Following futures positions of non-commercials are as of May 13, 2025.

10-year note: Currently net short 890.4k, down 62.8k.

The good thing is that the US has lowered tariffs on Chinese goods from 145 percent to 30 percent, even as Chinese tariffs on US goods have gone down to 10 percent from 125 percent. The bad is that the agreement only lasts for 90 days and that 30 percent is no chump change. Even worse, the uncertainty around what will happen after the pause ends lingers on. The stop and go nature of these tariffs probably does not incentivize businesses to plan capex, hiring, etc.

In the meantime, futures traders responded to the new tariff arrangements by cutting probabilities of 25-basis-point cuts in the fed funds rate this year from four as of last Friday to two as of this Monday. The next expected easing does not occur until the September (16-17) meeting; rates are expected to stay steady at a range of 425 basis points to 450 basis points in June (17-18) and July (29-30). The last cut took place last December.

For now, markets – both equity and fixed income – are also betting that the pause essentially removes the recession risk. It is, however, risky to completely write off recession odds, given that the prevailing uncertainty has not completely gone away. This likely gets clearer as the end of the 90-day pause gets closer. Any amount of tariffs – 10 percent, 20 percent, 30 percent, or whatever – is nothing but a tax on the US consumer, unless either the exporters decide to bear the cost or the importers take a margin hit. The money raised in tariffs comes out of consumers’ pockets, which means they will have to adjust their spending by cutting somewhere else.

30-year bond: Currently net short 77.6k, down 18.2k.

Major US economic releases for next week are as follows.

Thursday brings existing home sales (April). Sales dropped 5.9 percent month-over-month in March to a seasonally adjusted annual rate of 4.02 million units – a six-month low.

New home sales (April) are scheduled for Friday. March sales increased 7.4 percent m/m to 724,000 units (SAAR) – a six-month high.

WTI crude oil: Currently net long 196.4k, up 6.7k.

West Texas Intermediate crude continues to go sideways under breached horizontal support at $65-$66, which was decisively lost six weeks ago with a daily gap-down. Since that support violation, the crude proceeded to drop to an intraday low of $56.06 by 9 April before reversing sharply higher by session close.

This week, WTI added 2.4 percent to $62.49/barrel. Momentum will pick up speed once oil bulls are able to recapture $65-$66. Until then, consolidation after a decent decline should be considered heathy. Four months ago, the crude ticked $79.39 and headed lower.

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 9^th increased 20,000 barrels per day week-over-week to 13.387 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 215,000 b/d to 5.8 mb/d. As did stocks of gasoline and distillates – down one million barrels and 3.2 million barrels respectively to 224.7 million barrels and 103.6 million barrels. Crude inventory, however, rose 3.5 million barrels to 441.8 million barrels. Refinery utilization increased 1.2 percentage points to 90.2 percent.

E-mini S&P 500: Currently net short 122.2k, up 45.8k.

In the week to March 18^th, non-commercials were net long 68,311 contracts. As of this Tuesday, this has now reversed to net shorts of 122,194 contracts. The cash bottomed at 4835 on 7 April, down 21.3 percent from the all-time high of 6147 posted on 19 February, and throughout this, these traders have been gradually adding to their bearish bias. As things stand, they may have to wait a little before this trade begins to pay off.

From the early-April bottom through Friday’s close (5838), the S&P 500 has rallied 23.2 percent. February’s high is 3.2 percent away. Odds strongly favor that equity bulls will go after this in the sessions to come. What transpires at the old high will be telling. By then, the weekly is likely to enter overbought territory, with the daily already way extended.

Euro: Currently net long 84.8k, up 9.1k.

The euro has come under pressure since tagging $1.1573 on 21 April. This Monday, it ticked $1.1066, which successfully tested the 50-day moving average (now $1.111). But rally attempts Tuesday met with selling pressure as the currency ticked $1.1266.

Last September, on the 30^th, the euro reversed lower after facing rejection at $1.12 for six consecutive weeks. It stabilized early this year around $1.02s, reclaiming $1.12 on 10 April and losing it 10 May.

A failed breakout retest at $1.12 this week raises the odds of continued downward pressure and a compromised 50-day. In this scenario, there is horizontal support at $1.09.

Gold: Currently net long 161.2k, down 1.3k.

Non-commercials have been reducing net longs for seven months, with this week’s holdings the lowest since February last year. Gold has gone the other way, particularly since December 30^th last year when it ticked $2,608. On 22 April, the metal ticked a fresh new intraday high of $3,500 but only to finish with a long upper wick on the weekly.

This week, gold shed 3.6 percent to $3,204/ounce. The 50-day ($3,163) was tested later in the week, with Thursday dropping as low as $3,121 intraday but closing higher by close. This also successfully tested horizontal support at $3,160s, although this likely gets breached soon.

The weekly has just begun to come under pressure. Assuming downward momentum persists, there is support at $3,050s and then $2,950s.

Nasdaq (mini): Currently net long 19.5k, down 13.3k.

From the February 19^th all-time high of 22223 through the April 7^th trough of 16542, the Nasdaq 100 quickly tumbled 25.6 percent. Then, in the next six weeks, it shot back up 29.5 percent. The February high is 3.7 percent away.

Yes, the index remains way overbought, with the daily RSI (71.67) having just entered the 70s. Yet, in the current circumstances, it only makes sense for tech bulls to go after its all-time high and see what follows.

Russell 2000 mini-index: Currently net short 28.4k, up 13.5k.

The significance of 2100 on the Russell 2000 goes back to January 2021. Most recently, it was breached nearly two and a half months ago, in early March. This week, as soon as the week began, small-cap bulls went after this hurdle, straddling the level all week and managing to close the week at 2113, up 4.5 percent. This does not represent a decisive break, but the bulls will take it. If they can maintain the recent positive momentum, just above 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. The index then went on to lose 29.7 percent through the April 9^th low this year of 1733. For nearly two years through December 2023, the Russell 2000 was rangebound between 1700 and 1900 before breaking out.

Should the trendline resistance give way, the index has a shot at 2170s-2200.

US Dollar Index: Currently net short 615, down 493.

Dollar bulls were unable to cling on to all of the gains this week, having rallied the US dollar index as high as 101.98 yet closing at 101.09, still up 0.8 percent. This was the fourth straight up week.

The index peaked on 13 January at a two-plus-year intraday high of 110.18 before dropping the next three months to bottom at 97.92 on 21 April. The index obviously remains below the average, which likely gives away in the sessions to come.

The level to watch is 103-104, which goes back to December 2016. The support was lost early April. The 200-day at 104.24 lies around there.

VIX: Currently net long 6.1k, down 4.8k.

Options are beginning to reflect elevated optimism. In three of the five sessions this week, the CBOE equity-only put-to-call ratio registered sub-0.50 readings, with the 21-day moving average ending the week at 0.52.

In VIX futures, non-commercials are now net long for three consecutive weeks – and in four out of the last nine weeks. When they first went long – in the week to March 18^th – volatility was getting ready to jump. Jump it did, with VIX tagging 60.13 on 7 April. The reversal since has been as dramatic. The volatility index has now dropped for six weeks in a row, closing Friday at 17.24.

Downward momentum is strong, and VIX is yet to show signs of stability.

Thanks for reading!

More By This Author:

Equity Futures Strong
Commitment Of Traders - Futures Positions Of Noncommercials
Amidst Tariff Repercussions Increasingly Evident, Oversold S&P 500 Rallies Into Overbought