Following futures positions of non-commercials are as of January 14, 2025.10-year note: Currently net short 567.9k, down 104.5k.
The 10-year treasury yield reached five percent (4.997 percent, to be precise) in October 2023 before coming under pressure. Last September, these notes were yielding 3.6 percent.This Tuesday, the 10-year ticked 4.81 percent intraday in a doji session. It is possible a lower high – versus the October 2023 print – is in place for at least the foreseeable future. This week, rates declined 17 basis points to 4.61 percent, with Friday touching 4.57 percent at the session low.Ahead, there is horizontal support at 4.5 percent, and this is where a genuine tussle between bond bulls and bears is likely to unfold. After that lies crucial support at 4.3s.30-year bond: Currently net long 52, up 16.9k.
Major US economic releases for next week are as follows. (Markets are closed Monday for observance of Martin Luther King, Jr. holiday.Existing home sales (December) and University of Michigan’s consumer sentiment index (January, final) are on schedule for Friday.November sales of existing homes firmed up 4.8 percent month-over-month to a seasonally adjusted annual rate of 4.15 million units – an eight-month high.January’s preliminary reading showed consumer sentiment dropped eight-tenths of a point m/m to 73.2. Last March’s 79.4 was the highest since July 2021.WTI crude oil: Currently net long 316.9k, up 9.1k.
Having just about gone parabolic post-Christmas, with an intraday tag of $69.33 on December 26, West Texas Intermediate crude ran out of steam this Wednesday ticking $79.39. It still managed to rise 1.1 percent this week to $77.39/barrel. This was the fourth consecutive weekly increase.The daily is itching to head lower. For months, the crude was rangebound between $71-$72 and $81-$82 before dropping out of it last September. The range was recaptured as soon as 2025 began. Now, the range top is drawing sellers.The 200-day moving average, which was reclaimed six sessions ago after remaining under it for five months, lies at $75.19.In the meantime, US crude production in the week to January 10 decreased 82,000 barrels per day week-over-week to 13.481 million b/d; output has come under pressure since registering a record 13.631 mb/d in the week to December 6. Crude imports, too, decreased 304,000 b/d to 6.1 mb/d. As did crude inventory which fell two million barrels to 412.7 million barrels. Stocks of gasoline and distillates, on the other hand, went the other way – respectively up 5.9 million barrels and 3.1 million barrels to 243.6 million barrels and 132 million barrels. Refinery utilization shrank 1.6 percentage points to 91.7 percent.E-mini S&P 500: Currently net short 30.5k, down 31.7k.
Equity bulls had a huge week, rallying the S&P 500 index 2.9 percent to 5997, but more work lies ahead as the large cap index closed on dual trendline resistance.The S&P 500 peaked on December 6 (last year) at 6100. A falling trendline from that high has persistently stopped rally attempts. This Monday, the index bottomed at 5773; by then, it was down 5.4 percent from last month’s high. In Friday’s doji session in which it rallied one percent, the 50-day was recaptured but not the trendline in question. Concurrently, the index finished right on a broken trendline from last August’s low.This will be a test of bulls’ mettle in a holiday-shortened next week. The daily has room to head higher, but at the same time bears will be seeking to defend the aforementioned dual trendline resistance.Euro: Currently net short 60.4k, down 3.7k.
The euro dropped as low as $1.0178 on Monday before drawing some bids. It managed to rise 0.25 percent for the week to $1.0272. This was the first up week in seven – second in 11 and third in 16.The currency fell sharply starting September 30 (last year) after facing rejection at $1.12 for six consecutive weeks.There is massive resistance at $1.05. Immediately ahead, euro bulls will be tested at $1.03. Inability to rally and reclaim this hurdle, coupled with a breach of Monday’s low, will open the door toward parity, and maybe even lower. The last time this happened was the latter months of 2022 when the euro bottomed at $0.9538 in September.Gold: Currently net long 279.4k, up 24.5k.
Gold has rallied the last three weeks, with this week adding 1.2 percent to $2,749/ounce. This brings the metal to an important juncture, as $2,750s has seen a genuine bull-bear duel the past three months. Last October, gold did proceed to rally past this level and tag $2,802 – a record – on the 30th, but only to then soon lose momentum. By November 14, gold was down to $2,542, before rallying. A rising trendline from that low extends to $2,640s, which is the line in the sand should gold bugs fail to reclaim $2,750s and the yellow metal comes under pressure. After this, other support levels include $2,540s-50s and $2,440s-50s.Nasdaq (mini): Currently net long 10.5k, down 8.2k.
Tech bulls were able to defend 20500s on the Nasdaq 100 as soon as the week began, with Monday’s intraday tag of 20538. By the end of the week, the index closed up 2.85 percent to 21441.The tech-heavy index peaked at 22133 on December 16, and a falling trendline from that high has persistently stopped rally attempts. This week, the Nasdaq 100 closed right on that hurdle. At least on the daily, the index can continue rallying provided the resistance in question gives way.Russell 2000 mini-index: Currently net short 1.1k, down 2.1k.
Last week’s downward momentum continued this Monday as the Russell 2000 touched 2159 intraday but this was used as a buying opportunity by small-cap bulls as this was an essential test of the 200-day at 2167. The last time the average was successfully tested was August last year when the index tagged 1993 and reversed higher.So far so good, this time around. For the week, the index added four percent to 2276, which is just slightly ahead of horizontal resistance at 2260s, which goes back to mid-July and has since attracted both bulls and bears. A decisive takeout of this resistance will expose the index to 2300, wherein lies a falling trendline from November 25 (last year) when the Russell 2000 reached a new intraday high of 2466, just edging past the prior high of 2459 from three years ago.US Dollar Index: Currently net long 12.7k, up 4.1k.
Non-commercials’ net longs rose to an 18-week high this week. The US dollar index has had a massive rally since September 27 when it bottomed at 99.86, after having gone sideways just under 100 for several sessions.This week, the index shed 0.3 percent to 109.20, but not before tagging 110.02 intraday Monday. The resulting spinning top was only the second down week in 16. Odds favor the index is ready for a breather.Immediately ahead, there is horizontal support at 108, followed by the 50-day at 107.21.VIX: Currently net short 26.7k, down 4.3k.
VIX has been unable to penetrate – sustainably – 23 since October 2023. Early August (last year), it did spike to 65.73 intraday before reversing sharply lower.This week, volatility bulls were unable to hang on to Monday’s intraday print of 22.04. By Friday, VIX gave back 3.57 points for the week to 15.97. Inability to save 15.53, which was Friday’s low, next week will raise the odds the volatility index wants a 14 handle.Thanks for reading!More By This Author:Even Before Friday’s Jobs-Induced Selloff, Sellers Showed Up Last Week At Important Technical Resistance On Major Equity Indices
Equity Indices Itching To Move Higher N/T
VIX Spike Reversal Last Week Probably Suggests Lower Volatility In Sessions Ahead
