HTI1! In Tactical Positioning | Week of 06.29, I called the exact bottoms in HSI and HTI. The bounce in Hong Kong equities has started to lose momentum after both indices rallied more than 15% from those lows.
Technical
HTI stalled below 5.14K and has pulled back to 4.74K. As long as 4.74K holds, another move toward 5.14K remains in play. A sustained break below 4.74K puts the broken descending trendline back in play, followed by 4.2K-4.25K if weakness continues.
US02Y Headline inflation cooled this week, but the long end refused to follow the front end lower. US02Y edged lower, while US10Y and US30Y moved higher through a heavy refunding week.
This is the risk I have been warning about. Oil staying elevated for longer -> higher inflation expectations -> higher long-end yields. This is the real constraint for equities. Long-duration names do not need another Fed hike to come under pressure.
Technical
US02Y pulled back from our 4.4% resistance and broke below the short-term ascending trendline. The next support sits around 4%.
MAGSTechnical
MAGS remains capped by the descending trendline. A sustained move above it would open further upside. Continued rejection puts the ascending trendline back in play, while a sustained break below it would reopen the downside.
Z1!Technical: FTSE failed at 10.94K and is pulling back toward the ascending trendline. As long as the trendline holds, another test of 10.94K remains in play. A sustained break below the trendline opens more downside.
US30YTechnical
US30Y remains above 5.2%. As long as 5.2% holds, the upside structure remains intact. A break back below it puts the ascending trendline back in play.
CL1!Technical: WTI is showing a similar structure.
US10YTechnical
US10Y is holding above the multi-year descending trendline. A sustained move back below it would invalidate the breakout and put the lower ascending trendline back in play.
DXYTechnical
DXY remains inside the descending channel and is trading along the lower boundary, just above 99.4 support. As long as 99.4 and the lower boundary hold, a move toward the channel midpoint remains in play, followed by the upper boundary and 101.7. A sustained break below 99.4 and the lower boundary opens further downside.
USDJPY bounced as expected because the latest intervention failed to trigger the self-reinforcing unwind I have been looking for. Bessent understands this dynamic well. Perhaps the trader in him respects my levels too. He knew the market would push back around support and that he could make more money by respecting my levels instead of forcing the unwind.
My core view remains unchanged. MOF and the U.S. Treasury must force a decisive close below 155 support before sustained downside can develop. Otherwise, USDJPY should keep grinding higher until it prints a new cycle high.
Technical
USDJPY has rebounded from 155.55 but remains capped by the broken ascending trendline. A sustained move above the trendline puts 160.8 back in play. Continued failure below the trendline keeps 155.55 exposed. A sustained break below 155.55 opens further downside.
MSFT The double bottom I identified in Tactical Positioning | Week of 04.13 has continued to play out. MSFT has now cleared the level that capped price for months and remains well above it.
Technical
As long as 465.3 holds, further upside remains in play. A sustained break below 465.3 puts 395.1 back in play, followed by 342.1 if 395.1 fails.
601899 The bounce I called from 25 in Tactical Positioning | Week of 06.29 has continued to play out. Zijin Mining has since reclaimed 32.4 and the ascending trendline, and is now pulling back to retest them.
Technical
601899 is testing 32.4 with the ascending trendline just below. As long as both hold, the path of least resistance remains to the upside. A sustained break below 32.4 puts the ascending trendline back in play, followed by 25 if the trendline fails.
SPX continues to grind along the ascending resistance line, while ES1! remains compressed inside a wedge that should resolve soon. NDX continued to show relative strength. That is not the kind of PA bears want to see when ES and SPX are at major resistance.
Technical
For SPX, a sustained break above the ascending resistance line would open further upside. On the downside, 7.58K is the first support.
NDX has broken above the descending trendline and continues to hold above it. As long as the line holds, the short-term upside remains open. A sustained move back below it would invalidate the breakout and put 28.6K back in play.
ES is compressed between ascending resistance and a short-term ascending trendline. The wedge is running out of room. A break above the upper boundary would open further upside, while a break below the lower boundary would put 7.63K back in play, followed by 7.36K.
NQ1! is showing a similar structure.
Technical
PALLADIUM was rejected at 1.4K. A sustained move above it puts the broken ascending trendline back in play, while continued rejection reopens the downside for a retest of the previous low.
Technical
PLATINUM has stalled below 1.8K. A sustained move above it puts the broken ascending trendline back in play, while another rejection puts 1.6K back in play.
Technical
06181.HK failed to hold above the descending trendline and has fallen back below it. Unless price reclaims the trendline, the path of least resistance remains lower.
Technical:000001 held 3.8K and extended the rebound into the mid-3.9K area before the latest pullback. As long as 3.8K holds, the rebound remains intact. A sustained break below it reopens the downside.
Technical:399001 reclaimed the ascending trendline and extended the rebound into the mid-14K area. As long as the trendline holds, the upside remains open. A sustained break below it puts 13.17K back in play.
Technical
EWY remains above 173.6. As long as 173.6 holds, the rebound remains intact. A sustained break back below
KOSPI Since we called the bottom in the Korean market in July, it has rallied roughly 30%.
KOSPI has rebounded from our support and is heading toward 7.1K. A sustained move above 7.1K puts 7.5K back in play, followed by 8.1K. If it fails at 7.1K, we may see a retest of the major ascending trendline around 5.9K.
PLATINUM and PALLADIUM are showing technical setups similar to gold's. If gold clears 4.4K, I expect both metals to follow and break above their respective resistance levels.
PALLADIUM
PLATINUM
There has been little price action over the past few sessions. After last Tuesday's close, I warned against chasing the equity FOMO. Since then, NDX and SPX have gone nowhere. Both are wrestling with key resistance lines that triggered earlier reversals.
Semis remain the hottest part of the market and the key bellwether. Korean equities have continued to extend the rebound we called during the late-July capitulation, with EWY and SOXX following. For now, 7.1K on KOSPI remains the most important level to watch, while SOXX has spent several sessions wrestling with 530.
For this rally to extend, KOSPI first needs to break decisively above 7.1K. That should pull SOXX higher, but SOXX still needs to close above its recent swing high around 560. NDX also needs to post a weekly close above its descending trendline, while SPX needs to clear 7.8K. If all of these happen, the ST setup turns bullish and a fast push toward 8K on SPX comes into play. If semis fail to do the heavy lifting from here, the next leg is likely lower.
XAUUSD bounced from our 3.9K-4K support and is testing the key 4.4K resistance for a fourth consecutive session. To open the door to further upside, we want to see a decisive break backed by clear volume expansion. Meanwhile, the 2Y has slipped below its ST trendline, while the 10Y and 30Y remain below their recent highs.
My Iran framework remains unchanged and this macro backdrop does not favor gold. Oil prices staying elevated for longer -> higher yields -> sustained pressure on gold.
Gold did surge alongside rising yields last week, which was the first sign that the usual relationship may be decoupling. For that tandem move to have any shelf life, gold must clear and hold 4.4K while long-end yields break and hold above their recent highs at roughly the same time.
We remain vigilant around these cross-asset relationships and key levels. Once again, there is no reason to chase any move. The market always gives you another opportunity to enter or re-enter.
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