Following futures positions of non-commercials are as of Aug 19, 2025.

10-year note: Currently net short 945.5k, up 3.3k.

Chair Jerome Powell used Friday’s Jackson Hole speech to suggest a rate cut is coming in the next meeting, which is scheduled for September 16-17. He tried to sound as dovish as he possibly could, saying “…the shifting balance of risks may warrant adjusting our policy stance.” Use of the word ‘may’ was proper as two more important data points are due out before the upcoming FOMC meeting – July’s PCE (personal consumption expenditures) on the 29^th and August’s payrolls on the 5^th.

Unlike in the past, a rate cut will probably not mark the start of a sustained easing cycle. Governor Michelle Bowman, one of the two dissenters – the other being Governor Christopher Waller – in the July 29-30 meeting when the fed funds rate was left steady at a range of 425 basis points to 450 basis points, expects three 25-basis-point cuts in the remaining three meetings this year. Even the futures market is beginning to doubt this. As things stand, fed funds futures traders are betting on two cuts – one each in September and December.

Minutes of the July meeting released on Wednesday noted that “Participants generally pointed to risks to both sides of the committee’s dual mandate, emphasizing upside risk to inflation and downside risk to employment.” The minutes further said that “participants pointed to the uncertain effects of tariffs and the possibility of inflation expectations becoming unanchored.” Powell in his speech argued that a range of outcomes is possible for tariff impacts. It may be short-lived, and that “it will continue to take time for tariff increases to work their way through supply chains and distribution networks.” In other words, as the minutes of the July meeting put it: “Participants judged that considerable uncertainty remained about the timing, magnitude, and persistence of the effects of this year’s increase in tariffs.”

30-year bond: Currently net short 51k, down 9.8k.

Major US economic releases for next week are as follows.

New home sales (July) are due out Monday. June sales inched up 0.6 percent month-over-month to a seasonally adjusted annual rate of 627,000 units – a two-month high.

Durable goods orders (July) and the S&P Case-Shiller home price index (June) are scheduled for Tuesday.

Orders for non-defense capital goods ex-aircraft – proxy for business capex plans – fell 0.8 percent m/m in June to $75.4 billion (SAAR). May’s $76 billion was a 29-month high. A record high $78.1 billion was set in August 2022.

Nationally in May, home prices rose 2.3 percent from a year ago. This was the slowest annual price appreciation since July 2023. The rate of growth has decelerated since March last year when prices rose 6.6 percent.

Thursday brings GDP (2Q25, 1^st revision). The first print showed that real GDP grew at an annualized rate of three percent in the June quarter. This was the best showing in three quarters.

Personal income/spending (July) and University of Michigan’s consumer sentiment index (August, final) will be out Friday.

In the 12 months to June, headline and core PCE rose 2.6 percent and 2.8 percent respectively – both at four-month highs. Earlier in 2022, they reached four-decade highs of 7.3 percent and 5.7 percent in June and February, in that order.

August’s preliminary count showed consumer sentiment dropped 3.1 points m/m to 58.6 – a three-month low.

WTI crude oil: Currently net long 122.8k, up 10.9k.

After dropping for two weeks in a row – and in four out of five – West Texas Intermediate crude proceeded this week to unwind the oversold condition it was in on the daily, rallying 1.5 percent to $63.77/barrel.

Two weeks ago, crucial horizontal support at $65-$66 was compromised, and this support-turned-resistance likely acts like a magnet for now. The 50- and 200-day moving averages lie at $66.60 and $67.54 respectively.

In the meantime, US crude production in the week to August 15^th increased 55,000 barrels per day week-over-week to 13.382 million b/d; output has come under slight pressure since registering a record 13.631 mb/d in the week to December 6^th last year. Crude imports decreased 423,000 b/d to 6.5 mb/d. As did crude and gasoline inventory, which respectively declined six million barrels and 2.7 million barrels to 420.7 million barrels and 223.6 million barrels. Stocks of distillates, however, rose 2.3 million barrels to 116 million barrels. Refinery utilization grew two-tenths of a percentage point to 96.6 percent.

E-mini S&P 500: Currently net short 171.5k, down 20.6k.

Down 1.6 percent at Wednesday’s low, equity bulls this week managed to eke out a gain of 0.3 percent to 6467, with Friday’s session high of 6479 within striking distance of the prior Friday’s all-time high of 6483. In four out of the last eight sessions, the S&P 500 stopped at 6470s-6480s. This gives the bulls an opportunity to go for yet another breakout next week.

For bears’ consolation, the weekly produced a hanging man, which can be bearish, but it needs confirmation; three weeks ago, a bearish engulfing candle formed, but that went begging. In the event the large cap index comes under pressure in the sessions ahead, nearest support lies at 6390s, with crucial breakout retest at 6100s, which has not been genuinely tested since June.

Euro: Currently net long 118.7k, up 3.3k.

Going into this week, the euro remained bound by trendline resistance from July’s high when it tagged $1.183 on the 1^st. This week, Monday’s rally attempt once again failed at that hurdle, followed by slight downward pressure in the next three sessions, with a slight breach of the 50-day ($1.165). This all changed Friday when the euro benefited from the greenback’s weakness, jumping 0.95 percent for the session to go up 0.15 percent for the week to $1.1722. But this was still not enough to decisively take out the trendline in question.

That said, euro bulls did defend horizontal support at $1.16 on Friday, with the session low of $1.1583. A decisive breach of $1.16 should open the door toward $1.12, which the currency broke out of in April and where it had faced decent resistance last August and September.

Early this year, the euro bottomed around $1.02s, so has come a long way. Right here and now, euro bulls are likely to find it difficult to push through the July trendline, let alone the high of that month.

Gold: Currently net long 212.6k, down 16.9k.

Gold rallied one percent this week to $3,371/ounce but remains trapped within a symmetrical triangle. Since reaching a fresh all-time high of $3,500 on 22 April, the metal has made several lower highs. Concurrently, it has made higher lows since mid-May when it ticked $3,121 intraday. A symmetrical triangle has thus been formed. These triangles tend to be neutral but can also represent a continuation pattern, in which case the metal wants higher prices. It has been rallying since it ticked $2,608 on December 30.

Whichever way the prevailing consolidation resolves, the trend likely continues. The upper trendline in question gets tested around $3,430. Friday, the yellow metal succeeded in recapturing the 50-day at $3,349.

Nasdaq (mini): Currently net long 33.8k, down 8.5k.

On the back of Powell’s dovish Jackson Hole speech, both large- and small-caps finished the week in the green. But large-cap tech could not quite pull that off. The Nasdaq 100 finished down 0.9 percent to 23498, although it recovered from down 3.2 percent at Wednesday’s low.

Potentially worse for tech bulls is how the week evolved and what the resulting candle is telling us about the supply-demand dynamics. This week produced a hanging man, which follows last week’s spinning top. Four weeks ago, a bearish engulfing candle formed, although the bears were unable to convert that into an opportunity. Let us see if they will be able to cash in on the latest two potentially bearish candles.

Nearest support lies at 22900s, which also lines up with the 50-day at 22906. The Nasdaq 100, having bottomed at 16542 on 7 April, has come a long way and remains overbought.

Russell 2000 mini-index: Currently net short 79.4k, down 15.8k.

Seven sessions after suffering a false breakout on the 13^th this month, the Russell 2000 decisively pushed through 2300 this week. As a matter of fact, the small cap index was down for the week until Thursday. Then Friday happened, and the 3.9 percent rally it produced in hopes of lower interest rates. For the week, the index jumped 3.3 percent to 2362.

For bulls and bears alike, 2300 has proven to be an important price point going back to February 2021. The Russell 2000 needs to rally another 4.4 percent before it reaches last November’s intraday high of 2466, which barely edged past the prior high of 2459 from November 2021. Even if the index manages to rally toward those highs, rejection risks are high; should that be the case, it will be an important denial.

US Dollar Index: Currently net short 6k, down 259.

The US dollar index is in slight breach of trendline support from 1 July when it bottomed at 96.38. (In January, it tagged 110.18 and reversed lower.) This week, it fell 0.1 percent to 97.73. The question is if the bears will be able to make something out of the breach. Dollar bulls should be fine until the July 1^st low gets violated. Then, and importantly, around 97 lies crucial trendline support going back to the lows of April and May of 2011.

VIX: Currently net short 92.8k, up 9.6k.

Non-commercials kept adding to their net shorts, which are now the highest since September 2022, and were rewarded. VIX declined 0.87 points this week to 14.22. The volatility index is at crucial support, or arguably, it has already suffered a breach, albeit slightly.

In January and February this year, VIX traded in 14.50s-14.70s for several sessions before turning up. This was again the case on 29 and 31 July, with a few sub-15 readings before that. So, this has been breached, although from volatility bulls’ perspective, things should be fine until 14 gets compromised. Should that be the case, the bears – and equity bulls – would be eyeing the 12-13 handle.

Thanks for reading!

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