“When you have a position, you put it on for a reason, and you’ve got to keep it until the reason no longer exists. Don’t take profits just for the sake of taking profits.”
Richard Dennis
EQUITY MARKETS – INDICES
Last phase of low volume summer trading is here, and markets keep pushing higher on low volatility, even the Nasdaq started to catch up.
We had soft CPI print, at least as they measure it, and then weaker jobs, both pushing the dollar lower and stocks higher. Guidance or not, bad news is still good news in these distorted markets.
Will it last, or will we retrace? That question is better answered with purely mechanical dynamics: passive flows, fund flows, options positioning, just about anything but the fundamentals. These are the markets right now.
Now, what is worth watching: we’re entering a very important period, August OpEx (Option Expiration) next week, and then quarterly one in September, and then elections of course. Let’s see if they are able to manage this, or we’re set to experience significant volatility. I’d lean toward the second scenario.
So what do we do? We’ll follow and trade our favourite sectors, and as always, we won’t be selling, or what would be worse, shorting uptrends.
As to Europe, and the broader developed markets. They broke out some time ago, and continue higher, reinforced now by the easing dollar. In Asian markets China is taking a breather, but South Korea and Japan are stronger, right after the Yen intervention, call me shocked.
Otherwise not much changes in general outlook. Governments are spending like there’s no tomorrow, social programs, interest on debt, defense, some into green energy, now mining too, and anything else on the political agenda at the moment. And of course, in the private sector, the global AI capex race is on, funded by unbelievable amount o debt, and the raise money just keeps pouring down the datacenter chain.
All in all, the economy stays as K-shaped as it gets, and that dynamic is only reinforced by the brand new money creation, it just never seems to stop.
All is fine if we just remember: “don’t look up.”
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• NASDAQ 100 – UNITED STATES: sideways ➝ uptrend
• NIKKEI YEN – JAPAN: sideways ➝ uptrend
• FTSE 100 – UNITED KINGDOM: uptrend ➝ sideways
• MSCI EM – EMERGING MARKETS: sideways ➝ uptrend
• HSI HANG SENG – CHINA: uptrend ➝ sideways
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• NONE
COT CHANGES SINCE LAST WEEK
• NASDAQ 100 – UNITED STATES: neutral ➝ positive
• NIKKEI YEN – JAPAN: neutral ➝ positive
FOREX
There it is, another week of the dollar downtrend, and that with a very solid gain in the oil markets. The euro, the pound, or the yen started to move earlier, and now the commodity bloc is joining. Stronger week for the Canadian and Australian dollars. Also the New Zealand dollar, the Rand, and the Norwegian Krone, all moving into medium-term uptrends.
And gold of course, another week higher, confirming the late breakout and uptrend. We took our first positions some time ago, and now we’re sizing up where opportunities present themselves, and will let the trend do the rest.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• CHF/USD – SWISS FRANC: sideways ➝ downtrend
• BRL/USD – BRAZILIAN REAL: sideways ➝ downtrend
• BTC/USD – BITCOIN: sideways ➝ downtrend
• ETH/USD – ETHEREUM: uptrend ➝ sideways
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• CAD/USD – CANADIAN DOLLAR: downtrend ➝ sideways
• BRL/USD – BRAZILIAN REAL: uptrend ➝ sideways
• NZD/USD – NEW ZEALAND DOLLAR: sideways ➝ uptrend
• ZAR/USD – SOUTH AFRICAN RAND: sideways ➝ uptrend
• NOK/USD – NORWEGIAN KRONE: sideways ➝ uptrend
COT CHANGES SINCE LAST WEEK
• BRL/USD – BRAZILIAN REAL: neutral ➝ negative
INDUSTRIAL METALS
Silver continued higher last week, platinum held and palladium slipped a bit on the week. There is little belief out there that this move in precious metals is real, good, wall of worry is preferable, means not many are long here. Anything can happen of course, but for us, it’s certainly not the reason to change the system.
The base side is more mixed. Tin, zinc, steel, aluminum, all staying strong, while lithium, nickel and lead remain in downtrends. What is interesting: uranium woke up, we may finally be breaking out to the upside after roughly 6 months of boring sideways action.
Copper is still holding the fort in the background, though there’s that tariffs driven US hoarding in the mix, which likely unwinds at some point, regardless of the decision.
As always, we keep what is working, and we cut what is not, riding the waves.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• PALLADIUM – UNITED STATES: uptrend ➝ sideways
• URANIUM SPOT PRICE – GLOBAL: sideways ➝ uptrend
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• PALLADIUM – UNITED STATES: sideways ➝ downtrend
• ALUMINUM – UNITED STATES: sideways ➝ uptrend
COT CHANGES SINCE LAST WEEK
• PALLADIUM – UNITED STATES: positive ➝ neutral
ENERGIES
Act No. 55 in the Middle East war theatre now. More strikes, but I guess somebody is talking to somebody, I hope. And just at the moment where we’re all completely exhausted, they decided to play a game of chicken. But this time I’m afraid we are what’s for dinner.
We’ve cut back the trading the energy sector in the last few months, it was just too messy, but now price has stabilized at what looks like a much higher floor, so we may resume. In any case, the core long-term energy equity positions stay on, they’ve held up well, and will be hedged if they start trending down.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• CRUDE OIL – UNITED STATES: downtrend ➝ sideways
• GASOLINE – UNITED STATES: downtrend ➝ sideways
• COAL – NEWCASTLE, AUSTRALIA: downtrend ➝ uptrend
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• CRUDE OIL – UNITED STATES: downtrend ➝ sideways
COT CHANGES SINCE LAST WEEK
• GASOLINE – UNITED STATES: negative ➝ neutral
TREASURIES
Bad data moves the very short end. That’s reasonable. It’s what they can control, and there’s little room for pain or any real conviction to fight inflation. But the long end moves in the opposite direction. Yields go up and bonds get sold. This dynamic isn’t just in the US, it’s showing up all over the world.
Why? Because nothing structural has changed, or is about to change anytime soon. More deficits, more issuance, more supply, and a market that keeps front-running the extra easing that appears whenever something even starts to break. We still take no longs here.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• 2-YEAR T-NOTE – UNITED STATES: sideways ➝ uptrend
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• NONE
COT CHANGES SINCE LAST WEEK
• 30-DAY FED FUNDS – UNITED STATES: positive ➝ neutral
• 2-YEAR T-NOTE – UNITED STATES: neutral ➝ positive
AGRICULTURE
The ags keep taking turns, right back this time. The softs stepped up before, and last week the grains were stronger, wheat is back into an uptrend, corn, soybeans and canola going up with it.
So they rotate, good, that’s how these things breathe. The bigger picture hasn’t moved, the fertilizer and energy damage is done and El Niño is still out there. We stay long where the trends hold, and let the sector sort itself out.
There’s a crush spread setup we’ve got our eye on there, but it may really only resolve in 2027, and we’ll say of course if we put that trade on.
SHORT-TERM TREND CHANGES SINCE LAST WEEK
• UREA FERTILIZER – UNITED STATES: sideways ➝ downtrend
• ORANGE JUICE – UNITED STATES: sideways ➝ downtrend
• COFFEE C – UNITED STATES: uptrend ➝ sideways
• WHEAT – UNITED STATES: downtrend ➝ uptrend
• CORN – UNITED STATES: sideways ➝ uptrend
• SOYBEANS – UNITED STATES: downtrend ➝ sideways
• CANOLA – CANADA: sideways ➝ uptrend
MEDIUM-TERM TREND CHANGES SINCE LAST WEEK
• NONE
COT CHANGES SINCE LAST WEEK
• SUGAR NO. 11 – UNITED STATES: positive ➝ neutral
• SOYBEANS – UNITED STATES: negative ➝ neutral
That’s it for now. Stay safe out there!
Kacper Piotr Kaminski, Cerlogic Markets Research – intel.cerlogic.com
This publication is for informational and educational purposes only and does not constitute investment advice. Markets involve risk, and every participant is responsible for their own decisions.
The present report is better written, richer in details than the previous ones. That is very satisfactory and actionable. Thanks, Piotr.