Faith & Free Markets

Stocks generally traded weak all day Tuesday. S&P 500 futures traded down to 7712.25 at 1 PM and bounced higher into the close to settle 7738.25, down 8.5 points. Overnight has brought a healthy 20+ point range from 7733.75 to 7756.5, all of which occurred during the first hour of European trading. Currently we are trading 7748.50. That level has served as support and resistance a few times over the last week.

Today is the last day of the Quarter. It brings us the Core PCE Price Index and Final GDP at 8:30. Traders will be looking at those numbers for any possible reading of inflation. The Core PCE Price Index will likely carry more weight than normal. It is known as the Fed’s primary inflation measure. CPI drives headlines, but PCE is where the nerds live. Forecast is for a 0.3% M/M increase. Final GDP is for the 2nd quarter. This will be the 3rd and final time we get a read on 2Q economic activity. Consensus estimates are for 1.5% GDP growth annualized. Look for support to come in at 7712.25 and 7677.25. To the upside, look for resistance to be tested at 7774 and 7810.

Gold shook off some of the rust from the previous session and rallied 1.12% on the day to close at $4215. Silver lagged Gold noticeably all day and ended the session up only 12.5 cents to $61.845. Overnight has seen a choppy but generally positive bias. Gold is currently up $10 to $4225. Silver is playing along in sympathy, but it is lacking any real spark. Metals appear to be in repair and recovery mode after the rough day they had on Monday. For the moment Gold looks to be the more constructive of the two. Most notable for Gold’s action on Tuesday was the huge spike and reversal in the US Dollar Index. Gold is typically more sensitive to movements in the Dollar than it showed yesterday. Glimmers of hope? Can we be allowed at least that?

Note futures were a little feisty on the day, trading as high as 104′22½ and as low as 104′05½. They settled 104′17, up 1.5 ticks. Yields aren’t pretty (5.226% currently), but at least traders could catch their breath. Today’s GDP and PCE inflation numbers and NFP on Friday are nearby, so I expect Treasuries will tread some water here waiting for those numbers to be released. Currently trading 104′18.

WTI futures were weak all session and settled down $3.66 at $88.94. Normally a selloff like that would have given a bigger lift to the other markets, but I think everybody knows the real driver is yields. Overnight has been pretty quiet for oil, but bids did come in on the European open to push it higher by about $1. Currently trading $90.50.

This last week of the Quarter has been exhausting and living up to its reputation for being unpleasant. I think everybody would like to close the books on it and move on. Looking forward, there will likely be some residual overhang for the first week or two, but historically by mid-October we should be entering a very bullish phase. Let’s see how today settles and move forward.

Looking forward, there will likely be some residual overhang for the first week or two, but historically by mid-October we should be entering a very bullish phase.

Context I’m watching

• Core PCE and Final GDP at 8:30. Core PCE, the Fed’s primary inflation measure, forecast +0.3% M/M; Final 2Q GDP consensus 1.5% annualized. NFP Friday.
• ES at a pivot. Trading 7748.50, a level that has served as support and resistance a few times this week. Support 7712.25 and 7677.25; resistance 7774 and 7810.
• Metals in repair and recovery mode. Gold up $10 to $4225 and the more constructive of the two; Silver playing along but lacking spark. Gold shrugged off Tuesday’s spike and reversal in the Dollar Index.
• Treasuries catching their breath. Settled 104′17 after a 104′05½–104′22½ day; now 104′18. Yield 5.226%. Expect some water-treading ahead of the numbers.
• WTI: yields are the real driver. Settled down $3.66 at $88.94 without lifting other markets; about $1 higher on the European open at $90.50.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

Overnight the S&P 500 futures have steadied after a pretty rocky day yesterday, driven almost entirely by Rates and Oil. They leaked lower from the Asian open down to 7716 at 1:30 this morning and then caught some bids up to 7754.75 by 3:30 AM. We are currently trading near yesterday’s close at 7744. Yesterday’s gyrations were driven by the interplay between WTI, Rates, the Dollar, and a Trump afternoon presser cloud of worry. Of note, we’re still counting the days since the last time the S&P had a greater than 1% correction on a closing basis. That clock is still ticking and is up to 42 days.

Metals bore the brunt of yesterday’s Rates/Dollar/Oil trifecta. Gold was down over 3.5% and Silver down over 4.5%. There has been some real technical damage done here, with some technical levels and patterns broken. All major moving averages have rolled over and are pointing down. It’s going to take some time to fully assess the situation, especially if one wants to try to find any reason to remain bullish metals. Yesterday’s note mentioned that $4100 was the next technical support level. Gold traded down to $4,143 yesterday and left that level intact. Overnight some weak buying has come in and Gold has pushed back up to $4180. That was the support level that was about to give way at this time yesterday. It is now minor overhead resistance.

5.247% is the current 10-year Treasury yield. It traded as high as 5.27% intraday. This is the market that is driving all others right now. It is being fueled in large part by continued high-priced crude oil. These two do not mix well. After trading as low as 104′08 yesterday, ten-year Treasury futures have steadied off their lows and are currently trading 104′13½. Yesterday certainly had that capitulatory feel. There was much crying out, gnashing of teeth, and rending of garments, but after a few hours of overnight calm, maybe we aren’t there yet.

WTI futures for November traded as high as $96.54 yesterday before falling off to $91.25. After hitting that low, WTI bounced to settle $93.29, and continued that bounce through Asia, up to $94.88. European trading finds WTI pulling back again and showing some signs of weakness, down to $92.55.

Overall, it looks like all of these markets are taking stock of yesterday’s blast of volatility and assessing the situation. Just two more days in the quarter, GDP and NFP to go. What could go wrong? We could get some strange activity as quarter-end positioning kicks into gear, but chances are that the last couple of days this week will be tempered as the market waits for NFP, but that’s just a guess. Anytweet can happen.

Overall, it looks like all of these markets are taking stock of yesterday’s blast of volatility and assessing the situation.

Context I’m watching

• ES steadied overnight. Leaked to 7716 at 1:30 AM, bid back to 7754.75 by 3:30 AM, now near yesterday’s close. 42 days and counting without a 1%+ closing decline.
• Metals: real technical damage. Gold down over 3.5% and Silver over 4.5% yesterday; all major moving averages rolled over. Gold held $4100 (low $4,143) and is back to $4180, now minor overhead resistance.
• The 10-year is driving everything. Yield 5.247% after a 5.27% intraday high, fueled by high-priced crude. Tens steadied off the 104′08 low, now 104′13½.
• WTI whipsaw. $96.54 high to $91.25 low, settled $93.29, bounced to $94.88 in Asia, now back to $92.55.
• Quarter-end week. Two sessions left in the quarter, then GDP and NFP. Possible quarter-end positioning, likely tempered ahead of NFP.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

Here we go. Entering the last few trading sessions of the quarter. S&P 500 futures had a choppy open on Friday with a quick flush down to 7748.5. That reversed quickly at 10:15, and with some fits and starts ended the session at 7803.75, 36.75 points higher. The S&P ended the week higher by 91.25 points, with all-time highs just 44.75 points away at 7848.5.

Asian markets traded weaker with a small amount of chop. ES worked its way down to an overnight low of 7765, just below the weekly point of control of 7772. European markets are steady near those lows early in that session. If we continue lower, look for support at 7769, and then lower look for toeholds at 7748.5, 7722, and 7710. Up the ladder, look for resistance to come into play at 7795, 7811, 7838, and finally 7848.5. There is a lot going on this week. All week we have a continued parade of FOMC speakers, Wednesday brings Final GDP, and Friday the most important NFP since the last NFP and until the next NFP.

Gold ended the week down $103.70 at $4321.2, and it is getting clobbered this morning. It looks like the continued barrage of hits from a strengthening USD, weaker bonds, and higher WTI is too much for it to carry this morning. Gold is down 3.3% to $4179, and Silver is down an eyebrow-raising 5.3% to $61.36.

Gold is currently trading $4181, and meaningful support doesn’t come in until about $4100 if it can’t hold here. Given the trajectory of this push from the Sunday night open until early Europe, it doesn’t look like $4180 stands a chance. Below that we’re looking at $4000 and $3975. This looks and feels capitulatory. Take a look at the trajectory on the chart below. The question becomes how much damage is done. Good time to sit back and watch it play out before trying to make any assessment, but keep in mind that there doesn’t appear to be any real catalyst here except a Trump speech scheduled for 2:00 PM ET. Much conjecture, no facts that I have seen.

WTI futures continue to amaze and entertain during their tour as the market’s favorite circus sideshow, but Treasuries, and by extension the Dollar, hold the secrets to the magic tricks. Look over there, not here.

Ten-year note futures took a scary spill off of the tightrope, but managed to end the week off of lows (104′14½). Is the top in for rates? It’s anybody’s guess, but I have to keep coming back to the fact that Treasuries are at record low bullish sentiment (9%), and yields are at multi-decade extremes (5.228%). All that said, they are 11 ticks lower this morning at 104′16½, just below Friday’s lows of 104′17. Things do not look good here, and maybe that’s just what we need. Like Gold, it’s a good time to sit back and watch for a little bit.

Sideshow star WTI traded in a fairly narrow range on Friday, about $3, and settled $92.41. This morning finds it almost $3 higher at $95.41. $95.50 has shown some resistance previously, but $96.79 will be the real test. It was the peak reached last week before turning sharply lower. Given the trajectory of the move this morning, it looks like those should be easy hurdles on the way back to test $100 in the near term.

Treasuries, and by extension the Dollar, hold the secrets to the magic tricks.

Context I’m watching

• ES: testing the weekly point of control. Overnight low 7765, just below the 7772 weekly POC. Support 7769, then 7748.5, 7722, and 7710; resistance 7795, 7811, 7838, and all-time highs at 7848.5.
• A busy week. FOMC speakers all week, Final GDP Wednesday, NFP Friday, and the last sessions of the quarter.
• Gold and Silver getting clobbered. Gold down 3.3% to $4179, Silver down 5.3% to $61.36. Meaningful support not until about $4100, then $4000 and $3975. Looks and feels capitulatory; the only scheduled catalyst is a Trump speech at 2:00 PM ET.
• Treasuries hold the secrets. Tens 11 ticks lower at 104′16½, just below Friday’s 104′17 lows. Record low bullish sentiment (9%) against multi-decade-high yields (5.228%).
• WTI back on the tightrope. Settled $92.41 Friday, now $95.41. Resistance $95.50, then the real test at last week’s $96.79 peak, with $100 in sight.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

European open finds the S&P 500 futures trading near yesterday’s session high of 7783.5, currently 7778. Yesterday felt like it could be shaping up to be bad news. Dark clouds were overhead in the form of an ominous rates outlook and climbing oil prices. Those clouds largely dissipated by the lunch hour and buyers stepped in to boost equities. S&P futures surged from trough (7730) to peak (7783.5) in about 30 minutes, fell back to VWAP around 7750, and bounced around for the remainder of the session, ending at 7767.

Overnight, Asia tested 7750 and bounced into a choppy climb higher throughout the night. We have durable goods orders news due at 8:30. It’s usually not a big market mover, but neither was PMI supposed to be. In short, we’re looking steady to slightly higher after yesterday’s near death scare. Just about past the September graveyard, and it seems everybody is looking over their shoulders until we’re clear of the quarter. For today, look for both support and resistance right here at yesterday’s high, 7783.5. Overhead, watch 7838 with keen interest. It is the point of control for the week and resides just below all-time highs (7848.5). Support below should come in at 7760, 7748, 7710, and 7675.

Gold and Silver are in a similar state as they were in yesterday. Steadier than they should be given the rates, dollar, and crude oil storms swirling about them. Gold futures are currently up $11.1 to $4309.1, and Silver futures are up $.06 to $64.06. Steady and consolidating near recent lows. Always tough to get a read, but I’ll step back out there and reiterate that on a relative basis these metals are probably hanging in better than would normally be expected. If and when we get back to an all systems go situation, I’d expect them to show some leadership, barbarous relics that they are.

Ten-year futures are treading water at 104′27, with two-year futures trading 101′21. Yesterday was a rollercoaster for bonds. By the time we made it to the NY open they were trading at highs around 105′09. They sold down pretty hard to 104′24½, bounced a bit, and resumed downward to 104′14½ near the end of the session. Overnight and into the European session this morning, ten-year futures have retraced about 50% of yesterday’s range. Translated into a number anybody cares about, the yield is now 5.167% (after peaking at 5.221%). Steady, but tenuous. I don’t give enough attention to two-year rates, but they are currently 4.901%. Only 26.6 basis points separating the two-year from the ten-year yield. People are starting to feel a little edgy about this. Stay tuned for more yield curve talk on a television near you.

Crude oil is printing down about a dollar at the moment at $93.63. This is in the middle of the recent range for the November contract. Yesterday’s high was $96.79, which came after a bounce from lows set Tuesday this week at $88.71. Point of control for the past month sits nearby at $92.15. The minute-to-minute volatility in crude oil is easy for other markets to fixate on. Dialing the timeframe back a couple of degrees, we find ourselves trading right in the middle of the range for the month, roughly $81 to $107, or $26. Half of that is $13, and that gets us to $94! Numbers magic! Steady.

Bitcoin has inched lower and is pulling its consolidation zone down with it, from $86,000 to $85,000. Not much to comment on here, but keeping watch.

In short, we’re looking steady to slightly higher after yesterday’s near death scare.

Context I’m watching

• ES: yesterday’s high is today’s pivot. Support and resistance both at 7783.5. Overhead, the week’s point of control at 7838 sits just below all-time highs (7848.5); support 7760, 7748, 7710, and 7675. Durable goods at 8:30.
• Metals hanging in better than they should. Gold up $11.1 to $4309.1, Silver up $.06 to $64.06, consolidating near recent lows. Expect leadership when we get back to all systems go.
• Treasuries: steady, but tenuous. Tens at 104′27 have retraced about 50% of yesterday’s 105′09 to 104′14½ range; the yield is 5.167% after peaking at 5.221%. Only 26.6 basis points separate the two-year (4.901%) from the ten-year.
• Crude: numbers magic. $93.63, mid-range for November between Tuesday’s $88.71 low and yesterday’s $96.79 high. The month’s point of control is $92.15, and the monthly range of $81 to $107 puts its midpoint at $94.
• BTC: consolidation zone drifting lower. From $86,000 to $85,000. Keeping watch.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

S&P futures were weak all session on Wednesday. They were tipped over the ledge shortly after the NY open by Flash Manufacturing and Services PMIs, which came in hotter than forecast. These are not typically market-moving numbers, but when markets are consolidating and getting wound up looking for some direction, sometimes the smallest spark is all the catalyst they need to break. S&P futures traded all the way down through the first support level noted yesterday and bottomed at 7758. They chopped around the 7765 to 7775 area for most of the afternoon. Any attempt at a rally was capped below VWAP.

Overnight, futures continued trading around 7765.50 until about midnight, when they began trickling lower. We now find ourselves trading 7724.5. 7722 was cited yesterday as an area of possible support. So far we’re holding here, but with crude trading higher and bonds continuing lower there isn’t any real reason for this support to be more than a resting spot. Look to 7686 as the next likely support, with the 7600 to 7587 zone below that. If we can turn this ship around and move higher, look for resistance up at previous highs of 7739, 7765, and 7782.

The Gold and Silver consolidation didn’t resolve to the upside as expected. When yields and the dollar gapped higher, they gapped lower. $4330, cited yesterday as support, finally gave way on the PMI numbers and Gold chopped down to the $4310 area. Weakness continued overnight through Asia and into Europe. Gold is currently trading $4293. At the moment the only positive thing to say is that things don’t look as bad as they probably should look given the move in rates, but I’ll leave it at that for now. There are a few small toeholds between here and $4200, but nothing worth mentioning. Real volume support doesn’t enter the picture until about $4100. Let’s hope we’re not talking about that level tomorrow at this time!

Treasuries are the top story here. The PMI numbers kicked the complex over. Support had been tenuous and everybody was whistling past the 5% yield graveyard, but yesterday’s break was… lifted… removed. Ten-year futures had been trying to trace out some support at the 106 handle, but we now find ourselves trading 104′30. In yield terms we’re at 5.139%. That level hasn’t been seen for about 22 years. Take yesterday’s mention of stabilizing rates and forecasts and toss them. There are no support levels to look to here. All we can hope for is that this is what capitulation looks like. Although, I read a comment from yesterday from a market-savvy person that said the capitulation happens when people stop talking about the capitulation. Ouch! Truth.

Crude traded higher all session on Wednesday, but not with the same energy (sorry) that was driving Yields and Metals. November WTI was up $1.64 to $92.16 and is currently up another $1.60 this morning to $93.76. Nothing to sneeze at, but tame given the developments mentioned in the other markets and well off recent highs.

Our new friend Bitcoin was not immune to developments in the other assets. Sometimes we’re all oil traders and sometimes we’re all rates traders. Yesterday was obviously the latter. BTC futures went from a high of $87,380 down to $84,000 in the course of about 12 hours yesterday, in a pretty relentless fashion. It bounced around the $84k handle for most of the day and has since resumed its push down to $83,000. Next minor levels come in at the big round numbers, with Point of Control for the month at $79,000. Similar to Gold and Crude, the only real glimmer at the moment is a general sense of “it’s not as bad as it could be.” Not the best place to find oneself in the markets, but it’s what we’ve got.

All we can hope for is that this is what capitulation looks like.

Context I’m watching

• Treasuries are the top story. Hot Flash PMIs broke the 106 handle; tens trade 104′30, about 5.139% in yield. No support levels to look to here.
• ES: 7722 is a resting spot, not a floor. Wednesday bottomed at 7758 and overnight trickled to 7724.5. Next support 7686, then the 7600–7587 zone; resistance 7739, 7765, and 7782.
• Gold: $4330 gave way. Trading $4293, with only small toeholds down to $4200. Real volume support doesn’t enter until about $4100.
• Crude higher, but tame. November WTI up $1.64 to $92.16 Wednesday and another $1.60 this morning to $93.76 — still well off recent highs.
• BTC: we’re all rates traders today. A relentless slide from $87,380 to $84,000, now pushing $83,000. Next levels at the big round numbers; the month’s point of control is $79,000.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

S&P 500 futures ended the session Tuesday 7,831.75 (−1.75 points). There was a decent trading range for such a small net difference. The 7,848.50 high printed just after the NY open and the market chopped lower to 7,822.50 by 11:40. Futures then began the roundtrip back up to just off the highs at 7,846.50 at 3:50 PM. In the last few minutes a slew of sell orders sliced about 15 points off in a matter of minutes. Overnight was quiet with hardly a blip in Asia and into Europe. Low 7830 and high of 7842. Tightest overnight in recent memory.

Point of Control for the week is 7838.5 and we have been pegged to it. Look for support 7763 (minor), 7722 and 7688.5. There is only one spot of resistance left at 7848.5. We have formed a double top there and are toying with All Time Highs. The sky is the limit after a push through there. Nasdaq 100 futures are similarly poised for All Time Highs. Russell 2000 and Dow Jones Industrials have some catching up to do to join the party. Seeing the relative weakness of Russell and Dow futures is a reminder that the rally still has a good amount of sector rotation under the surface, and that NDX and SPX are being led by Tech names. Two more cautionary signals to be aware of are VIX, which is trading down around 17.5, and the number of sessions without a 1% decline in the S&P 500, which is up to 38.

Gold and Silver traded weaker most of Tuesday until Gold found some buyers and began inching upwards. Silver lagged behind only to overtake its sibling by the close. Gold closed the session modestly lower at $4376.4 (−7.5) and Silver closed modestly higher at $66.53 (+0.115). Late session buying in the pair carried into Asia, which saw prices climb slowly to $4408 before turning lower. We are currently trading right in the middle of yesterday’s 100 point range at $4355. Look for minor overhead resistance at $4410 and $4440. Support comes in $4330 and $4273. Point of control is $4400. The ranges in Gold and Silver are sleep inducing, but this is the consolidation before the next move. Direction is anybody’s guess, but if rates and oil remain stable it would seem the next breakout should be higher.

Like metals, the Ten year and Two year futures have become rangebound the last couple of sessions. Stable rates are good. They allow for more informed forecasts. The question now is whether this stall and consolidation is building energy for a turn higher (lower yields) or lower. As ineffectual as administration jawboning and Treasury fiddling are, one has to believe they are going to do everything they can to keep a lid on rates from here. They want to keep rates out of the headlines in the runup to the midterms at the very least.

For Crude oil a picture is worth a thousand words. Chart of the day. No fancy indicators or other doodads necessary. I will add that the Energy and Oil Production and Services stocks have done a great job of leading this move lower. They led crude higher late last year before the war, and were showing weakness well ahead of crude prices on this turn lower.

Bitcoin! Holding strong near recent highs of $87,465. Currently consolidating around $86,000. Maybe time for a little breather before the next leg to $100,000.

We have formed a double top there and are toying with All Time Highs. The sky is the limit after a push through there.

Context I’m watching

• ES: one spot of resistance left at 7848.5. A double top there, with All Time Highs in reach. Support 7763 (minor), 7722 and 7688.5. The week’s point of control is 7838.5 and we have been pegged to it.
• The tightest overnight in recent memory. Low 7830, high 7842, hardly a blip in Asia or Europe — after Tuesday’s wide chop and a 15-point slice in the last few minutes.
• Sector rotation under the surface. Nasdaq 100 is poised for All Time Highs too, but Russell 2000 and the Dow have catching up to do. NDX and SPX are being led by Tech names.
• Two cautionary signals. VIX is trading down around 17.5, and the S&P 500 has now gone 38 sessions without a 1% decline.
• Metals: sleep-inducing ranges. Gold closed $4376.4 and Silver $66.53. Resistance $4410 and $4440; support $4330 and $4273; point of control $4400. If rates and oil stay stable, the next breakout should be higher.
• Rates rangebound, and likely by design. Stable rates allow for more informed forecasts — and they will do everything they can to keep rates out of the headlines into the midterms.
• Crude: the chart says it. Energy and Oil Production and Services stocks led this move lower, just as they led crude higher late last year before the war.
• BTC: a breather near the highs. Holding near $87,465 and consolidating around $86,000, before the next leg to $100,000.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

S&P futures put in a rally for the record books Monday (+1.57%). When we left off, ES was trading 7762. A few hours earlier that level marked resistance on a chart of higher degree. It quickly became the support area as the market awaited the NY equity market open. On the attached chart you can see that there was some selling pressure going into 9:30. This was just enough pressure to have traders wondering if overnight promises were about to be broken by New York light of day.

With Crude oil getting smacked lower (−3.86%) and bonds holding steady, big buyers stepped up in force. Next up on the resistance ladder was 7782.50. Buyers sliced through that easily and proceeded to rally without any real pause until reaching the ultimate peak at 7847 at 3:41 PM. 7838.5 was the last projected resistance for the day, and I was amazed we made it there. Interestingly, enough volume transacted around that price to pull the Point of Control for the entire session up to 7836.5.

Overnight, the Asian session opened steady as everybody caught their collective breath at the 85+ point rally that happened earlier. Futures have only been able to get as high as 7839.5 since. Yom Kippur has passed and the sellers have arrived. It looks like we are back to a two-way market today. S&P futures have trailed off steadily, but not too sharply, from 7837 to a low of 7810.50 so far. Crude and bonds are relatively unchanged this morning, so there is no real catalyst for the weakness except a return to reality. Look for support at 7788.50, 7763.50, and 7738.50. Below that and we’re back into the previous week’s levels, 7700 and 7693. Overhead, look for resistance at yesterday’s high of 7847 and then 7905.

As I’ve been writing, buyers have come back in to lift the S&P off its lows and back up to 7833. This is shaping up to be a good, wide-ranging, two-sided market today. Go team price discovery!

Metals and Bonds were both lackluster on Monday. Bonds had a steady bid, while it seemed like all anti-fiat currency demand shifted from the metals to Bitcoin. Gold traded weak all day and ended $4,383.90. Silver likewise was off about 1% and settled $66.415. Ten-year notes settled up 7.5 ticks at 106′01½, and Two-years settled unchanged at 101′28.

Yesterday we showed a chart of the MBTU6 (Micro Bitcoin September future) that showed the rally that was underway in the early morning hours before New York turned on the terminals. That rally continued throughout the day, with BTC up from where we left off at $84,300 all the way up to $87,465 before pulling back on the close to $86,590. That market appears to be entering consolidation mode. It’s trading $86,280, down $310.

This is shaping up to be a good, wide-ranging, two-sided market today. Go team price discovery!

Context I’m watching

• ES: back to a two-way market. After Monday’s +1.57% run to 7847, overnight highs stalled at 7839.5 and London dipped to 7810.50 before buyers lifted it back to 7833. Resistance 7847, then 7905; support 7788.50 ⇒ 7763.50 ⇒ 7738.50, then the previous week’s 7700 and 7693.
• Session point of control pulled up to 7836.5. Enough volume traded near the 7838.5 last projected resistance to drag Monday’s point of control up with it.
• Crude smacked lower, bonds steady. Crude oil fell 3.86% Monday while bonds held a steady bid — the backdrop for the big buyers stepping in.
• Metals lackluster. Gold ended $4,383.90 and Silver settled $66.415, off about 1%, as anti-fiat demand seemed to shift to Bitcoin.
• Treasuries. Tens settled up 7.5 ticks at 106′01½; twos unchanged at 101′28.
• BTC: entering consolidation mode. Up from $84,300 to $87,465 Monday before pulling back on the close; trading $86,280 this morning.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

S&P 500 futures have seen steady buying from Asia and into Europe early this morning. The S&P has passed Friday’s Europe high and is sitting at the next level of overhead resistance (7762).

S&P 500 futures top-ticked Friday’s session at 7739.25 near the European open and proceeded to trade down through the overnight to a low of 7675 at 12:30 ET. From there the buyers came in and kept a slow but constant pressure on the market all the way into the 4 PM NY close (7712.5), then on to the futures close one hour later (7725).

Although ES finished off of early-session highs, the afternoon rally seemed like it had legs to keep on going if given more time. It’s always difficult to read the effect that Triple Witching (futures and options expiration) has on a given day, except that they tend to be high-volume days, with hedges being settled and positions rolled forward.

Looking at the week ahead, it is very light on economic releases, but there are some scattered speeches scheduled for Fed Governors. It should be a technical trader’s market. Levels to watch in the near term for S&P futures: overhead resistance 7739 ⇒ 7763 ⇒ 7782.5 and 7838.5. Support below should come in at 7675 ⇒ 7645 ⇒ 7620 ⇒ 7586.

Metals are very strong on a technical basis, especially given the higher-yield, higher-oil, and strong-USD environment they have been weathering for weeks. Dollar Index futures rallied from 98.30 to 100.28 between 9/9 and 9/18, and Gold and Silver took it in stride. Gold broke the $4300 support briefly on the FOMC number last week but quickly recovered all the way up to $4440, and looks to be gearing up for a run at $4500. It is currently $4400, having eased off of Asia highs around $4440. Also keeping an eye on Silver here to confirm any real breakout in precious metals. When the higher beta of the two catches fire, it can run hard. With Silver currently trading $66.81, look for overhead targets at the bucks: $68, $69, and $70.

Treasury futures, both 10s and 2s, which had been mostly bid Thursday, finally seemed to succumb to higher-rate reality and ended Friday on or near lows. Sentiment is still bleeding lower, with Bulls in the single digits and at extremes. Still wondering who is left on the bull side of the trade aside from Treasury. Sentiment is always a poor timing tool, and it’s definitely proving it with bonds, but it still seems like something has to give here. There just isn’t anything on the charts to latch onto here. Bonds are going to have to find their own way to build some kind of support ledge. As of this writing, 10-year note futures do appear to be finding some support in the 105′21 to 105′24 range. Asia and Europe both find notes off of Friday’s lows and trading up at 106′02½.

With no real developments on the war in Iran, Crude oil futures traded in a “narrow” $3 range on Friday: high $98.02 near the NY open and down to $95.15 near the close. WTI futures are weaker overnight and traded as low as $93.45 before bouncing to the current $94.17.

Bitcoin! Let’s talk about something fun for a change. How about a $6k rally between 8 PM ET on Thursday and 11 AM ET Saturday morning? BTC futures for September started at $76,245 Thursday night, traded steadily higher to $77,500 to catch a breath, and then blasted off from $80,000 Friday morning at 9 AM ET until finally hitting $82,065 14 hours later. That rally has continued unabated in overnight trading. Sunday night saw BTC futures consolidating gains in the $81,000 to $82,000 area before blasting off in London trading. Currently trading $84,300!

As mentioned in previous entries, I have been keeping an eye on BTC as a gauge of Risk On sentiment and appetite. Historically, the last week of September is the weakest for equities, but history hasn’t been the best guide this quarter. This chart of BTC is showing clear signs of Risk On and FOMO. As of this morning, this appears to be panning out. Time will tell, but everything is lined up nicely. Equities, Bonds, and BTC are Green, Crude is Red, and the Metals are Yellow (we prefer “consolidating”).

Equities, Bonds, and BTC are Green, Crude is Red, and the Metals are Yellow (we prefer “consolidating”).

Context I’m watching

• ES: sitting at 7762 resistance. Past Friday’s Europe high after steady buying from Asia into Europe. Overhead 7739 ⇒ 7763 ⇒ 7782.5 and 7838.5; support 7675 ⇒ 7645 ⇒ 7620 ⇒ 7586.
• A technical trader’s week. Very light on economic releases, with scattered Fed Governor speeches — and Friday’s Triple Witching now behind us.
• Gold eyeing $4500; Silver the confirmation. Gold shrugged off a stronger dollar (DX 98.30 to 100.28) and eased from Asia highs near $4440. Silver targets at the bucks: $68, $69, $70.
• Tens: a support ledge at 105′21–105′24? Friday ended on or near lows, but notes are up at 106′02½ in Asia and Europe. Bulls in the single digits.
• Crude: weaker overnight. A $3 range Friday ($98.02 to $95.15), then as low as $93.45 overnight before bouncing to $94.17.
• BTC: Risk On and FOMO. A $6k rally from $76,245 Thursday night, and a London-session breakout from $81,000–$82,000 to $84,300 — against the last week of September’s weak history for equities.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

Equities continued their post-FOMC bounce and spent all session bid and consolidating back above 7700. Early Asia saw S&P futures continue this consolidation until bids finally came back in around 11 PM. Futures are now trading at session highs at 7737. It’s early, but maybe 7720 will act as support. Next overhead resistance is just 30 points higher at 7765. Below, 7700 has built a good volume shelf, with the point of control for the month just below at 7680.

Gold and Silver also breathed a sigh of relief with FOMC in the rearview mirror and some clearer expectations ahead on the rates front. They were strongly bid early in Thursday’s session, with Gold trading $4419.5 and slowly drifting most of the session to $4380. Early Asia traded in a $30 range, with bids coming back around 11 PM last night. Early Europe trading finds Gold trading above Thursday’s high at $4437.

Ten-year Treasury futures also stayed stronger post-FOMC. They climbed steadily all Thursday and traded up to the 106′10 overhead resistance area, which had proven to be resistance all week. Note that yields fell post the Fed Funds rate hike. Keeping watch here to see if we have a repeat of 2004 and 2015. It’s only been a day and a half, so too early to make anything of it.

Note that Crude Oil futures roll monthly and November is now the front month. Crude oil traded in a fairly narrow range most of Thursday. Overnight Friday has remained calm, with prices about $1.75 lower to $95.40 per barrel.

All in all, most markets seem to be trading with a tailwind post-FOMC, and that has carried through to European trading Friday morning. Aside from Industrial Production and Capacity Utilization numbers and a couple of Fed Governors speaking, there isn’t much of interest on the Economic Calendar Friday. Given that, markets will likely latch back onto the WTI Wall of worry. Let’s pray for humble leadership and peace this weekend.

All in all, most markets seem to be trading with a tailwind post-FOMC, and that has carried through to European trading Friday morning.

Context I’m watching

• ES: 7720 support, 7765 resistance. At session highs at 7737 after bids returned around 11 PM. Below, 7700 has built a good volume shelf, with the month’s point of control just under it at 7680.
• Gold: above Thursday’s high. Bid early Thursday to $4419.5, drifted to $4380, held a $30 range in Asia, and trades above that high at $4437 in early Europe. Silver breathed the same sigh of relief.
• Tens: back at 106′10 resistance. Yields fell after the hike — watching for a repeat of 2004 and 2015, but a day and a half is too early to make anything of it.
• Crude: November is now the front month. A narrow range Thursday, and a calm night about $1.75 lower to $95.40 a barrel.
• A light calendar. Industrial Production, Capacity Utilization, and a couple of Fed Governors. With little else on the docket, markets will likely latch back onto the WTI Wall of worry.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

Warsh and Co. raised the benchmark Fed Funds rate by 25 basis points as expected. The market remained largely in suspended animation waiting for Warsh to speak 30 minutes later. S&P 500 futures, after digesting the news for a few minutes, sold off, but not as much as after the previous two announcements (6/17 −1.21% and 7/29 −1.52%). The S&P futures traded as low as 7575 before rebounding back up to 7625.25, and settling at 7622 (−0.44%, or −34 points).

From the US close, through Asia, and now into London, the bids have come back in. The sell-off bumped the point of control line down about 6 points to 7679.75, but we find ourselves right back where we started 24 hours earlier, 7674. Some resolution! Late September is historically a rough patch for equities, but with the Fed cloud lifted maybe we can get back to being constructive. First up would be a settle above 7720. From there, 7765 looks to provide the next level of overhead resistance.

Note on the chart below that although the S&P decisively broke through the bottom edge of the consolidation pattern it has been forming, it has almost as quickly found its way right back to it. All systems go?

Gold managed to take out $4400 ($4413.1), but turned south once the announcement came out and Warsh began to speak. Gold took out Tuesday’s low and traded as low as $4273.3 before rebounding and closing the day just above $4300, back where it started 12 hours earlier. And like any good replay, Gold finds itself right back in the $4355 to $4370 area it was in 24 hours ago. Again, some resolution!

Ten-year futures were at the high of the session at 106′11 when the rate news broke. They traded in pretty straight-line fashion to lows of the session at 105′21. They pretty much flatlined there as the rest of the world moved around them. Overnight they have caught a soft bid and have drifted up to as high as 106′02. Currently trading 106′00. I’ll save the sarcastic resolution remark, but will note that this is pretty much where we found ourselves at this time yesterday.

Sentiment has been so weak here that 10-year rates might just start making their way lower from here. The precedents were set in both 2004 and 2015. Long-end yields fell at the beginning of those hiking cycles. Yield curve, meet pancake.

Nothing gets you thinking about Crude oil futures quite like a Fed rate announcement. Like the other markets though, WTI was near highs of the session around $106.50 at 2:00 PM ET. They sold off in a little more orderly fashion than the others, but did make lows at $101.01 before bids came in to prop them up a bit to $102.77. They eventually settled $102.02. Overnight they’ve traded in about a $2 range, from $102.50 to $100.37. WTI is currently $101.41. Waiting for, don’t make me say it again, resolution.

Lastly, for BTC fans, I have not forgotten. It is on the radar, but it has been quietly lurking and waiting to make another dramatic entrance. After ticking $80,000 a week ago, it has traded in a $5000 range in a very undramatic fashion. Our little BTC seems to be all grown up now and trading more maturely. Still keeping an eye here to gauge risk appetites. Bids have come in slow and steady since the rate announcement. The dust is settling on the new rates landscape and it might be safe for BTC to come back out. Watching.

We find ourselves right back where we started 24 hours earlier, 7674. Some resolution!

Context I’m watching

• ES: 7720 first, then 7765. The hike landed as expected and the sell-off was shallower than the last two announcements — 7575 low, back to 7625.25, settled 7622. A settle above 7720 is the first ask; 7765 is the next overhead resistance.
• The break didn’t hold. Price decisively broke the bottom edge of the consolidation and found its way right back into it almost as quickly. The point of control came down about 6 points to 7679.75.
• Gold: a full round trip. Took out $4400 at $4413.1, reversed on Warsh, took out Tuesday’s low at $4273.3, closed just above $4300 — and sits right back in the $4355 to $4370 area it held 24 hours ago.
• Tens: 106′11 high, 105′21 low, back to 106′00. Sentiment is weak enough that 10-year rates might start working lower from here — long-end yields fell at the start of both the 2004 and 2015 hiking cycles. Yield curve, meet pancake.
• WTI and BTC: still waiting. Crude ran to $106.50 into 2:00 PM, made lows at $101.01, settled $102.02, and trades $101.41 now. Bitcoin has gone quiet in a $5000 range since ticking $80,000 a week ago, with bids slow and steady since the announcement — a read on risk appetite.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

Leading into today’s much anticipated FOMC rate decision, S&P futures are trading 15 points higher at 7672. Range over the last month has been 7825 to 7585.50 basis the December contract. The volume profile, as seen in the chart for ESZ26, shows a tightening range leading up to today’s main event, with the point of control just overhead at 7685.75. This is a classic triangle consolidation and it is looking for some resolution. Hopefully today’s announcement, and more importantly the press conference, brings it.

Warsh is a real wildcard here. Handpicked by Trump, he has to walk a fine line between what the market is telling him (rates higher for longer) and what his boss wants (lowa foreva, damn the consequences, YOLO!).

Although gold has taken some body blows the last week or so, it is grabbing for the ropes at 4300 and has managed to pull itself up through the Asian session and into early Europe to 4370. It looks like it has settled on a lower-degree volume shelf here to wait out today’s session. Depending on what happens in the crazy world of WTI and bonds. Up next.

Ten-year note futures hit a low of 105′21 yesterday and have bounced a bit to 105′28. Markets are on edge with a 5% yield, but let’s hope they don’t grow comfortable with it. No market is more attuned to the Fed’s every utterance than the Treasury market. This is especially true on the short end, where the two-year note futures have been treading water right around the 102 handle (~4.65%). How flat are we going to go on 2s-10s?

WTI, what can we say. No war resolution. No WTI resolution. Crude got as high as 106.75 and as low as 101.2 in the last 24 hours. It’s resting comfortably at 104.3 with its point of control climbing by the day. That point of control is now up to 102.81. Every tick up there creates an area of price acceptance and support and resistance. Right now 102.81 will act as support unless some stupid tweet can break it free. These tweets have almost zero half-life left. We are at the point of put up or shut up. This goes for WTI and bonds. Let’s see what today brings! Pray for humility and peace.

We are at the point of put up or shut up. This goes for WTI and bonds.

Context I’m watching

• ES: a triangle into the announcement. Trading 15 points higher at 7672, with the month’s range 7825 to 7585.50 basis December. The point of control sits just overhead at 7685.75 — a classic consolidation looking for resolution.
• Warsh is the wildcard. The line he has to walk runs between what the market is telling him — rates higher for longer — and what his boss wants. The press conference matters more than the decision.
• Gold: up off the ropes to 4370. Body blows for a week, a grab at 4300, then a pull up through Asia and into early Europe onto a lower-degree volume shelf to wait out the session.
• Treasuries: 105′21 low, bounced to 105′28. On edge at a 5% yield, with the two-year treading water around the 102 handle (~4.65%). The open question is how flat 2s-10s go.
• WTI: point of control climbing to 102.81. A 101.2 to 106.75 range in 24 hours, resting at 104.3. That level acts as support absent another headline — and the tweets have almost zero half-life left.

Reference prices are front-month futures, delayed, for general information only — not investment advice; confirm before acting.

Equities opened Monday deeply in the red, with the biggest losses in the Semi/AI space after talk over the weekend about slowing the pace of progress (investment) in the space. That and the relentless bid in crude oil, which traded as high as 104.95, cast a pall. The New York session opened on its lows but was steadily bid throughout the day as it became apparent that AI investment Armageddon wasn’t imminent, and crude oil eased off of highs after some empty words from Trump about Ukraine and Iran. The S&P futures reached as high as 7719.75 on those developments, which came from one pretty sharp blast from 11:00 AM and into the lunch hour, slowly giving most of that back to settle right around 7700 support. Overnight that support eventually gave way and futures trickled steadily lower to 7644.75. We’re currently trading 7650. Volume profile over the last week shows most of the trading has occurred at the top quarter of a support and resistance band between 7600 and 7700. I’d expect it to remain in this range through the Fed announcement tomorrow afternoon. Even then, the 25-basis-point hike is largely baked in and the market will be waiting for Warsh’s follow-up at 2:30. As always, stay tuned… the market could go higher or lower from there!

Metals did not fare as well as equities Monday. Gold broke support at $4329 and traded as low as $4293. To reiterate, there is really nothing in the way of support for gold to grab onto below here, and gold is putting up a fight to hold $4300. It’s currently $4300 in early London trading.

Ten-year notes bottomed at 105′27 about the same time the S&P bottomed and also rallied alongside for a couple of hours. They eventually stalled and fell back to finish just off lows at 106′00. Like the S&P and gold, they have continued trickling lower overnight and made a new low at 105′21 (5.03%). Hopefully the administration realizes that tricks are for magic shows (they don’t), and that the problem is printing and spending. If you read The Creature from Jekyll Island you’ll discover this is pretty much all by design. Wars of every kind keep the perpetual money machine going until it breaks. (French Revolution, American Revolution, Civil War, Bolshevik Revolution — all bankers’ wars.) It’s anybody’s guess how long the current US iteration will last, but it can’t go forever like this.

The story in crude oil continues to be the same. It traded as high as $104.95 before chopping lower in a range between $100.50 and $102. Overnight has seen the bid in WTI futures remain, and they’re currently at highs of the session at $104. Looking at the one-week volume profile, the point of control is $102.80. That tells us most of the transacting has occurred at these higher levels. Above the point of control, it acts as support; below it, it acts as overhead resistance. Not much to do but sit and watch as WTI reaches back to test yesterday’s high. (Oil services continued trading lower all session. One or the other of these has to eventually give way. We hope for WTI to snap down to the stocks here, but who knows anymore.)

The rubber band analogy between yields and oil continues to be apt here. They continue to stretch. The snapping of bond prices lower on CPI was not the snap we were looking for! Ideally, these both revert back the other way. Just like the Employment Situation, PPI, CPI, and now FOMC, maybe this next thing will be the catalyst to turn everything back around. In the bigger picture it’s not likely. Pray for some adults to end the endless warring and restore fiscal sanity. I mean that.

Pray for some adults to end the endless warring and restore fiscal sanity. I mean that.

Context I’m watching

• ES: 7600–7700 through the Fed. Monday’s 11:00 AM blast reached 7719.75 before settling right around 7700 support, which gave way overnight to 7644.75. The one-week volume profile sits in the top quarter of the band. The 25-basis-point hike is largely baked in — the market waits for Warsh’s follow-up at 2:30 Wednesday.
• Gold: fighting to hold $4300. Broke support at $4329 and traded as low as $4293. Really nothing in the way of support below here.
• Ten-years: new low at 105′21 (5.03%). Bottomed at 105′27 alongside the S&P, rallied for a couple of hours, finished just off lows at 106′00, then trickled lower overnight. The problem is printing and spending.
• Crude: point of control at $102.80. High of $104.95, chop between $100.50 and $102, and back at session highs of $104 overnight. Above the point of control is support, below is resistance — watching for a test of yesterday’s high while oil services keep trading lower. One or the other has to give.
• Yields and oil: the rubber band. Both still stretching; the CPI snap in bonds went the wrong way. After the Employment Situation, PPI, and CPI, FOMC is the next candidate catalyst — though in the bigger picture, not likely.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

Note: S&P futures rolled to reference December as of this morning. Equities are down about 1% this morning on the relentless bid in crude oil.

The S&P 500 futures were generally higher on Friday, with a small spike lower on the release of CPI. That number came in a little hotter than expectations on monthly core (+0.3 vs. +0.2 est.). That was all the confirmation the market needed to price in a rate hike at Wednesday’s FOMC announcement. The market had largely built these rate expectations in during the choppy week leading up to the number, so once the dust settled and Armageddon was off, stocks were free to go bid. Almost all of the day’s range took place around the number, with the spike low at 7620.25 and a subsequent high at 9:00 AM of 7683.25. Futures traded in a tightening range through the session, forming a pennant and settling at 7661, 60 points higher on the day. Support and resistance remain largely bound in the 7600 to 7700 range for now. I’d expect that we’ll stay largely in that range until FOMC, but oil and bonds will be major contributing factors.

Gold traced out a similar but weaker pattern than the S&P Friday, and it continued weakening overnight. Gold is now trading $4325 and on session lows since London opened. Overhead resistance is $4445, and support below is being challenged at this moment. If this leg down doesn’t find its footing in the next hour or so, there’s nothing else to grab on to until $4200, and $4000 below that. We’re going to have to start making stuff up to not declare this uptrend from July broken.

Ten-year Treasury futures snapped lower on the CPI print but quickly recovered. Range on the number was 105′29 to 106′19. Expectations for a rate hike later this week were pretty well baked in, and CPI was just the confirmation Treasuries were looking for. So even though notes drifted lower through the session, it was pretty orderly. Two-year futures also spiked and drifted lower through the day and have settled into a comfortable 3-tick range ahead of FOMC. Bigger picture, yields continue to be stretched and bullish sentiment is at 9%. Honestly, who is left to sell? (OK, don’t answer that truthfully.)

S&P futures continue to trade almost tick for tick with WTI futures right now, and it’s getting tiresome. But it’s what we have to contend with at the moment. Crude is up $2.75 overnight, near highs and trading in a range of $102 to $104 depending on news flow out of the Middle East. As WTI hangs in suspended animation up here, it’s instructive to keep an eye on stocks and ETFs of oil producers and related services. They continue to be relatively weak. They could play catch-up, but I think it’s more likely crude prices catch down to the stocks. Once that tension breaks we should see a cascade lower.

They could play catch-up, but I think it’s more likely crude prices catch down to the stocks. Once that tension breaks we should see a cascade lower.

Context I’m watching

• ES: bound between 7600 and 7700 until FOMC. Almost all of Friday’s range came around CPI — spike low 7620.25, high 7683.25 at 9:00 AM — before a tightening pennant settled at 7661, 60 points higher. Oil and bonds will be major contributing factors.
• Gold: support being challenged. A weaker pattern than the S&P Friday, and on session lows since London opened. Overhead resistance is $4445; if this leg down doesn’t find its footing, there’s nothing to grab on to until $4200, and $4000 below that — with the uptrend from July on the line.
• Treasuries: CPI was the confirmation. Ten-year futures ranged 105′29 to 106′19 on the number, then drifted lower in orderly fashion; two-years settled into a comfortable 3-tick range ahead of FOMC. Yields stretched, bullish sentiment at 9%.
• Crude: suspended animation at $102–$104. Up $2.75 overnight on Middle East news flow, with the S&P trading almost tick for tick. Oil producers and services remain relatively weak — more likely crude catches down to the stocks, and a cascade lower once that tension breaks.
• FOMC on Wednesday. Monthly core CPI at +0.3 vs. +0.2 est. was all the confirmation needed to price in a rate hike.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

Much-anticipated PPI came out just 0.1% higher than expectations on the core number, but that was enough to finally make the bonds break decisively. This on top of surging crude sent stocks lower for the session. 7600 is now last week’s 7700 for the S&P futures. They traded tightly around 7600 for most of the session and have built up a volume shelf there. The next volume shelf lower for meaningful support remains 7450, with 7000 below that. Let’s focus on surviving the trip to 7450 first. Easing WTI has helped lift equities in Europe this morning. Major averages are up about 0.5%.

Gold and silver futures were smacked on the upturn in yields, with silver taking the brunt of that damage. Typical for the higher-beta metal of the two. Gold still remains in an uptrend and constructive as long as it can hold $4321.4. Below that there’s nothing to grab on to for support until $4200. Metals are little changed going into London trade this morning.

Ten-year Treasury futures finally snapped any bit of support they were hanging on to. They are plunging to near lows last seen in October 2023. Currently ten-year futures are 106′12, and those 2023 lows are only about 1 point lower at 105′12½. The WTI–10-year rubber band continues to stretch, and it seems like something will snap soon. Time for contrarians to circle the wagons? Early European trading finds bonds steady near their lows ahead of CPI.

All eyes were again focused on WTI futures as they moved higher, sometimes maniacally surging. The S&P traded tick for tick at some points of the day. Notably, oil services and similar ETFs were actually lower on the day. These funds led WTI higher last winter (well before the Iran war) and seem to be sending the opposite signal now. Definitely something to watch. As of the European session WTI has eased back to 101 and taken some of the pressure off of equities.

Today brings CPI. A hot read here all but guarantees a Fed rate hike at the meeting on September 16. Warsh will have all the inflation cover he needs to do his work. These events seem to be a foregone conclusion, but if CPI comes in lighter than estimates of 0.3% core, we could see one heck of a rally in just about all things. Stay tuned!

These events seem to be a foregone conclusion, but if CPI comes in lighter than estimates of 0.3% core, we could see one heck of a rally in just about all things.

Context I’m watching

• ES: 7600 is now last week’s 7700. A tight session around 7600 built a volume shelf there after PPI and surging crude pushed stocks lower. The next shelf for meaningful support is 7450, with 7000 below that — surviving the trip to 7450 comes first.
• Gold: constructive above $4321.4. Smacked alongside silver on the upturn in yields, with silver, the higher-beta metal, taking the brunt. Gold’s uptrend holds as long as $4321.4 does; below that, nothing to grab on to until $4200.
• Treasuries: support finally snapped. Core PPI just 0.1% over expectations was enough to break bonds decisively. Ten-year futures at 106′12 are plunging to near the October 2023 lows, only about 1 point lower at 105′12½. Early European trading finds them steady near their lows ahead of CPI.
• Crude: the other end of the rubber band. WTI surging, at times maniacally, with the S&P trading tick for tick. Oil services and similar ETFs were lower on the day — the funds that led WTI higher last winter, now sending the opposite signal. Eased back to 101 in the European session.
• CPI today, the Fed on September 16. A hot read all but guarantees a rate hike and gives Warsh all the inflation cover he needs. Lighter than the 0.3% core estimate, and it could be one heck of a rally in just about all things.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

The S&P legged lower to 7650 shortly after yesterday’s note, then proceeded to trade in a very narrow range for the rest of the day, largely bounded by 7655 and 7642. Session low was 7628.75, and 7700 overhead was a distant memory. Higher WTI was the wet blanket that snuffed out any attempted rally. This market is looking to the inflation numbers later to pull it out into some fresh air. Asian session trading finds the S&P modestly higher, up 16 points to 7660. Low to high since yesterday’s close is 7643.5 to 7666.5. The monthly and weekly points of control are just above and continue to act as overhead resistance. If the S&P breaks lower the next major support doesn’t come in until 7450. We’ve got 200 points of Wile E. Coyote-type space between here and there.

Gold futures have spent the last nine days tracing out a picture-perfect triangle pattern on the chart. Starting from a low on 9/1 of 4329.3 to a high on 9/3 of 4553.7 to the current 4438. That formation is just the tip of a triangle of larger degree. That’s consolidation waiting for resolution. All of the real trading volume of the last month has concentrated right around this 4450 level. I’m weak on analogies, but it’s a spring and it’s being wound, tightly. The numbers today and tomorrow should lead to some resolution one way or the other, but until then we’re likely rangebound here.

Treasuries continue to trade on lows. Ten-year futures are down 3 ticks overnight to 106′31. It’s been a slow motion freefall going back to late June. Positioning and sentiment are so extreme here it seems like they can’t get worse. Note to Bessent: Bonds win… every time.

All eyes fixed on WTI. Currently drawing the mirror image of bonds. $95 seemed stretched, but crude traded as high as $97.83 overnight. It has been almost a perfect 45-degree stair step up from $79.96 in late August to where we are now. Moving averages are being left in the dust. With positioning and sentiment in bonds and crude being stretched to opposite extremes they seem overdue for a snapback. Maybe the inflation numbers today and tomorrow will provide some respite, but the truth of the matter is that true resolution will require humble adults to cast their egos aside and do the right things.

We need sanity restored in spending and diplomacy. Seems like winding down a senseless war in Iran would be a good first step in that direction. Pray. It’s what we’ve got.

With positioning and sentiment in bonds and crude being stretched to opposite extremes they seem overdue for a snapback.

Context I’m watching

• ES: a narrow day under the points of control. Bounded by 7655 and 7642 after the leg down to 7650, with a 7628.75 session low and 7700 a distant memory. Monthly and weekly points of control sit just above as resistance; below, the next major support is 7450 — 200 points of Wile E. Coyote-type space.
• Gold: a spring being wound tightly. Nine days tracing a picture-perfect triangle — 4329.3 on 9/1, 4553.7 on 9/3, 4438 now — and that’s just the tip of a triangle of larger degree. A month of real volume has concentrated around 4450. Rangebound until the numbers force resolution.
• Treasuries: slow motion freefall since late June. Ten-year futures down 3 ticks overnight to 106′31, still trading on the lows. Positioning and sentiment so extreme it seems like they can’t get worse.
• Crude: the mirror image of bonds. As high as $97.83 overnight, an almost perfect 45-degree stair step from $79.96 in late August, moving averages left in the dust. $95 already seemed stretched.
• The numbers, today and tomorrow. Both the S&P and gold are waiting on them for resolution — and maybe some respite for bonds and crude at their opposite extremes.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

S&P futures traded lower yesterday, down from a high of 7715.25 to 7672.25 after news of escalating tensions in Iran. The futures caught a little bounce late to end 7680. Asian hours found the S&P testing day session lows early, followed by a steady grind higher to 7691.5 near the European open. They spent most of Tuesday clinging for life at 7700, but now that support appears to have become overhead resistance. Barring any positive developments in the Middle East it will take some effort to work off the volume overhang that has accumulated there. The monthly point of control (POC) sits at 7691.5 and the weekly POC is 7680. What’s it mean? A whole lot of trading has taken place in the 7680 to 7700 area for the last month, and the volume profile shows that clearly.

Gold futures spent most of Tuesday’s session in a range between 4458 and 4435. They also trailed off in the afternoon on war news and settled just off session lows at 4400. Similar to the S&P futures, lows were tested early in the Asian session, down to 4385, but by the time they were in full swing buyers came in to push prices back up to 4456.4. They’ve since settled back to 4445, which is the weekly point of control and just $5 off the monthly POC.

Treasuries ended the day little changed. The 10-year is now sitting a half tick off the 107′08 low from 9/2 — the level it was three ticks above yesterday. There used to be a time that war news would put a safe haven bid under bonds, but they seem more concerned about the upcoming inflation data (PPI on Thursday and CPI on Friday). Estimates look to be 0.3% core PPI and 0.2% core CPI. Throw in the inputs that matter and we’re seeing 0.4% for both.

BTC traded in a very tight $1,500 range and ended Tuesday’s session around $78,600. Asian hours were steady around this level but with an upward bias. BTC futures are currently trading $79,965. Not reading a lot into BTC, but noting that it does appear to be consolidating, momentum has been positive, and it might be an indication of which way risk appetite is skewed.

Understandably, focus shifted to crude oil on Tuesday when war news sent the price of front-month WTI futures up about $3 from session lows at $91.75 to session highs at $94.75. That market is looking pretty stretched and tired up at this $95 area, and producers seem to be flagging after a very strong run. Contrary to the news, it feels like oil will look for any excuse to correct and let out some steam, even if its path is ultimately higher. Crude is currently holding gains right here at $95.

Barring any positive developments in the Middle East it will take some effort to work off the volume overhang that has accumulated there.

Context I’m watching

• ES: a month stacked in 7680–7700. The monthly point of control at 7691.5, the weekly at 7680 — Tuesday’s cling-for-life support at 7700 is now overhead resistance, and the volume profile shows exactly why.
• Gold: back at the weekly POC. Tuesday’s 4458–4435 range gave way to a 4400 settle, then a 4385 Asian low before buyers pushed it to 4456.4. Now 4445 — the weekly point of control, $5 off the monthly.
• Treasuries: sitting on the 9/2 low. The 10-year a half tick off 107′08, the level it was three ticks above yesterday. War news used to put a bid under bonds; this time they’re watching PPI Thursday and CPI Friday — 0.3% core PPI and 0.2% core CPI estimated, 0.4% for both with the inputs that matter.
• Crude: stretched at $95. Up about $3 Tuesday from $91.75 to $94.75 on war news, and looking tired up here. Contrary to the news, it feels like oil will take any excuse to let out some steam — even if the path is ultimately higher.
• Bitcoin: consolidating, momentum positive. A very tight $1,500 range into a $78,600 close, now near $79,965 — worth noting as an indication of which way risk appetite is skewed.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

S&P futures drifting lower from the local high of 7728.5 around midnight. Currently trading down 30 points to 7691.75 and coming right into weekly support at 7687.5 (the weekly point of control (POC) and consolidation area on 9/2). Bias for the moment is negative to listless. 9:00 AM brings the much anticipated Manheim Used Vehicle Value Index release. Arguably a more accurate read on inflation than the tortured PPI and CPI later this week. With stocks being closed yesterday it’s hard to get a read on what’s moving underneath, but it does look like semis, AI, and software are looking squishy in overnight trade. Back to the S&P futures: 7683 down to 7647 is an area of low participation over the last week. If the 7647 volume shelf can’t hold, the next area of support is 7618.5, which marks the low for the last month of trading and is the value area low (VAL) of the entire monthly range going back to August 9.

Gold futures are losing the battle to hang onto the 4450 point of control, trading 4437.5 overnight. A case can still be made for consolidation in this area if gold can hold the 4360 to 4330 support area marked by the low of 4329.3 set 9/1. Upside targets don’t seem to be on the docket for today, but 4500 and 4550 to the upside would give the bull thesis fresh life.

Ten-year note futures continue to scrape along the lows, currently trading 107′11, just 3 ticks off the 107′08 lows of 9/2. Slow-motion car crash in the making? Doubtful, but maybe Manheim holds the inflationary car keys. Likely not, and everybody will continue to wait on the Official cost of everything (except the food and energy we actually consume) later in the week for some kind of resolution to the stalemate.

BTC continues to tread water in the 78k to 80k area, currently trading 78.5k. After the recent run-up it could be a barometer of risk-on/risk-off behavior, so I’m keeping tabs for now.

Crude oil is up almost $3 this morning and looking to temper much of anything. Don’t worry, Headline CPI is ex-Food and Energy. Algos don’t eat or drive! But truly, let’s pray for a peaceful resolution to the problems in the Middle East. Pray that the folks in charge can find some humility and bring the temperature down.

Bias for the moment is negative to listless.

Context I’m watching

• ES: the ladder below. Right into weekly support at the 7687.5 point of control; 7683 down to 7647 is a week’s worth of low participation. If the 7647 shelf can’t hold, next is 7618.5 — the month’s low and the value area low of the whole range back to August 9.
• Gold: 4450 slipping. Trading 4437.5 overnight; the consolidation case holds while the 4360–4330 area does, marked by the 4329.3 low from 9/1. Nothing on the upside docket today, but 4500 and 4550 would give the bull thesis fresh life.
• Treasuries scraping the lows. The 10-year at 107′11, three ticks off the 107′08 low from 9/2 — a stalemate waiting on the week’s inflation prints.
• Two reads on inflation. Manheim at 9:00 AM, arguably the more accurate one; the tortured PPI and CPI later in the week for the Official cost of everything — except the food and energy we actually consume.
• Bitcoin as risk barometer. Treading water between 78k and 80k, currently 78.5k; after the recent run-up it’s worth keeping tabs on for risk-on/risk-off.
• Crude, and a prayer. Oil up almost $3 this morning on the Middle East — and a prayer that the folks in charge find some humility and bring the temperature down.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

Sunday overnight into early Monday morning, markets are little changed with the US Labor Day holiday. Gold is off a little, tech is bid, and oil is quiet.

S&P futures held the line overnight Thursday into Friday morning at Thursday’s 7757.25 point of control (POC) going into NFP. To be expected. The number’s release marked the high for Friday, 7763.25. Volatility in equities was relatively subdued given the strong numbers and prior revisions. A fairly symmetrical ABCD push down to session lows at 7710.25 by 11:30. There was a nice push up from there to 7735 by 1 PM and into all sorts of good technical resistance — the 50% Fib retrace, VWAP, and a low-volume node. It sold off steadily from there to end just off the lows. Of particular note, the semis: they were exceptionally strong all day long. Solid outperformance in the Nasdaq 100 on a relative basis.

The VIX is on the radar here too. VIX futures are hitting lows with extremely crowded short positioning. This spring could be getting ready to let go just in time for the more typical September rough patch — historically the weakest month for the S&P going back to 1950.

Gold futures also held near Thursday’s POC going into NFP, and that release also marked the high for the session at 4524. It quickly made its low print around 9:00 at 4412.1 and staged a V-shaped recovery all the way back to 4496.2. It couldn’t quite tick 4500 and settled comfortably back a little to VWAP at 4482, then traded in a slow 20-point range for the remainder of the session, ending at 4477.2. The rally out of the late-summer consolidation is still comfortably intact, with the late-August downdraft looking like just that. Reclaiming 4500 will be good both technically and psychologically for the bull case.

ES and gold are looking for Treasuries to show their cards here to make the next definitive move. The strong NFP naturally knocked the 10-year for a loop, but not as much as markets needed for them to make a decision. Yields are already stretched, and sentiment and positioning so low as to warrant a Barron’s cover story this weekend. In that respect the number was disappointing. All in all, about a 4-tick move to 107′16 when the day was over. The 2s took the brunt and spiked through recent lows enough to run stops, but settled above them.

Bitcoin has been fun to watch. 77,000 to 82,000 on Thursday. Back to 78,800 on Friday. It ended Friday’s session at 80,000. The spring has sprung to the upside here, but it probably is due for some consolidation. Gotta put that jack back in the box and wind it back up.

Wall Street did what it does best on Friday — disappoint expectations. (Give some due to the holiday for tamping volatility.) Chatter abounds about the increase in probabilities the Fed will hike. (Gotta have something to fixate on. CPI and PPI are this week’s targets.) Honestly, we’re going into mid-terms of the most important election ever, since the last most important election ever. This time it’s for real though. If the Fed just has to get this quarter point done, they might as well do it now so it passes the two-day collective attention span. See that game last night? Beef’s expensive, another quarter point should do it. Puhlease. Don’t even.

ES and gold are looking for Treasuries to show their cards here to make the next definitive move.

Context I’m watching

• VIX: the crowded spring. Futures hitting lows with extremely crowded short positioning — a spring that could let go just in time for the typical September rough patch, historically the S&P’s weakest month going back to 1950.
• Gold: 4500 is the prize. The V-shaped recovery off 4412.1 ended the week at 4477.2; the rally out of the late-summer consolidation is intact, and reclaiming 4500 is good both technically and psychologically for the bull case.
• Treasuries hold the cards. A strong NFP moved the 10-year only about 4 ticks to 107′16 — disappointing against sentiment washed out enough to make the Barron’s cover; the 2s ran the stops and settled back above the lows.
• Bitcoin: rewind the jack-in-the-box. 77,000 to 82,000 and back to 80,000 — the spring has sprung, and some consolidation is probably due.
• This week’s fixations. CPI and PPI, amid chatter of rising odds the Fed hikes.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

Strong rally in GC yesterday. It traded as high as 4558.6 by 11:30 before easing off the throttle for the rest of the session, trading down as low as 4506.1 on the London open. It has rallied back about halfway to the highs and is now trading 4531. Catalysts for yesterday’s strength were stabilizing crude and bonds and some Trump comments. I’d expect gold to continue consolidating between yesterday’s highs and this morning’s lows until the BLS releases the nonfarm payrolls (NFP) data for August. Most important release since the last one. If gold can hold here for a bit, it will make a strong case for a continued rally out of the recent consolidation in a stair-step fashion.

ES was particularly strong and driven by the same catalysts as gold. The weekly point of control (POC) is at 7685, and ES is comfortably above that at 7758, building a new volume shelf as it consolidates in a tight range ahead of the NFP data. Notably weak again yesterday were the semis, which were lower on the day in the face of strength everywhere else.

MBT broke out of its recent coil to the upside in massive fashion. It climbed all the way past 82,000, some 4,000 points above the previously mentioned range. It has since eased just a touch but is still trading comfortably at 81,000 and treading water ahead of NFP like everything else.

Not to be left out, Treasuries — notably the 10-year — were up about half a point yesterday and are also consolidating their gains ahead of the number. These markets are all intertwined, and all of them ultimately hinge on rates, which for the moment are anchored to inflation expectations. Today’s NFP will give some indication here, if only for a few hours ahead of the holiday weekend.

These markets are all intertwined, and all of them ultimately hinge on rates, which for the moment are anchored to inflation expectations.

Context I’m watching

• Gold: the stair-step case. Rallied to 4558.6, eased to 4506.1 on the London open, now 4531 — consolidating between those bounds until payrolls. Holding here makes a strong case for the next stair-step higher.
• ES: a new shelf above the POC. Comfortably above the 7685 weekly point of control at 7758, building a fresh volume shelf in a tight pre-NFP range. Semis notably weak against strength everywhere else — again.
• Bitcoin: coil released. The breakout came in massive fashion — past 82,000, some 4,000 points above the old range — now treading water at 81,000 like everything else.
• Rates anchor it all. The 10-year up about half a point and consolidating; today’s payrolls give some indication on the rate picture — if only for a few hours ahead of the holiday weekend.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

GC nice rebound off of recent lows. Steadying. Low 4329.3 on 9/1 and back up through the 4450 point of control (POC) to 4488.9. Currently 4484, up 69+ points on the session. Metals traded with a bid all day, aided by some dovish remarks by Fed Governor Williams and Treasury Secretary Bessent. The rally appears to be back on track, but still around 275 points to get back to the 4755 high set a couple weeks ago.

ES has a similar shape to gold. Good bids yesterday across everything except semis. The market bottomed 7618.5 yesterday and rallied strongly after the Fed-led two-barrel blast of dovish words. Consolidating those gains nicely in the 7669 to 7692 range. Currently 7680.5. There are a handful of earnings left this season, but I’d expect volatility to be tame as it awaits Friday’s payroll numbers. Undoubtedly the most important set of payroll numbers since last month and until next month.

BTC continues to consolidate gains and has found a new level around 78,000 to mark time. For what, I don’t know, but all indications are for higher. The longer it coils, the stronger the release when it does finally go.

Treasuries little changed to slightly bid. A strong move there changes all the narratives. All eyes are there — and war. Oil is persistently above 90 for now.

Undoubtedly the most important set of payroll numbers since last month and until next month.

Context I’m watching

• Gold: back through the POC. From the 4329.3 low on 9/1 up through the 4450 point of control to 4488.9, helped by dovish remarks from Williams and Bessent. Rally back on track, with about 275 points to the 4755 high.
• ES: consolidating the blast. Bottomed 7618.5 — right in the support zone — then rallied on the two-barrel dovish blast; now digesting in the 7669–7692 range ahead of Friday’s payrolls.
• BTC: coiled at 78,000. Marking time with all indications for higher — the longer it coils, the stronger the release.
• Treasuries, war, and oil. Little changed to slightly bid, but a strong move there changes all the narratives; oil persistently above 90 for now.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

GC is currently trading 4372. The 1-year point of control (POC) is 4030, the 1-month POC 4450, the 1-week POC 4650. The trend has now flipped negative after a solid week of getting clubbed. Even the smaller POCs are mostly overhead now, with the next support shelf coming in around 4200. The narrative has gone from full-on bullish to cautiously neutral to bearish in the span of 10 trading days. The only positive being that things couldn’t look much more negative. War, oil, and rates continue to dance around each other. Add in stocks pulling back from all-time highs while entering a historically volatile month, and things look pretty bleak. Staying on defense seems to be the best play for the time being. Patience for good opportunities is more important, because mistakes will not be washed over by a rising tide.

ES is coming right into a decent support zone in the 7600 to 7630 area. Perhaps it can chop around here for a few days to gather energy for its next move. History suggests that move will be lower as we reach the month’s back half. We are coming into trendline support at 7600 (this comes off the low set at the end of March), but below that we’re looking at a low-volume node all the way until we find a major POC at 6873.

BTC is continuing to be the relative strength winner. It is still holding onto the gains grabbed after bolting from the 65,000 consolidation area. Currently trading 77,300. The bottom of the recent range of the last 10 days is 76,000, with no volume support until all the way back down at the previously mentioned 65,000.

Patience for good opportunities is more important, because mistakes will not be washed over by a rising tide.

Context I’m watching

• Gold: trend flipped negative. From full-on bullish to bearish in 10 trading days after a week of getting clubbed. The POC ladder is mostly overhead — 4650 on the week, 4450 on the month, 4030 on the year — with the next support shelf around 4200.
• ES: into the support zone. The 7600–7630 area, with trendline support off the late-March low at 7600. Below that it’s a low-volume node all the way to the major POC at 6873. History suggests the next move is lower into the month’s back half.
• BTC: relative strength winner. Still holding the gains from the 65,000 breakout, trading 77,300; the 10-day range floor is 76,000, with no volume support beneath until 65,000.
• Defense over offense. War, oil, and rates dancing around each other in a historically volatile month — patience for good opportunities, because there’s no rising tide to wash over mistakes.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.

Walked into a little bit of a sell-off at 4 AM. Markets look like they were steady through Asia, but the tone changed around 3:30, with GC, ES, and BTC all trading lower. GC stepped down to 4438 from 4500. ES down from 7705 to 7673.5. MBT down from 79,540 to 78,570. BTC is the strongest of the three at the moment.

GC, ES, BTC, and Treasuries have continued ticking lower over the last hour, making new session lows. ES 7647.75, GC 4414.8, BTC 78,165 (still strongest relative). September is traditionally a weak and volatile month, and it looks to be staying true to form. Time to get the popcorn and watch setups do their thing. No use fighting the tape here.

September is traditionally a weak and volatile month, and it looks to be staying true to form.

Context I’m watching

• The 3:30 turn. Steady through Asia, then the tone changed: GC stepped from 4500 down to 4438, ES from 7705 to 7673.5, MBT from 79,540 to 78,570.
• New session lows into 5:30. ES 7647.75, GC 4414.8, BTC 78,165 — BTC still the strongest of the three on a relative basis, with Treasuries ticking lower too.
• September, true to form. Traditionally weak and volatile — watch the setups do their thing and don’t fight the tape.

Reference prices are front-month futures, ~15-min delayed, for general information only — not investment advice; confirm before acting.