Following futures positions of non-commercials are as of April 29, 2025.

10-year note: Currently net short 871.5k, down 34.5k.

The FOMC meets next week. The two-day meeting ending Wednesday is the year’s third, and five more remain after this. During the March meeting, the fed funds rate was left steady at a range of 425 basis points to 450 basis points, even as the quarterly statement cut the growth rate forecast in real GDP this year from 2.1 percent in December to 1.7 percent while raising core inflation forecast from 2.5 percent to 2.8 percent; at the post-meeting presser, Chair Jerome Powell said the forecasts are “highly uncertain.” He could not be more accurate.

President Donald Trump’s aggressive – and arguably haphazard – tariff policy has created a lot of confusion and uncertainty in the business community. While reporting their March-quarter results, several company managements have blamed the tariffs for withdrawing guidance. At the same time, imports have surged, done with a view to avoiding tariffs, resulting in inventory build, which may result in steady inflation readings for at least a few months as this lower-price inventory hits the shelves.

The Trump administration, including Trump, continues to jawbone Powell to lower rates. The latter is caught between a rock and a hard place. It is impossible to model how the tariff saga ends. If it persists, it is destined to result in higher prices and a lower economic activity as consumers retrench. In this scenario, it would make sense for the FOMC to telegraph that a cut is coming. If, however, a monetary easing is quickly followed by a tariff resolution, this has the potential to end up unnecessarily goosing up the economy. Ideally, it would make sense for Powell to wait as long as possible.

Next week’s meeting is a no-brainer. They are not going to move. Going into Friday’s jobs report, which showed April added 177,000 non-farm jobs, futures traders were pricing in four 25-basis-point cuts beginning in June. Post-jobs, they are betting on three cuts, with the first one in July. That is nearly three months from now. A lot can happen between now and then as regards to how the trade war will evolve and how that will impact the economic and inflation outlook. This probably gives the Fed room to not rush to make a move.

30-year bond: Currently net short 85.6k, down 22.1k.

Major US economic releases for next week are as follows.

The ISM services index (April) is on schedule for Monday. In March, services activity tumbled 2.7 percentage points month-over-month to 50.8 percent. This was the lowest reading since last June’s 49.2 percent.

Thursday brings labor productivity (1Q25). Non-farm output/hour rose two percent from a year ago in the December quarter. This was the smallest pace of growth in six quarters.

WTI crude oil: Currently net long 211.6k, down 2.7k.

A month ago, horizontal support at $65-$66 was decisively breached with a daily gap-down. This was followed by an intraday low of $56.06 on April 9^th before reversing sharply higher by close. West Texas Intermediate crude subsequently rallied to $64.86 by the 17^th, which oil bears used as an opportunity to get active. This week, it sank 7.4 percent to $58.38/barrel. April’s low is not that far away.

Horizontal support at $55 goes back a couple of decades. If this gets breached, the next layer of support is not until the low-$50s, and then the low-$40s.

In the meantime, US crude production in the week to April 25^th increased 5,000 barrels per day week-over-week to 13.465 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 dropped 91,000 b/d to 5.5 mb/d. As did stocks of crude and gasoline– down 2.7 million barrels and four million barrels respectively to 440.4 million barrels and 225.5 million barrels. Stocks of distillates, however, rose 937,000 barrels to 107.8 million barrels. Refinery utilization increased five-tenths of a percentage point to 88.6 percent.

E-mini S&P 500: Currently net short 78.7k, up 2.7k.

Up nine sessions in a row, the S&P 500 is now up 17.6 percent from the April 7^th low of 4835. Earlier, from the all-time high of 6147 posted on February 19^th through last month’s low, the large cap index plunged 21.3 percent.

The rally off of the April 7^th low has been nothing but impressive. The S&P 500 is now up three out of four weeks. Last Friday, equity bulls recaptured support-turned-resistance at 5500, and they built on that this week, closing at 5687, up 2.9 percent for the week.

The daily has quickly transitioned from oversold to overbought. Yet, the daily RSI (59.63) is yet to get overbought crossing 70. The 50-day (5583) was reclaimed this week, and the 200-day (5746) is right above. Right around there, at 5760s, lies horizontal resistance.

On the weekly, indicators such as the RSI have approached the median. It is possible positive momentum slows down here and turns lower. In the event of a drawdown, 5500 is key.

Euro: Currently net long 75.8k, up 10.8k.

The euro acts like it wants lower prints. Down 0.5 percent this week to $1.1303, this follows last week’s 0.3 percent drop. Previously, on April 21^st, it tagged $1.1573 before coming under pressure.

Last September, on the 30^th, the currency reversed lower after facing rejection at $1.12 for six consecutive weeks. It stabilized early this year around $1.02s, reclaiming $1.12 on April 10^th. A breakout retest at $1.12, which is within striking distance, is the path of least resistance.

Gold: Currently net long 163.3k, down 12.1k.

Non-commercials continue to cut their exposure to gold, with net longs the lowest since February last year. They have been reducing their holdings for over six months now, even as the metal ripped higher, particularly since December 30^th last year when it ticked $2,608.

This week, gold gave back 2.4 percent to $3,239/ounce – a back-to-back down week. Last week, on April 22^nd, the yellow metal ticked a fresh new intraday high of $3,500 but only to finish with a long upper wick on the weekly.

Gold is extended on nearly all timeframes. There is plenty of support should it come under downward pressure. Immediately ahead, gold bugs can show up at $3,160s, with the 50-day at $3,087.

Nasdaq (mini): Currently net long 30.9k, down 6.8k.

Of the four major companies reporting their March quarter this week, Microsoft (MSFT) and Facebook owner Meta Platforms (META) delivered, while Apple (AAPL) and Amazon (AMZN) disappointed. Last week, results from Tesla (TSLA) and Alphabet owner Google (GOOG) drew positive reaction.

In the end, the Nasdaq 100 jumped 3.5 percent this week to 20103. This was the third up week in four. On April 7^th, the tech-heavy index bottomed at 16542, down 25.6 percent from the February 19^th all-time high of 22223.

Positive momentum is strong, but the Nasdaq 100 has already rallied 21.5 percent from the April 7^th low. Intraday Friday, it tagged the 200-day at 20176; the last time the index closed above the average was on March 5^th. Even if this average gets taken out next week, there is solid resistance at 20500s.

Russell 2000 mini-index: Currently net short 406, down 6.3k.

Until Thursday, the Russell 2000 was up 0.9 percent for the week. Then came April’s much-better-than-expected jobs report, and the small cap index flew 2.3 percent in the session, for a weekly increase of 3.2 per cent to 2021.

Small-caps inherently have a larger exposure to the domestic economy than their large-cap brethren. Investors accordingly responded to the healthy jobs numbers, although there is a good likelihood that tariffs-induced cracks begin to show up beginning this month’s numbers.

For now, small-cap bulls have taken care of 2000 resistance. In the best of circumstances, they can stretch it to 2100.  

For nearly two years through December 2023 the Russell 2000 was rangebound between 1700 and 1900 before breaking out. It then went on to post a new all-time high of 2466 on November 25^th last year, edging past the prior high of 2459 from November 2021. The index then went on to lose 29.7 percent through the April 9^th low this year of 1733.

The significance of 2100 dates back to January 2021. Most recently, it was breached two months ago, in early March. Bulls would love to go test how genuine that breakdown was.

US Dollar Index: Currently net short 449, down 525.

The US dollar index rallied 0.6 percent this week to 100.04. Last week, it edged up 0.1 percent, but it reversed higher after having tagged 97.92 on April 21^st. Earlier, the index peaked on January 13^th at a two-plus-year intraday high of 110.18.

There is multi-year horizontal support/resistance just north of 100, which probably gets reclaimed in the sessions/weeks ahead. The index is oversold.

VIX: Currently net long 4.2k, up 10k.

VIX has gone from 60.13 on April 7^th to Friday’s close of 22.68. Volatility bulls have an opportunity to prove that that spike was no fluke. On the weekly, indicators such as the RSI have approached the median from above. In the past, these indicators have shown a tendency to turn back up from around here. Should this scenario not come to pass, the 200-day lies at 19.56. The 50-day at 25.87 was breached this Wednesday.

Thanks for reading!

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