ES1! resistance levels: 5719-5722
ES support levels:6705-6706, 6690-6694, 6680-6682
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ES1! resistance levels: 5719-5722
ES support levels:6705-6706, 6690-6694, 6680-6682
As gold reversed from 3900, this sell off will likely signal a correction in equities as well because both markets are liquidity-driven, meaning a decline in gold will imply less excess liquidity in the market which in turn has bearish implications for other risk assets. If ES1! takes out 6685, bear should take the control again
ES1! resistance levels: 6712-6714, 6719-6722
ES support levels: 6695-6697, 6685-6687
SPX seasonality over the past twenty years
ES1! was mostly negative overnight as odds of a U.S. government shutdown ticked higher after Trump's meeting with congressional leaders failed to produce a deal. The actual macro hit from a shutdown is small—benefits, interest, and tax collection continue—but the market effect is a likely NFP delay and a broader data blackout, leaving the tape to trade off PMIs, jobless claims, and ADP.
SPX is on pace for one of the best Septembers since 2010, and September is historically the worst-performing month. October–December is typically a strong stretch, with November the second-best month of the year over the past 20 years, behind only July. The broader backdrop is an easing shift from the Fed that acts as insurance against a soft patch. The key risk is a deeper labor slowdown—if that materializes, rates and the dollar can reprice lower and equity vol picks up. So far the labor market has cooled, not cracked. The longer growth holds with softer labor, the more the market will look past tariff noise toward 2026 tailwinds from fiscal support and lower rates, keeping the path open for equity upside.
Figure 4— BIST with Türkiye CPI overlay (pink, right axis): The equity index shows a parabolic nominal advance from 2022, while CPI accelerates alongside it. This pairing illustrates the high-inflation playbook: deeply negative real deposit rates push domestic savings into equities as a currency escape valve, even as purchasing power erodes. Argentina offers the same lesson at a higher octave: the local equity index routinely sets records in pesos even as hard-currency returns whipsaw—proof that nominal charts can be currency mirrors rather than measures of real wealth. In hyperinflation, as seen in Venezuela's prior episodes, equities become a scoreboard for money printing; gold in local terms explodes; purchasing power still collapses. The through-line is consistent: without an inflation anchor, nominal assets can rip together, and the higher they go the harder it becomes to separate real return from currency illusion. Mapping that back to the U.S. today, the ingredients rhyme with the 1970s template, even if the mix is different. CPI is the only major line that refuses to trend down decisively; long yields and TIPS yields have rolled over; the Fed is boxed between weaker growth and inflation that hasn't been subdued; fiscal deficits remain large. In that setting gold accretes first and most cleanly, because it carries no duration or credit. Equities can follow while the nominal window is open—particularly those with pricing power, hard-asset leverage, or AI-enabled margin buffers—but the endgame still belongs to inflation. When CPI re-accelerates or real yields re-price higher to regain credibility, the same forces that levitated stocks can reverse quickly. That is why our strategic view remains cautious even as we tactically respect the potential for rallies into year-end. Two practical implications follow. First, price everything in hard-currency terms when you evaluate “new highs.” Nominal records can be FX smoke; real purchasing power is what matters. Second, watch real yields with the same intensity you watch earnings. The regime turns when inflation breaks lower for fundamental reasons or when policy enforces durably positive real rates. Until one of those conditions arrives, the 1970s logic holds: gold leads in an inflation-led tape, and equities can levitate on nominal optics—but neither resolves the growth problem. Only anchoring inflation does. That is the point we started with and the point we will finish on. You can trade the nominal tide— we have, and we still expect a constructive Sep–Dec window as flows and optics line up—but don't confuse the tide with the moon. The economy cannot be fixed without fixing inflation first. Gold's strength is telling you that story in real time.
Figure 1 — XAUUSD vs. US Real Yields (monthly): Top panel shows Gold price while bottom panel plots the inverted 10-yr TIPS real yield (blue). From 2003-2022 the two trended together; since 2022 real yields rose (blue fell) while gold kept advancing. A renewed upturn in the inverted TIPS series would realign the classic pattern. Gold's behavior in an inflation-led regime is straightforward. When the unit of account is being diluted, scarce assets reprice higher in that unit. The opportunity cost of holding gold collapses when real yields go negative—either because the policy rate is cut into sticky CPI or because inflation runs ahead of nominal yields. Add fiscal slippage, debt monetization, and stop-go credibility from policymakers, and gold becomes the default hedge for balance sheets that can't tolerate duration risk in bonds or valuation risk in growth equities. In stagflation specifically, when stocks and bonds can fall together, gold's low correlation gives it pride of place as the portfolio shock absorber. We have a clean historical template. In the early 1970s the U.S. severed the dollar's link to gold, oil shocks hit in 1973 and again in 1979, CPI ran into the double digits, and real rates stayed negative for long stretches. Through that period gold moved from the legacy $35/oz anchor to a blow-off near $850/oz by January 1980—a move that outpaced both CPI and equities in real terms. The mechanism wasn't magic; it was policy arithmetic. Negative real yields made cash and long bonds guaranteed losers; fiscal needs made money easier than rhetoric suggested; intermittent tightening cycles lacked credibility because each recession forced a quick pivot. Capital that needed a store of value had few choices. Gold absorbed that demand until the regime changed. The regime did change when the Volcker Fed held policy rates above inflation long enough to restore positive real yields and credibility. Once real yields were durably positive, gold's super-spike ended and the metal spent much of the 1980s trending lower or sideways. The lesson is blunt: gold's structural bid persists so long as inflation isn't anchored and policy is either easing into it or failing to get ahead of it. That same logic explains why equities can rise alongside gold for a time. In an inflationary up-draft, companies report higher nominal revenues even if unit volumes are flat, replacement costs climb, and fixed-rate liabilities get easier to service in real terms. Index-level optics can look especially strong when a handful of large-cap price-setters lead the tape. Margins compress later, not immediately; valuation multiples can even expand if rate-cut hopes pull discount rates down faster than inflation eats into earnings power. That lag—between nominal revenue inflation and full cost pass-through—is where indices levitate. This is why we argued at the start of September for a constructive Sep–Dec window: buybacks re-open, performance chasing into year-end picks up, and an easing narrative can grease financial conditions just as seasonal flows improve. Consider Türkiye as a live-fire example of how gold and stocks can climb together under high inflation. With inflation still elevated and deposit rates negative in real terms, local investors have used both gold and equities as currency escape valves.
Figure 2— XAUTRY1! in TRY: Gold priced in lira has stair-stepped to successive all-time highs since 2022, illustrating the cleanest hedge against currency debasement when domestic deposits earn deeply negative real returns.
Figure 3— BIST: The equity index shows a parabolic nominal advance from 2022, with only brief corrections before pushing back toward the highs—classic behavior when equities serve as a local currency escape valve.
ES1! tagged the support around 6630 that I noted in yesterday's opening comment and stayed below our 6675 resistance. The index briefly took out 6675 in the premarket on PCE, but the breakout was marginal and could fail early. Over the past few days the tape has felt heavy—declining under its own weight—yet dip buyers still appear at intraday supports. In a more bullish backdrop, we'd expect a sharp multiday liquidity break, then a persistent grind higher. Instead, this looks like a steady, orderly selloff that accelerates into year-end. I think it could last into late December, nearly three months of correction, potentially to ES= 6200 ±50 or 5950 ±50. During this period, rallies will likely be sold at key levels; today could be one of those days, as ES already faded back toward 6675 (yesterday's resistance, now support). On the other hand, for the bulls to prevail, ES must reclaim 6700.
ES resistance levels: 6683-6685,6696-6698,6708-6710
ES support levels: 6667-6670,6645-6650,6630-6635
I'm expecting ES to fail and test 6645 in the morning. If it holds, a bounce toward ~6675 is likely. If not, look for the low-6630s and potentially 6600. Today could chop if yesterday's heavy sell volume leads to digestion—but for that, 6645 must hold on a morning test.
Futures cratered in the overnight session ahead of the releases, and indices sold off further after the data. ES tested the low-6650 in the premarket, which is close to the 6630-6645 support zone. I expect a test of this zone this morning as late longs get stopped.
ES1! resistance levels: 6673-6675,6687-6687
ES support levels: 6643-6645,6630-6633,6600-6602
I'm expecting a test of 6645 or the low-6630s in the morning. If that area holds, we likely chop between the morning high and low for the rest of the day. If it breaks, 6600 is the next stop.
ES1! daily, showing a support around 6640
Given the pending economic releases tomorrow and Friday, I think both the upside and downside are likely limited today. We could still make a new low below 6700 on ES1!, but it probably won't trend until there's a decisive break—which may come with one of those releases later this week. The 6675–6680 area may be the most important bull/bear line for the rest of the week.
ES resistance levels: 6732-6734,6748-6751
ES support levels: 6715-6718,6700-6702,6688-6691
I think ES will remain range-bound between 6690-6730 today.
SPX Daily, we traded this line into July and stood down after a retest of the lifetime resistance from above confirmed it as ST support. Nothing material has changed since. I'm waiting for a re-entry. No edge, no trade—patience is a position. I encourage you to do the same. The cycle will begin eventually.
SPX Monthly, SPX has been diverging from the lifetime resistance line. On the monthly chart, it's only a marginal breakout. And as I noted when I first showed the SPX lifetime resistance chart, a few percent above the line barely registers on a monthly chart and won't change the endgame.
The market sold off first after Powell began the press conference last week, though it recovered before the close that same day. It sold off again today after Powell acknowledged slower hiring. A slowing economy is the real worry. The tape has kept rising on very bad breadth, echoing January 2018, when Yellen suggested there would never be a market crisis again. I think whatever is happening now will likely be worse than the 2018 correction, when SPX fell 8% in three sessions. In the current market, break points get closer and closer as prices rise because of the sharp angles. Once those break points are taken out, volatility spikes.
Over the last three decades, every major bear market began around the time the Fed started cutting rates. SPX weekly (black, right), Fed rate (Red, left)
These lines tend to move in the same direction. Right now, the copper/XAUUSD and oil/gold ratios are
falling, which signal recession. TIPS and Treasury yields are also declining, and the Fed's rate will
likely follow soon. The only thing that won't follow the downtrend and could even cause the others
to reverse is CPI. Remember this, you cannot fix a growth problem without solving the inflation
problem first. If you have doubts, ask Erdogan or Maduro.
Copper/Gold ratio(yellow), Oil/Gold ratio (Blue), US 10Y yield (Grey)
10Y TIPS yield(Grey), Fed rate(Black), 5Y TIPS yield(Cyan), CPI(blue)
During yesterday's rally, the negative divergence between NQ1! and ES1! was evident. NQ kept making lower lows while ES surged to 6600. This divergence was largely driven by rotation out of growth/tech into more defensive stocks. In a sustainable bull market, we'd expect the opposite.
ES resistance levels: 6593-6596, 6600-6602
ES support levels: 6580-6582, 6574-6577, 6565-6567
The 6574-6576 zone is key ST support. If it fails, we could see a continued decline into next week's Fed (pullback into the Fed, with potential downside acceleration after).
Futures repeated the same intraday and overnight pattern back to back: selloff after the open, an intraday low followed by a rally into the close, then an overnight rally, only to gap up and sell off again. One thing that was different yesterday is that VIX and VVIX were up considerably despite the afternoon recovery, and breadth was very weak, with three mega cap tech stocks lifting the entire market. CPI initially knocked prices lower, but the market recovered and is now trading around the pre-CPI level.
ES1! resistance levels: 6565-6567,6576-6578,6588-6592
ES support levels: 6543-6544,6521-6523,6500-6503
I expect more of the same today. Fed rate cuts don't fix a weakening economy until they get deeper and credit availability propagates through the system. Even if the Fed keeps cutting for months, it typically takes 9–15 months for the economy to feel the benefits—likely alongside additional inflation. After today's CPI, a September cut may be minimal (0.25%), which could trigger a nasty reaction. In that case, the market may front-run the move and start trading lower ahead of the decision.
Traders started to front-run Sept 17 rate cut (five trading days away). I still think indices may fade into the Fed during the last few trading days, because SPX can't stray far from its lifetime resistance and gold is still soaring. Bulls will likely stay constructive during such pullbacks, and a post-fed breakdown could force them to liquidate at lower prices, all happening right into September Opex, which tends to skew bearish. I think this is the pain trade for the masses.
ES1! resistance levels: 6578-6580
ES support levels: 6542-6544,6533-6536,6525-6528
The market stayed in a tight range (6490–6515) yesterday, printing an narrow range 7 day. These narrow ranges often come in clusters, but once they break, they tend to expand. As of yesterday's close, price is compressed into a tight wedge that implies an explosive move. The support is still around ES 6460, once that level is taken out, a snowball effect is possible.
ES1! resistance levels: 6517-6518,6524-6526
ES support levels: 6493-6495,6485-6487,6460-6465
Into Fed day, intraday ranges have been compressing. There are many possible reaction paths (rally-then-reverse, immediate drop, various fakeouts), but the destination could be similar. My gut says that if we're going to drop right after the Fed, we may see signs of weakness beforehand which is the most painful setup for bulls hoping to sell the news.
Futures recovered some of Friday's losses in the overnight session, in sympathy with the Nikkei's strong rally following the resignation of a hawkish prime minister. As noted Friday, SPX can't stray far from its lifetime resistance, so these ups and downs may still resolve into a larger decline.
ES1! resistance levels: 6511-6512,6527-6529
ES support levels: 6496-6499,6477-6480,6450-6453
Indices pushed through ES1! 6485 yesterday on expectations that weak jobs data would invite rate cuts in September. NFP indeed came in very weak, suggesting recessionary conditions.
ES resistance levels: 6545-6547,6550-6555,6568-6572
ES support levels: 6522-6523,6508-6511,6472-6480
NFP days are tricky. Watch 6522 in the morning, losing it could mean a round-trip move toward sub6500 (prior pivot near 6480). The market can't escape the lifetime resistance line. Incremental higher highs on ES are likely to be sold until we see a 10%–20% pullback.
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