Trading Desk

SPX retraced from the ascending resistance line as expected. Friday's PA points to a small chance of a bounce toward the all-time high before the midterm election.

Technical

On the downside, 7.58K is the first support.

For the bounce to materialize, both NDX and NQ1! must break above their descending trendlines. Otherwise, the path of least resistance for U.S. equities remains to the downside.

ES1! resolved the compressing wedge lower. Similar to SPX, there is a small chance of a bounce toward the all-time high before the midterm election.

On the downside, 7.63K is the first support.

Technical:DBA is testing 28.44 resistance. A sustained move above it would open further upside. Another rejection keeps price capped below resistance.

Technical:The 000001 remains below its descending trendline but above 3,800. A sustained break above the trendline opens further upside. Continued rejection puts 3,800 back in play.

Technical:As long as the 399001 remains above its ascending trendline, the path of least resistance remains to the upside.

The cross-asset reaction to Treasury's expanded long-end liquidity-support buybacks was immediate. Long-end yields fell sharply, DXY dumped, USDJPY faded, and XAUUSD, XAGUSD, and B** rallied.
As I have said repeatedly, Trump cares about only four things: 1) equity-market performance; 2) inflation prints; 3) Treasury yields; and 4) approval ratings. Of the four, yields matter most. He has struggled to keep oil contained, and oil staying elevated for longer has continued to push inflation expectations and long-end yields higher. As the US30Y yield reached a new 20-year high, he was forced to have Bessent pull a TACO on long-end yields by expanding Treasury's long-end buyback support.
The move immediately relieved pressure on long-duration assets, but I would not mistake it for a change in the underlying trend. As we have seen repeatedly in USDJPY, temporary policy measures rarely reverse a fundamentally driven move. Reversing the rise in long-end yields would require either normalization through the Strait of Hormuz or a stringent budget. I see little prospect of either.
Gold delivered a decisive break above 4.4K as long-end yields and the dollar fell. The inverse relationship between long-end yields and precious metals remains intact. My concern that yields and precious metals might continue rising in tandem has not materialized, at least for now. Had that regime taken hold, real equity returns would have moved deeeeeep into negative territory. For gold bulls, I would prefer an entry on a pullback toward 4.4K, where the risk is clearly defined against the breakout level. Silver also bounced from our 63 support.
On equities, SPX retraced from the ascending resistance line as expected, while NDX is still wrestling with the descending trendline. Bears need a decisive break below that line before the next leg lower can develop. Otherwise, NQ could again lead a broader equity-market bounce.
BTC1! also responded strongly to the long-bond rally, bouncing from the lower boundary of the ascending channel.

DX1!

MEME needs to break above Monday's high to turn bullish again.

Bears need to see NDX /NQ1! break back below the descending trendline in the coming days. Otherwise, NQ could lead another bounce. Meanwhile VIX has bounced from our 14 support.

As we pointed out in last week's Desk Note and previous Tactical Positioning notes, several key assets were pressing major resistance. If they failed to break through, we were likely at the onset of the next leg lower. We are now starting to see those failures across Korean equities, semis, and U.S. equities.
First came the infamous KOSPI, which reversed lower from 7.1K resistance. SPX spent almost two weeks grinding along its ascending resistance line, while ES1! compressed inside its wedge. That setup has now resolved lower. ES broke below the wedge yesterday and has accelerated to the downside since.
SOXX was rejected again at 561 resistance. Given the overnight action in NQ, it is unlikely to open above that level today. NQ continued to display relative strength through yesterday. Overnight, NQ is finally leading lower. This is the PA bears have been waiting for.
The most interesting move came from long-end yields and gold. US30Y reached its highest level since 2007 yesterday, while US10Y printed a new YTD high overnight. Gold pushed higher alongside both.
As I have mentioned previously, the inverse relationship between long-end yields and gold may be starting to break down. However, despite repeated attempts, gold remains below both its ascending resistance line and horizontal resistance. Until both break, there is no confirmation. Patience is warranted.

DJITechnical

DJI reacted lower from the ascending resistance line. On the downside, 51.6K remains the first major support, followed by 50.2K.

VIXTechnical: VIX is approaching the key 14.2 support. I expect VIX to bottom around this level.

NIFTYTechnical:

As long as 24.34K holds as support, the breakout remains intact and further upside remains open. A sustained move back below 24.34K would weaken the breakout and put the ascending trendline in play. Losing that line would bring 22K-22.1K back into focus.

BZ1! Nothing material changed this week, and my view remains unchanged. The SPR was drawn by another 6.1m barrels, taking the stockpile below 300m barrels to 298.7m and marking the 20th consecutive weekly draw. These releases and repeated negotiation headlines can suppress futures temporarily, but they do not resolve Hormuz or the underlying war. Oil staying elevated for longer -> higher inflation expectations -> higher long-end yields. Unless we get a real Middle East breakthrough, oil should remain volatile inside the broad range.

Technical

Brent and WTI remain inside their broad descending channels. The broader framework remains the 70s on the downside, 100 as the normal upper bound, and 120 if the situation gets out of control. Until the range breaks, the tape remains in sell-high, buy-low mode.

NVDATechnical: NVDA bounced from the ascending trendline and is heading back toward the June high. As long as the trendline holds, the path of least resistance remains higher. A sustained break below it opens more downside.

HG1!Technical

Upside remains capped by the upper boundary of the ascending channel. If the short-term ascending trendline fails to hold, copper risks heading lower.

XAUUSD Gold has continued to struggle at major resistance. Silver, platinum and palladium are also at critical junctures, and I expect all three to follow gold in either direction.

Long-end yields remain elevated. That still does not bode well for gold. The ideal outcome for the bulls would be for gold to break above its major resistance while long-end yields also clear their previous highs. That would be an early sign of a regime change from the usual inverse relationship between long-end yields and precious metals to one where they move in tandem. If that shift holds, gold should begin its next major rally. 

Technical

Gold remains below 4.4K and the ascending resistance line. A sustained break above both puts 4.8K in play. Rejection at 4.4K puts 3.9K-4K back in play.

XAGUSD Silver is trading above its major descending trendline, which is constructive. But silver tends to follow gold, and I doubt it can sustain a rally on its own without confirmation from gold. Platinum has stalled below horizontal resistance, while palladium has already been rejected at its own horizontal resistance.

Technical

Silver is trading above the major descending trendline and 63. As long as both hold, further upside remains in play. A sustained move back below both puts the ascending trendline back in play.

XLFTechnical: XLF remains above the ascending trendline. As long as the trendline holds, the path of least resistance remains to the upside. A sustained break below it puts 56.4 back in play, followed by 52.8 if 56.4 fails.

GDX is showing extreme relative strength against gold. I do not like the two very large gaps. Healthy rallies rarely leave gaps this large, and gold miners front-running gold by this magnitude is concerning.

Technical

As long as price holds above the ascending trendline, 92.44 remains in play. A sustained move above 92.44 would open further upside. A move back below the ascending trendline would put 79.15 back in play, while a sustained break below 79.15 would reopen 70.76.

XOP

Technical

As long as 177.7 holds as support, the breakout remains intact and further upside remains open. A sustained move back below 177.7 would weaken the breakout and put 161.6 back in play, followed by 156.

PLTRTechnical

PLTR has broken above the descending trendline and 155.6 resistance. As long as 155.6 holds, the path of least resistance remains higher. A sustained break back below 155.6 puts 128 back in play.