I wrote the following midweek, but the post was quickly banned:

ES, NQ and NDX all printed new ATHs on Tuesday. SPX was only 30 handles away from a fresh ATH before yesterday's dismal five-year Treasury auction unleashed a sharp surge in yields across the curve, with the front end leading and the curve flattening. At one point yesterday, the 10Y–2Y spread was just 20bp from inversion. This is in line with our view that the longer the war drags on, the higher yields go. We first warned about this back in March, when the two-year yield was below 4%.

The rest of my NQ long was stopped out as the retracement extended overnight. I went long following the FOMC press conference last Wednesday, when NQ was trading slightly above 29K. I was very explicit about a fresh ATH in the previous Tactical Positioning. Even if you had only gone long at Sunday's futures open, you would have been up more than 1,000 handles when NDX printed its new ATH.

We have been monitoring SOXX, NVDA and KOSPI for a while, and I reemphasized their importance before the market opened on both Monday and Tuesday. I specifically highlighted their key levels. As the charts below show, their respective resistance levels once again triggered a synchronized pullback, coinciding with the selloff following the five-year auction.

Monday's rally was so fierce that, before Tuesday's open, I had to warn you that such PA had only been seen before the crashes in '29 and '00. And I do think history is going to repeat itself, like it always does. Also note that yesterday's tape was very weak. I tried going long ES but was stopped out at breakeven.

If SPX is to print a new ATH, it will likely be accompanied by NVDA above 230, SOXX above 580 and KOSPI above 7.1K.

Should the war drag on, the 150bp rise in 2y yields and 120bp rise in 10y yields since the war began are just the beginning. The inflation shock has yet to fully work its way through the economy. Food prices have yet to reflect the cost pressures that will inevitably feed through from higher transportation and fertilizer costs. Oil inventories continue to be drawn down at an unsustainable pace, with inventories in many regions already at minimum operating levels.

I expect major swings in the years ahead. There's gonna be a lot of money to be made trading through this mess.

The sequence this week matters more than any single line on a chart. Easing oil and yields gave the market room to rally on Monday, and AI leadership carried ES, NQ and NDX to new highs on Tuesday. Then the midweek surge in yields tested that rally. The indices recovered into Friday, but the recovery did not bring the rest of the market with them. That is the distinction between my tactical call and my macro view. The NQ long captured the move I expected; the remainder was stopped out when the retracement extended. I still expect NDX to extend its highs and SPX to print one of its own. RUT continued to weaken, and DJI keeps underperforming SPX. Businesses outside AI remain more exposed to the war's input-cost and financing pressures. September's flash PMI showed both strong activity and the steepest rise in input costs in nearly four years. The economy can look strong in the headline while the cost shock keeps building underneath it.

This is why I keep coming back to NVDA, SOXX and KOSPI. If the AI complex keeps carrying the indices while RUT and DJI fall further behind, another index high would only sharpen the divergence. My view remains that the rally can run into a major swing high in the coming weeks, followed by sizeable declines in the months after.