Following futures positions of non-commercials are as of Sep 2, 2025.

10-year note: Currently net short 868.4k, down 15.5k.

Non-farm payrolls continue to disappoint. August only produced 22,000 jobs, with June revised lower into a minus column – the first negative month since December 2020. Such has been the pace of deceleration that the last four months averaged a meagre 27,000 new jobs. The monthly average year-to-date stands at 75,000. This compares with the monthly average of 168,000 in 2024 and 215,000 in 2023.

This pretty much seals a 25-basis-point reduction in the fed funds rate in the upcoming FOMC meeting, slated for 16-17 this month. The policy-setting body has left the rates unchanged between 425 basis points and 450 basis points since December, when they eased by a full percentage point over three meetings, including a 50 last September.

August’s CPI is due out next Thursday. Inflation has been trending higher since May. If the latest report does not cooperate, then fed funds futures traders will probably be forced to readjust their very dovish expectations for this year and next. Until Friday’s jobs report, they were pricing in two 25-basis-point cuts this year and three more next year. This has now been rerated to three this year – one each in the remaining three meetings – followed by three more next year.

The Federal Reserve is in a tight spot. Jobs make up one side of their mandate, and inflation the other. The central bank has a two percent goal on inflation, but most measures of inflation are near or past three percent. This does not allow them to aggressively respond to a frozen, but not cracked yet, job market.

30-year bond: Currently net short 77.3k, up 41.3k.

Major US economic releases for next week are as follows.

The NFIB optimism index (August) is scheduled for Tuesday. Small-business optimism in July increased 1.7 points month-over-month to 100.3 – a five-month high.

On Wednesday, the producer price index (August) is due out. In the 12 months to July, headline and core wholesale prices rose 3.3 percent and 2.8 percent respectively, with the former at a five-month high and the latter matching April’s reading.

Thursday brings the consumer price index (August). Headline and core CPI in July respectively increased 2.7 percent and 3.1 percent from a year ago. Both have been rising since bottoming at 2.3 percent and 2.8 percent in April. Earlier in 2022, they respectively peaked at four-decade highs of 9.1 percent and 6.6 percent in June and September, in that order.

University of Michigan’s consumer sentiment index (September, preliminary) is on schedule for Friday. August’s final count showed consumer sentiment dropped 3.5 points m/m to 58.2, which set a three-month low, with the 52.2-reading in April and May the lowest since July 2022.

WTI crude oil: Currently net long 125.9k, down 474.

West Texas Intermediate crude opened the holiday-shortened week strong with Tuesday essentially closing at the 50-day moving average ($65.42). That resistance, however, held, and the crude fell in the next three sessions, losing 3.2 percent for the week to $61.97/barrel.

Tuesday’s high of $65.76 was also a test of crucial horizontal support-turned-resistance at $65-$66, and oil bulls faced rejection. If in the sessions ahead Friday’s low of $61.45 gets breached, the bears are likely to find it easy to push the price toward $60.

In the meantime, US crude production in the week to August 29^th decreased 16,000 barrels per day week-over-week to 13.423 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 increased 508,000 b/d to 6.7 mb/d. As did stocks of crude and distillates, which respectively grew 2.4 million barrels and 1.7 million barrels to 420.7 million barrels and 115.9 million barrels. Gasoline inventory, however, dropped 3.8 million barrels to 218.5 million barrels. Refinery utilization declined three-tenths of a percentage point to 94.3 percent.

E-mini S&P 500: Currently net short 161.1k, down 26.7k.

Equity bulls put their foot down on Tuesday just above the rising 50-day (now 6350) when the session low of 6361 was bought. This was followed by strength in the next couple of sessions and a selloff on Friday, with the latter in fact recording a fresh intraday high of 6533 but closing at 6482, up 0.3 percent for the week.

For bulls’ consolation, Friday was down to 6444 at one point, but that was bought at the 20-day. In the end, the S&P 500 ended the week with a long upper wick. This comes after last week’s doji, a hanging man before that and a bearish engulfing candle three weeks before that.

These candles are showing up after massive gains from the intraday low of 4835 posted on 7 April. Concurrently, the daily Bollinger bands have tightened quite a bit; this tends to precede a sharp move – up or down. Given that the large cap index is sitting on a five-month rally, odds favor downward pressure more than continued upward pressure.

Once the 50-day gives way, there will be crucial breakout retest at 6100s, which has not been genuinely tested since June.

Euro: Currently net long 119.6k, down 3.4k.

The euro rallied from $1.02s in January to July’s $1.183. It then kind of went sideways along a falling trendline from that high, while concurrently managing to defend horizontal support at $1.16. On Tuesday and Wednesday this week, the currency tagged $1.1613 and $1.1608, ending the week up 0.3 percent to $1.1719, nudging its head out of the trendline resistance in question as well as reclaiming the 50-day ($1.1669). The euro essentially straddled the average throughout August and the first few sessions this month.

It is possible it rallies further in the sessions ahead, but the probability of a rally past the July 1^st high is very low right here and now.

Gold: Currently net long 249.5k, up 35.2k.

Last week, gold broke out of a symmetrical triangle, consisting of several lower highs since reaching a fresh all-time high of $3,500 on 22 April and several higher lows since mid-May when it ticked $3,121 intraday.

This triangle breakout was followed this week by a new high north of $3,500. This was achieved as early as the week got underway on Tuesday, with more strength in the following sessions, culminating in Friday’s new intraday high of $3,600. For the week, the yellow metal jumped four percent to $3,587/ounce.

Gold shows a lot of positive momentum behind it. The daily, however, is getting extended. In the event of weakness in the sessions ahead, gold bugs will have an opportunity to defend $3,500 and/or $3,440s.

Nasdaq (mini): Currently net long 15.4k, down 20.6k.

As is the case with the S&P 500, daily Bollinger bands have also narrowed on the Nasdaq 100. This precedes a 45-percent surge between the April 7^th low of 16542 and the August 13^th high of 23969. Unlike the S&P 500 which registered a new high on Friday, the Nasdaq 100 remains under last month’s high. On Friday, the tech-heavy index ticked 23860 intraday but only to reverse and close at 23652, up one percent for the week.

For all intents and purposes, the Nasdaq 100 has gone sideways for the last five to six weeks. A breakout here will be massive. But this is also a time the index has produced several indecision and potentially bearish (although not confirmed) candles. Last week’s shooting star followed a weekly hanging man and a spinning top before that. In the event of selling pressure, nearest support lies at 22900s, which was defended on Tuesday, with a session low of 22978; this was also a test of the rising 50-day (now 23201).

Russell 2000 mini-index: Currently net short 60.3k, down 6.5k.

Non-commercials continue to cut back on their net shorts. In the meantime, the cash continues to trudge higher, toward 2400. As a matter of fact, intraday Friday, the Russell 2000 did tag 2407, although it closed at 2391, up one percent for the week. This was the fifth consecutive positive week.

Three weeks ago, the small cap index broke out of 2300 on rate-cut hopes. 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.

Now that 2300 has been reclaimed, small-cap bulls have the wind on their back to at least rally toward last November’s all-time high of 2466, which edged past the prior high of 2459 from November 2021. Only then we will find out if the recent rally has any staying power. There is a risk of a triple top, should investor perceptions rise that low interest rates will likely fail to kick the economy into higher gear.

US Dollar Index: Currently net short 5k, down 1.1k.

This was the third week in a row the US dollar index put in lower highs. Concurrently, it has breached – albeit slightly – a rising trendline from 1 July when it bottomed at 96.38.

The index has been under downward pressure for several months now, tagging 110.18 in January and then reversing lower. At least from the trading perspective, until the July low gets taken out decisively, dollar bulls probably deserve 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. This week, the index was flat (or down 0.03 percent) to 97.74.

VIX: Currently net short 107k, up 13.8k.

Non-commercials continue to add to net shorts, which are now the highest since March 2021 – from 4,424 net longs as of May 20^th this year to 106,952 net shorts as of this Tuesday. VIX has gone from 60.13 intraday on 7 April to a low of 14.12 last Thursday. This week, it gave way 0.18 points to 15.18, with Friday’s intraday low of 14.74.

Despite this, 14 has refused to yield. 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; August was no exception.

If this continues, there will come a time when non-commercials will be tempted to lock in their profit, and that will put upward pressure on volatility.

Thanks for reading!

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