Following futures positions of non-commercials are as of Aug 12, 2025.

10-year note: Currently net short 942.2k, down 17.6k.

Minutes for the July 29-30 FOMC meeting are due next Wednesday. Despite repeated demands for lower short rates by President Donald Trump, the fed funds rate was left unchanged between 425 basis points and 450 basis points in that meeting, with dissenting votes from Governors Christopher Waller and Michelle Bowman. After the weaker-than-expected jobs report for July and sharp downward revisions for May and June, Bowman is now asking for three 25-basis-point cuts this year. Both Bowman and Waller are on the short list of candidates to potentially succeed Chairman Jerome Powell, whose term ends next May. Powell and his team are under tremendous pressure to ease next month (16-17). In the futures market, a cut is just about guaranteed. Some signal to this effect might come from next week’s Jackson Hole Symposium, where Powell is due to speak on Friday.

The Fed has a dual mandate – maximum employment and price stability. While the call to singlehandedly focus on the employment mandate is getting louder, the central bank is not able to completely lose sight of inflation. In July, both consumer and producer prices were anything but well contained. In the 12 months to July, headline and core consumer prices, for instance, rose 2.7 percent and 3.1 percent respectively, which were both at five-month highs. On an annual basis, July headline wholesale prices increased 3.3 percent, which is the biggest 12-month move since February. Producer prices can provide important information on pipeline prices.

Tariffs are creating confusion and uncertainty. There are two primary issues. (1) Who pays – the importer, the exporter or the consumer, or a combination of the three? (2) Not a whole lot is passing through the system currently, but it may be coming. Companies hoarded goods in expectation of tariffs, resulting in inventory buildup. These stocks are sitting in warehouses and distribution centers. At some point, they will be passing through the system. Producers thus far seem to be absorbing most of the tariff costs. This obviously amounts to a hit to their margins – particularly those businesses that face price-sensitive customers; low-margin businesses from this perspective are in a real pickle.

With this as a background, those calling for a 50-basis-point cut next month will most certainly be disappointed. Besides, between now and the September meeting, there are two more important datapoints – July’s PCE (personal consumption expenditures) on the 29^th and August’s payrolls on the 5^th, and they will sway opinion. In the futures market, traders, which at one time were betting on three cuts this year, reduced their expectations to two in the wake of July’s CPI and PPI numbers.

30-year bond: Currently net short 60.8k, down 49.6k.

Major US economic releases for next week are as follows.

The NAHB housing market index (August) is on schedule for Monday. Homebuilder confidence in July rose a point from June’s 30-month low to 33.

Housing starts (July) are due out Tuesday. Starts in June increased 4.6 percent month-over-month to a seasonally adjusted annual rate of 1.32 million units – a two-month high. May’s 1.26 million set a five-year low.

Thursday brings existing home sales (July). June sales were down 2.7 percent m/m to 3.93 million units (SAAR) – a nine-month low.

WTI crude oil: Currently net long 111.9k, down 27.6k.

It looks like non-commercials have just about given up, reducing net longs to a 15-year low. West Texas Intermediate crude, meanwhile, unsuccessfully tried to reclaim, or stay above, the 200-day ($67.67) for several weeks, before the average was decisively lost on the 1^st this month; this was followed by a breach of the 50-day ($66.83) in the very next session. Now, the crude, down 1.3 percent this week, is substantially below the averages. It is also below crucial horizontal support at $65-$66 which was compromised last week.

In April, WTI went from $72.28 on the 2^nd to $56.06 on the 9^th. This week, it fell as low as $61.94 intraday Wednesday but recovered to finish the week at $63.14/barrel. There is room to rally on the daily; in the event the crude comes under upward pressure, $65-$66 is bound to offer major resistance.

In the meantime, US crude production in the week to August 8^th increased 43,000 barrels per day week-over-week to 13.327 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 rose as well, up 958,000 b/d to 6.9 mb/d. As did stocks of crude and distillates, which respectively grew three million barrels and 714,000 barrels to 426.7 million barrels and 113.7 million barrels. Gasoline inventory, however, declined 792,000 barrels to 226.3 million barrels. Refinery utilization dropped five-tenths of a percentage point to 96.4 percent.

E-mini S&P 500: Currently net short 192.1k, up 52.4k.

Equity bulls enjoyed yet another breakout this week, but it was hardly convincing. Going into this week, the S&P 500 faced difficulty at 6390s for three weeks. The hurdle gave way on Tuesday. This was then followed by short-term resistance at low-6480s in the next three sessions, even as bids were showing up at low-6440s. For the week, the large cap index finished up 0.9 percent to 6450, with Friday ticking 6481.

The S&P 500 has now rallied in six of the last eight weeks. Before that, on 7 April, it bottomed at 4835. Both the daily and weekly remain extremely overbought. Non-commercials, with net shorts at a 17-month high, are beginning to bet on likely unwinding of these conditions.

Once 6440s and 6390s yield, there is crucial horizontal support at 6100s. In late June, the index broke out of this price point, and a genuine retest is yet to occur. This is a make-or-break for the bulls.

Euro: Currently net long 115.4k, down 528.

The euro rallied 0.5 percent this week to $1.1705 but remained bound by trendline resistance from July’s high when it tagged $1.183 on the 1^st. Wednesday’s high of $1.173 kissed that resistance, and it held, although the currency is not that far away from that hurdle.

The 50-day is at $1.164, just above horizontal support at $1.16, a decisive breach of which should open the door toward $1.12; the currency broke out of $1.12 in April, where it had faced decent resistance last August and September.

Early this year, the euro bottomed around $1.02s, hence has come a long way. The daily is beginning to get overbought.

Gold: Currently net long 229.5k, down 7.6k.

Gold, down 1.9 percent this week to $3,336/ounce, straddled the 50-day all week, finishing the week just under the average ($3,349).

Since it reached a fresh all-time high of $3,500 on 22 April, gold has made several lower highs. Concurrently, it has made higher lows since mid-May when it ticked $3,121 intraday. As a result, a symmetrical triangle has been formed. These triangles tend to be neutral but can also represent a continuation pattern, in which case the metal wants higher prices. The metal had been rallying since it ticked $2,608 on 30 December.

Since the April peak, $3,200 has repeatedly found buyers. Gold bugs deserve the benefit of the doubt if this remains the case. The upper trendline in question gets tested at $3,420.

Nasdaq (mini): Currently net long 42.3k, up 8.5k.

The Nasdaq 100 continued its recent positive momentum, but the move was tentative at best. At Wednesday’s intraday fresh high of 23969, the tech-heavy index was up 1.5 percent, but this was reduced to up 0.4 percent by the time the week wound down, to 23712. This resulted in a weekly spinning top. This is a candle the bears are likely to try to take advantage of in the sessions to come. There was a similar opportunity two weeks ago when a bearish engulfing candle appeared on the weekly, but nothing came out of it.

Having bottomed at 16542 on 7 April, the Nasdaq 100 has come a long way and remains overbought. Nearest support lies at 22900s, with the 50-day at 22744. In the event the index begins to come under pressure, non-commercials will have a decision to make, as they are sitting on net longs that are at a five-year high.

Russell 2000 mini-index: Currently net short 95.2k, up 1.5k.

The Russell 2000 suffered yet another false breakout this week. Early this year, in January and February, it has had several brushes with 2300, or just north of it. They were unsuccessful, and the downward momentum that followed culminated in a drop that would only bottom at 1733 on 9 April. For both bulls and bears, 2300 has proven to be an important price point going all the way back to February 2021.

This week, the small cap index had a strong Tuesday and Wednesday, tagging 2329 intraday, but, as in the past, hanging on to it proved difficult. By the end of the week, it closed at 2287, up 3.1 percent.

The index remains near 2300, but the daily is itching to go lower. There is horizontal support at 2200, followed by crucial breakout retest at 2100, which has not been tested in earnest since June.

Importantly, unlike large-cap indices such as the S&P 500 and the Nasdaq 100, which are both at/near new highs, the Russell 2000 remains way below last November’s intraday high of 2466, which edged past the prior high of 2459 from November 2021.

US Dollar Index: Currently net short 6.2k, down 783.

Wednesday through Friday, the US dollar index drew bids at trendline support from July. Down 0.3 percent this week to 97.86, it closed right at that support, unable to clear the 50-day at 98.13. If broken, risks rise that the index gravitates toward the July lows (96.38 on the 1^st and 97.11 on the 24^th). Most importantly, around 97 lies crucial trendline support going back to the lows of April and May of 2011.

The index peaked at 110.18 in January and early this month had trouble recapturing 100-101, which goes back some four decades. For a sustainable move higher, dollar bulls need to push through this level. As things stand, an oversold daily can help them.

VIX: Currently net short 83.1k, down 3.3k.

Volatility seems ready to perk up. 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. This week, the volatility index dropped as low as 14.30 on Wednesday and 14.40 on Friday before ending the week at 15.09, up 0.4 percent. Right here and now, this support is unlikely to give way.

Support for volatility bulls could come from non-commercials who are neck deep in net shorts, with the 86,472 contracts as of the 5^th the highest since September 2022. They reduced their holdings in the latest week, but just by a tad. Should they end up covering, VIX can come under upward pressure.

Thanks for reading!

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