Following futures positions of non-commercials are as of May 27, 2025.

10-year note: Currently net short 769.6k, down 81.8k.

Non-commercials seem to be anticipating lower yields ahead. They remain heavily net short 10-year note futures but have been actively cutting back in recent weeks. In the week to October 1, 2024, they held 1.14 million net shorts – a record – before cutting them to 567,935 contracts by 14 January this year. Holdings once again grew to peak at 1.08 million by 8 April. This week, they stood at 769,604, down just short of 50 percent from last October’s record.

Most recently, these traders have been reducing their exposure since early April, which is when the 10-year treasury yield bottomed at 3.89 percent on the 4^th. Earlier, on 14 January, rates hit 4.81 percent, which was a lower high versus a 16-year high of five percent reached in October 2023. A trendline drawn from that high extends to 4.7 percent; the closest the 10-year came to testing this resistance was on the 22^nd (this month) when 4.63 was ticked intraday.

This week, yields fell nine basis points to 4.42 percent. Friday’s low of 4.39 percent tested a rising trendline from April’s low. As soon as this support gives way, the 50- and 200-day moving averages (respectively 4.34 percent and 4.26 percent) should begin to act as magnets.

30-year bond: Currently net short 53.9k, down 18.1k.

Major US economic releases for next week are as follows.

The ISM manufacturing index (May) is on schedule for Monday. Manufacturing activity in April dropped three-tenths of a percentage point month-over-month to 48.7 percent – a five-month low.

Durable goods orders (April, revised) and JOLTs job openings (April) will be out.

April orders for non-defense capital goods ex-aircraft – proxy for business capex plans – were down 1.3 percent m/m to a seasonally adjusted annual rate of $74.8 billion, which is a four-month low. In August 2022, record $78.1 billion was hit.

In March, non-farm job openings declined 288,000 m/m to 7.2 million – a six-month low. Last September’s 7.1 million was the lowest since the metric peaked at 12.1 million in March 2022.

Wednesday, the ISM services index (May) is on tap. In April, services activity increased eight-tenths of a percentage point m/m to 51.6 percent. This was the 10^th month in a row the index remained north of 50.

Labor productivity (1Q25, revised) will be reported on Thursday. Preliminarily, March-quarter output per hour climbed 1.4 percent from a year ago – an eight-quarter low.

Friday brings payroll (May). In the first four months this year, the economy created an average 144,000 non-farm jobs, which represents a slower pace versus a monthly average of 168,000 in 2024, 216,000 in 2023 and 380,000 in 2022.

WTI crude oil: Currently net long 183.7k, down 14.7k.

West Texas Intermediate crude suffered its second straight down week but continues to consolidate under $65-$66, which was decisively breached eight weeks ago with a daily gap-down. Down 1.6 percent this week to $60.79/barrel, a spinning top formed on the weekly, following last week’s long-legged doji. In fact, since bottoming at an intraday low of $56.06 on 9 April, there have been four weekly spinning tops and a long-legged doji over eight weeks. Earlier, the crude reversed lower after tagging $79.39 on 15 January.

This sideways action in due course should favor the bulls, who, however, must defend the early-April low if things come to that. 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 May 23^rd increased 9,000 barrels per day week-over-week to 13.401 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 as well, up 262,000 b/d to 6.4 mb/d. Stocks of crude, gasoline, and distillates went the other way – down respectively 2.8 million barrels, 2.4 million barrels and 724,000 barrels to 440.4 million barrels, 223.1 million barrels and 103.4 million barrels. Refinery utilization dropped five-tenths of a percentage point to 90.2 percent.

E-mini S&P 500: Currently net short 53k, down 43.6k.

A falling wedge is developing on the S&P 500. This can be bullish in the near term should the large cap index break out of 5940s. This week, the index added 1.9 percent to 5912, with Friday finishing unchanged after having dropped to 5844 intraday.

All this is unfolding above the 200-day (5785), which was reclaimed on the 12^th this month. The only problem is that the S&P 500 has had a massive rally since 7 April when it bottomed at 4835. Earlier, it posted an all-time high of 6147 on 19 February.

The daily is extended, and the weekly will soon enter that territory. Should the aforementioned wedge breakout come, it needs to occur soon. Else, shorter-term averages (10- and 20-day) can begin to point lower soon.

If weakness develops, nearest support lies at 5700; should the index trade there, this would have also filled a May 12^th gap. After this lies the 50-day at 5605.

Euro: Currently net long 79.5k, up 5k.

There was something for both bulls and bears this week. The euro dropped 0.2 percent to $1.1347, reasserting the downward momentum since tagging $1.1573 on 21 April. The euro has now dropped in five of the last six weeks. Bulls, however, can take solace in the fact that the currency was down to $1.1211 on Wednesday, and that weakness was bought.

Wednesday’s drop drew buying interest just above the 50-day (now $1.12), which was successfully tested on the 12^th (this month), and at horizontal support at $1.12; the euro has been above the average since early March. Bulls deserve the benefit of the doubt as long as this support is intact.

Gold: Currently net long 174.2k, up 10.2k.

Last week, gold closed right at trendline resistance emanating from 22 April when a fresh all-time high of $3,500 was posted, followed by a lower high of $3,439 on the 6^th this month. Last Friday’s intraday high of $3,366 now constitutes a second lower high. This week, the metal gave back 2.1 percent to $3,289/ounce, with a weekly high of $3,350 coming in on Monday.

In the event this resistance continues to hold its ground, it is only a matter of time the 50-day at $3,223 gets violated. The last time gold closed below the average was 7 January this year. In this scenario, lateral support at $3,160s holds importance.

Nasdaq (mini): Currently net long 17k, up 2.5k.

If tech bulls were able to hang on to Thursday’s intraday high of 21612, they would have comfortably taken care of short-term straight-line resistance at 21400s, but they could not pull that off. They did, however, show up on Friday, rallying the Nasdaq 100 from down 1.6 percent at session low to down 0.1 percent.

Earlier, from the February 19^th all-time high of 22223 through the April 7^th trough of 16542, the tech-heavy index promptly tumbled 25.6 percent. Then, from that low through this Wednesday’s high, the index was up 30.6 percent.

Longs obviously are sitting on a lot of gains. Ideally, they would love to go test the February high. For that to happen, they should recapture 21400s as soon as possible. Else, momentum can quickly reverse the other way.

The 200-day rests at 20366, and the 50-day at 19741.

Russell 2000 mini-index: Currently net short 4.5k, down 1.3k.

Dual resistance at 2100 continued to act as a roadblock for small-cap bulls. On both Tuesday and Wednesday, the Russell 2000 traded in the 2090s intraday but failed to break out. In the end, it rallied 1.3 percent for the week to 2066.

The significance of 2100 goes back to January 2021. Most recently, the horizontal support was breached nearly three months ago, in early March. Just above 2100 also lies trendline resistance from 25 November last year when a new all-time high of 2466 edged past the prior high of 2459 from November 2021.

It is approaching a make-or-break moment for the index. In the sessions ahead, either it breaks out of 2100 or it drops out of a rising trendline from April’s low; Tuesday’s intraday low of 2058 just about tested this support – successfully. More tests lie ahead next week.

US Dollar Index: Currently net short 86, down 460.

Dollar bulls rallied the US dollar index 0.2 percent this week to 99.33 but were unable to reclaim 100, with Thursday rallying as high as 100.54 intraday but only to reverse hard to finish the session with a bearish marubozu candle. This was the fifth week in the last eight that the index closed sub-100.

Earlier, the index dropped from 110.18 on 13 January to 97.92 on 21 April. That low is now worth a watch. A breach opens the door to a test of trendline support just north of 96 from May 2011.

VIX: Currently net short 5.8k, up 10.2k.

Last Friday, the daily RSI had an opportunity to push back above 50 but came up short, as VIX reversed at the 50-day, leaving behind a long upper wick. This week began with Tuesday’s breach of the 200-day (19.56), with failed intraday attempts on Thursday and Friday to reclaim the average. For the week, VIX gave back 3.72 points to 18.57. In the last eight weeks, there has only been one up week. On 7 April, the volatility index printed 60.13 before turning lower.

Just underneath, around 17.50, lies trendline support from July last year. It is a must-hold should VIX decide to test that support in the sessions ahead.

Thanks for reading!

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