cycle periods and strengths as window shifts in time. The plot is shown below.

It detected four dominant cycles of periods 79 (blue dashed line), 124 (green), 185 (orange), and 319 (red) trading-day cycles.

In the top 2D figure x-axis is time, y-axis is the cycle period, and the brightness represents the strength.

The 195 TD (nominal 40-week) cycle was the strongest and had the most stable period from 2012 to 2026; it is a very common cycle used by many cycle practitioners.

I will next test Claude’s OPUS and Claude Code engines, which have much stronger analytical capabilities. Likely, I will also test Gemini Pro, time permitting.

I know, this is like drinking water from a fire hose for many, but most people will have to learn to use AI tools efficiently to stay competitive.

And there is a potential for AI to save a lot of time in various aspects of financial market analysis, such as generating stock screens, performing various technical analysis tasks, and even producing buy and sell decisions based on predefined fundamental and technical analysis criteria.

If you are interested in financial markets, you are missing a lot by not following me on X, as I do not have enough canvas space in the newsletter to post all my research, which I try to post on X. Also, I often post important real-time updates between the newsletters.

We got a stock market beach ball bounce after five weeks of weakness.

After a down week, we got additional selling on Monday and a turnaround on Tuesday. This is a pattern that I have seen many times, a classic.

News that the US may not pursue the opening of the Strait of Hormuz may have helped, despite confusing signals from the Trump administration.

The sentiment was getting too pessimistic, and this did not come as a surprise to Pro subscribers.

The market bounced from the cycle trough window, and multiple indicators from our multi-pronged methodology, including Elliott waves and cycle price projections, were indicating a reversal.

If you have money in financial markets and are not following our analysis in the Pro newsletter, you are not doing yourself a favor. Let me do some shameless promotion.

Our objective multi-pronged methodology is the best that money can buy. 

The Pro subscription is considerably cheaper than that of most newsletters that follow a single methodology. 

And there is an incredibly affordable 3-month trial, less than the price of a coffee for a monthly subscription.