Following futures positions of non-commercials are as of Aug 26, 2025.

10-year note: Currently net short 883.8k, down 61.7k.

Unlike in his first four-year term, President Donald Trump’s preoccupation with the Federal Reserve has gone up meaningfully during his second term. For months, he has been calling for lower rates and has even threatened to fire Chair Jerome Powell. In an unrelated case as regards to members of the National Labor Relations Board and Merit Systems Protection Board, the Supreme Court ruled in May that the president can fire heads of independent agencies but exempted the Fed and board members from terminations. It increasingly looks like the apex court will be revisiting the issue soon.

On Monday, Trump ousted Governor Lisa Cook, accusing her of mortgage fraud. The Federal Reserve Act says governors could only be removed “for cause.” On Thursday, Cook sued the Trump administration seeking an injunction to block her firing, arguing no cause exists for the president to fire her and that he has no authority to do so. At issue are two home mortgages Dr. Cook took out in 2021. She has been accused of falsifying records to obtain the mortgages. Even if that were to be the case, it is up to the court to decide if that “clerical error” was grave enough for her to lose the job. She was appointed governor in 2024, and her term does not end till 2038.

A lot is riding on this, not only for Trump and Cook but also for Fed independence. Trump appointed two board members d uring the first term. He recently nominated Stephen Miran, his economic adviser, to replace Governor Adriana Kugler, who stepped down on the 1^st this month. If the court sides with Trump as relates to his firing of Cook, the board will have shifted four to three in his favor. There are also talks of the administration strategizing how to influence the selection of 12 regional Fed banks, five of whom serve as voting members in the FOMC.  

Thus far, markets have not been bothered in the least by all this melodrama. If the Fed falls under the control of the White House, rates are likely to be lower than dictated by economic fundamentals. Traditionally, markets try not to fight the Fed. But they may – or will be forced to – begin to do so once political intervention reaches a stage of harming, than helping, the system. Alternatively, the newly appointed members, once they drink the Fed Kool Aid and ruminate over if their job is to serve the party or the central bank, will begin to resist political pressure. Fingers crossed!

30-year bond: Currently net short 36k, down 15k.

Major US economic releases for next week are as follows. Markets are closed Monday for observance of Labor Day holiday.

The ISM manufacturing index (August) is on schedule for Tuesday. In July, manufacturing activity dropped one percentage point month-over-month to 48 – a nine-month low and a fifth consecutive month of sub-50 percent reading.

Job openings (JOLTs, July) and durable goods orders (July, revision) will be out Wednesday.

Non-farm job openings in June declined 275,000 m/m to 7.4 million – a two-month low. The series peaked in March 2022 at 12.1 million and bottomed last September at 7.1 million.

July orders for non-defense capital goods ex-aircraft – proxy for business capex plans – increased 1.1 percent m/m to a seasonally adjusted annual rate of $76.4 billion, which was a 32-month high. The all-time high of $78.1 billion was set in August 2022.

Thursday brings labor productivity (2Q25, revision) and the ISM services index (August).

The first print showed June-quarter non-farm output per hour grew 1.3 percent from a year ago. The 1Q25 reading of 1.2 percent reached an eight-quarter low.

Non-manufacturing activity contracted seven-tenths of a percentage point m/m in July to 50.1 percent, which was a two-month low.

Payrolls (August) will be reported Friday. In the first seven months this year, non-farm job additions have averaged 85,000 per month. This compares with a monthly average of 168,000 in 2024 and 216,000 in 2023. In July, the economy only created 73,000 jobs, even as May and June were substantially revised lower to 19,000 and 14,000 respectively.

WTI crude oil: Currently net long 126.4k, up 3.6k.

The week began with Monday’s test of crucial horizontal support-turned-resistance at $65-$66, which was compromised three weeks ago, and the resistance held, with the session tagging $65.10. In the end, West Texas Intermediate crude finished the week up 0.6 percent to $64.01/barrel.

Rather worryingly for oil bulls, the daily RSI is turning lower at the median. Concurrently, the crude is getting overbought on the daily, raising odds of downward pressure in the sessions ahead.

In the meantime, US crude production in the week to August 22^nd increased 57,000 barrels per day week-over-week to 13.439 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 263,000 b/d to 6.2 mb/d. As did stocks of crude, gasoline, and distillates, which respectively declined 2.4 million barrels, 1.2 million barrels and 1.8 million barrels to 418.3 million barrels, 222.3 million barrels and 114.2 million barrels. Refinery utilization dropped two percentage points to 94.6 percent.

E-mini S&P 500: Currently net short 187.8k, up 16.3k.

Until Thursday’s intraday high of 6508, the S&P 500 was up 0.6 percent for the week. Equity bulls were unable to hang on to it, however, as the week ended lower 0.1 percent to 6460, forming a doji. This comes after last week’s hanging man and a bearish engulfing candle three weeks before that.

These indecision and/or potentially bearish candles are developing after a rip-roaring rally from 7 April when the large cap index bottomed at 4835.

As things stand, the daily looks vulnerable. The 50-day moving average is at 6316; after that lies crucial breakout retest at 6100s, which has not been genuinely tested since June.

Euro: Currently net long 123k, up 4.3k.

The euro dropped 0.3 percent to $1.1686, but not a whole lot changed this week. The currency continues to remain bound by trendline resistance from July’s high when it tagged $1.183 on the 1^st. At the same time, horizontal support at $1.16 continues to draw bids, with Wednesday ticking $1.1574.

Further, the euro essentially straddled the 50-day ($1.167) throughout the month. In the meantime, the daily Bollinger bands have really tightened; when this happens, a sharp move is likely – either up or down.  

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 214.3k, up 1.7k.

Gold bugs this week scored an important technical victory. 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 $2,596 on 30 December.

This week, gold broke out of the triangle, rallying 2.2 percent to $3,449/ounce. The daily is getting overbought, but the yellow metal has plenty of room to rally on the weekly.

Nasdaq (mini): Currently net long 36.1k, up 2.2k.

The much-anticipated July-quarter report from Nvidia (NVDA) came and went, without igniting much of a post-earnings reaction. The company beat on both the top and bottom lines, but those expecting a strong outlook were left wanting. On Thursday, the stock opened down slightly but managed to rally intraday to come within a penny of the all-time high of $184.48 posted on the 12^th this month, only to then come under pressure to end down 0.8 percent to $180.17. Sellers came out in droves on Friday, as the stock closed lower 3.3 percent. NVDA is a crowd favorite with a $4.2-trillion market cap. It acts like it is itching to go lower. There is crucial horizontal support at $150.

With nearly 10 percent weight in the Nasdaq 100, NVDA wields an outsize influence on the index, in which four of the last five weekly candles have probably boosted the morales of tech bears. This week, the Nasdaq 100 lost 0.4 percent to 23415, forming a shooting star. This came on the heels of a hanging man last week, a spinning top before that and a bearish engulfing candle two weeks before that.

The Nasdaq 100 is showing signs it wants lower prices for now. Having bottomed at 16542 on 7 April, it has come a long way and remains overbought. Nearest support lies at 22900s, which also lines up with the 50-day at 23080.

Russell 2000 mini-index: Currently net short 66.8k, down 12.6k.

The Russell 2000 edged up 0.2 percent to 2366 alright yet was unable to meaningfully build on last week’s breakout at 2300.

For bulls and bears alike, 2300 has proven to be an important price point going back to February 2021. Most recently, breakout attempts were getting resisted from early July. Last Friday, in hopes of lower interest rates ahead, the small cap index recaptured the level. This week, it tagged 2384 on Thursday but failed to hang on to it, ending the week with a weekly spinning top.

The daily is way overbought. Ahead, small-cap bulls are likely to be forced to defend the 2300 breakout.

US Dollar Index: Currently net short 6.1k, up 117.

The US dollar index rose 0.1 percent this week to 97.85 but remains slightly under a trendline from 1 July when it bottomed at 96.38, having breached that support last week.

This January, the index tagged 110.18 and reversed lower. Until the July low gets taken out decisively, dollar bulls should be given the benefit of the doubt. There is also important trendline support around 97 which goes back to the lows of April and May of 2011.

Near term, there is support at 97.60s.

VIX: Currently net short 93.1k, up 351.

VIX rallied 1.14 points this week to 15.36 but not before ticking 14.12 on Thursday, which registered the lowest print since last December.

For volatility bulls, it was important that 14 did not breach, and it did not. 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.

As things stand, volatility seems to want to perk up for now.

Thanks for reading!

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