Following futures positions of non-commercials are as of July 22, 2025.

10-year note: Currently net short 749.5k, down 22.8k.

The Federal Open Market Committee (FOMC) meets next week. The two-day (Tuesday-Wednesday) affair will be the fifth scheduled meeting this year, and three more remain after this – in September, October and December.

Going into this, interest-rate traders do not expect a cut in next week’s meeting. They have, however, priced in a 25-basis-point easing in September and then another in December, ending the year at a range of 375 basis points to 400 basis points. The fed funds rate has remained unchanged between 425 basis points and 450 basis points since last December, when the policy-setting body went into a hold mode after cutting the benchmark rates by a full percentage point over three meetings.

Even though no cut is expected next week, it will be interesting to see if Chair Jerome Powell gives a wink and a nod that a cut is coming soon. He is under tremendous pressure from the Donald Trump administration to lower the rates. President Trump would like the fed funds rate brought all the way down to one percent, while also arguing that economic growth is robust. The economy indeed is holding up just fine, although signs of deceleration are there. This begs the question the logic behind calls for aggressive rate cuts.

Powell’s term ends next May. Despite Trump’s threat to fire him and others’ repeated calls for his resignation, Powell probably will complete his tenure. He should, if nothing else just to maintain the independence of the Federal Reserve. Powell has maintained all along that his firing is “not permitted under the law.” One such astray call for resignation came this week from – of all people – Mohamed El Erian, who at one time led PIMCO, one of the largest investment managers.

If Powell resigns, he would be doing so under pressure. This will not preserve Fed independence, rather compromise it. Deep down, Trump Cabinet members such as Scott Bessent, treasury secretary, and Howard Lutnick, commerce secretary, because of their prior careers in finance and investment, must be aware of the significance of an independent central bank.

More worrying is the signal the current noise is perhaps sending to the next chair coming in. At least from Trump’s eyes, that person is expected to aggressively ease. In absence of that, jawboning likely continues. Trump is a politician, and no wonder he would want a booming economy under his watch. Central bankers do not – and should not – always see things that way. They have a dual mandate of price stability and maximum employment. Markets hope the new Fed chair will only be driven by that goal, no matter how much the pressure from the White House and the Congress.

30-year bond: Currently net short 82.9k, down 47.3k.

Major US economic releases for next week are as follows.

On Tuesday, the S&P Case-Shiller home price index (May) and job openings (JOLTs, June) are on tap.

In April, home prices nationally increased 2.7 percent from a year ago. This was the smallest year-over-year price appreciation in 20 months.

In May, non-farm job openings jumped 374,000 month-over-month to 7.8 million – a six-month high. The series peaked at 12.1 million in March 2022.

GDP (2Q25, advance estimate) is scheduled for Wednesday. In the March quarter, real GDP dropped at an annual rate of 0.5 percent. This was the first time in three years the economy dipped into negative territory.

The employment cost index (2Q25) and personal income/spending (June) will be out Thursday.

Private-industry total compensation in 1Q25 grew 3.4 percent from a year ago – a 15-quarter low.

In the 12 months to May, headline and core PCE (personal consumption expenditures) rose 2.3 percent and 2.7 percent respectively. In June and February of 2022, they respectively peaked at four-decade highs of 7.3 percent and 5.7 percent.  

Friday brings payrolls (July), the ISM manufacturing index (July) and University of Michigan’s consumer sentiment index (July, final).

In the first six months this year, non-farm payroll grew at a monthly average of 130,000. This compares with the average last year of 168,000, and 216,000 and 380,000 in 2023 and 2022 before that.

Manufacturing activity in June rose five-tenths of a percentage point m/m to 49 percent. This was the fourth consecutive month of contraction after two months of expansion preceded by 26 months of contraction.

June consumer confidence grew 1.1 points m/m to 61.8. In both April and May, confidence dropped to 52.2, which was the lowest since July 2022.

WTI crude oil: Currently net long 137.6k, down 4.3k.

After last Friday’s rejection at the 200-day moving average ($68.17), this week began with Monday’s gap-down; by Friday, the 50-day ($66.51) was breached, with West Texas Intermediate crude down 3.4 percent for the week to $65.07/barrel.

The crude finished the week at the low end of crucial horizontal support at $65-$66. In April, WTI went from $72.28 on the 2^nd to $56.06 on the 9^th, with $65-$66 falling prey to a gap-down. This is a must-hold for oil bulls.

In the meantime, US crude production in the week to July 18^th decreased 102,000 barrels per day week-over-week to 13.273 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 declined as well, down 403,000 b/d to six mb/d. As did stocks of crude and gasoline, which respectively dropped 3.2 million barrels and 1.7 million barrels to 419 million barrels and 231.1 million barrels. Distillates inventory, however, rose 2.9 million barrels to 109.9 million barrels. Refinery utilization grew 1.6 percentage points to 95.5 percent.

E-mini S&P 500: Currently net short 168.5k, up 703.

Yet again, the S&P 500 staged a breakout to a new high – this time out of 6300, or just below that. The large cap index was up in all five sessions this week, up 1.5 percent for the week to 6389, with a new intraday high of 6396 on Friday.

The index is now up in four of the last five weeks. In late June, it bolted out of 6100s and has not looked back since; this was an important breakout and is yet to be meaningfully retested. In the meantime, from the April 7^th low of 4835, the S&P 500 is up a whopping 32.1 percent, more than erasing the 21.3-percent decline between 19 February and 7 April.

These are massive gains coming in less than four months. Once profit-taking begins, downward momentum can build up quickly. This has not happened as yet. Current momentum is strong, with the daily RSI at 76.21, although on the weekly it has not hit 70 since last July. Amidst all this, the daily Bollinger bands are narrowing; when this happens, a sharp move – either up or down – can follow; with the index having rallied massively the last four months, should there be a sharp move, odds favor it will be to the downside.

Euro: Currently net long 125.5k, down 2.7k.

Euro bulls have so far managed to defend $1.16, which the currency broke out of a month ago. On Tuesday through Thursday last week, the euro traded sub $1.16 intraday but only to rally back above by close. This week, the support was tested Monday – successfully. By Thursday, the euro tagged $1.1789 intraday, closing the week at $1.1742, up one percent for the week.

Early this year, the euro bottomed around $1.02s. On 1 July, it ticked $1.183 and headed lower; this could prove to be an important high, time will tell.

A decisive breach of $1.16 opens the door toward $1.12, which the euro broke out of in April and where it had faced decent resistance last August and September.

Gold: Currently net long 253k, up 39.9k.

Non-commercials’ net longs jumped 19 percent in the latest week to an 18-week high. Gold began this week with a strong Monday and Tuesday, with the positive momentum continuing early on Wednesday but only to then reverse lower at a crucial level.

The yellow metal posted a fresh all-time high of $3,500 on 22 April. Since then, $3,200 has repeatedly found buyers, even as a lower high of $3,462 was set on 16 June. Wednesday’s intraday high of $3,439 kissed this trendline and turned sharply lower; Thursday and Friday ended in the red as well, finishing the week down 0.4 percent to $3,337/ounce. The 50-day at $3,333 is right there, a likely breach of which can make gold vulnerable to a drop toward $3,200 – a must-hold for gold bugs.

Nasdaq (mini): Currently net long 30.7k, down 4.2k.

Of two of the Magnificent 7 stocks reporting this week, Google parent Alphabet (GOOG) rallied post-earnings but was unable to keep all of the gains, while Tesla (TSLA) gapped down. Next week, Microsoft (MSFT) and Facebook parent Meta (META) report Wednesday, while Apple (AAPL) and Amazon (AMZN) are due out on Thursday. Nvidia (NVDA) does not report until August 27^th as it is on a July quarter.

Heading into next week, the Nasdaq 100 continued to rally this week, up 0.9 percent to 23272, with a fresh intraday high of 23326 posted on Friday. This was the fourth up week in five. Five weeks ago, the tech-heavy index broke out of 22100s. From the low of 16542 on 7 April, it is now up 40.7 percent. Unreal!

If the four Mag 7 companies fail to excite the bulls next week, and the index sells off, nearest support lies at 22900s, followed of course by 22100s.

Russell 2000 mini-index: Currently net short 72.2k, down 423.

The Russell 2000 continues to struggle at 2300. The small cap index did add 0.9 percent this week to 2261, yet the bulls were unable to hang on to Wednesday’s intraday high of 2283. This was the third week in a row that sellers have appeared just under 2300.

The index has come a long way from an intraday low of 1733 on 9 April. It is currently clinging on to trendline support from that low, a breach of which is likely to result in a test eventually of major support at 2100.

US Dollar Index: Currently net short 3.5k, down 214.

After two up weeks following a dragonfly doji week bottom (96.38) on 1 July, the US dollar index gave back 0.8 percent this week to 97.67. Earlier, it declined from 110.18 in January this year.

The good thing from dollar bulls’ perspective is that bids showed up this week just north of 97, with Thursday tagging 97.11 intraday. Around 97 lies crucial trendline support going back to the lows of April and May of 2011. If this holds, the index can rally to unwind the oversold condition it is in.

VIX: Currently net short 50.6k, up 6.1k.

After four consecutive weeks of hovering just above 16 – weekly closes of 16.41, 16.40, 16.38 and 16.32 – VIX sliced through this support this week, down 1.48 points to 14.93. This has pushed the daily into oversold territory, with the weekly already there.

In January and February this year, VIX traded in 14.50s-14.70s for several sessions before turning up.

Thanks for reading!

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