Thursday's session leaned bearish as we expected. ES opened the RTH session near 6872, rallied to 6894 in the NY AM session, and then rolled over as WMT's full-year guidance came in well below expectations and the geopolitical headlines started hitting. Sellers pushed price down to 6851 during the PM session before settling near 6879. The Iranian military strike headlines (WSJ reporting Trump weighing a limited strike to force a nuclear deal) combined with four Fed speakers and weak guidance from the consumer bellwether created a risk-off cocktail that sent crude above $66 and kept equities under pressure throughout the afternoon.
Heading into Friday, ES has bounced off those lows and is now trading in the 6889 area during the overnight session. That bounce reclaimed the Pivot Point (6879) and is testing the PDH zone at 6894. The 4H oscillator has dropped from its overbought reading of 92 all the way down to 57, confirming the bearish rotation but still above the 50 midline. On the Daily, Thursday's RTH session printed a range of 6894 (high) to 6848 (low), closing near 6879. The weekly candle is currently showing O 6852.50, H 6925.75, L 6791.00 with a current close near 6889, forming a doji with a long upper wick that suggests indecision at best and rejection at worst. Friday is loaded with US macro data: Core PCE (the Fed's preferred inflation gauge) and GDP Advance at 08:30, S&P PMI Flash at 09:45, then UMich Sentiment and New Home Sales at 10:00. Two Fed speakers (Bostic at 09:45 and Logan at 12:45) add to the mix, plus a tentative Supreme Court opinion on tariffs at 10:00. This is a high-volatility setup with potential for sharp moves on the data. The big earnings catalysts are next week: HD on Monday at 6:00 AM and NVDA on Tuesday at 4:20 PM.
Technical Structure:
On the Daily, Thursday printed a bearish candle with the RTH range from 6894 to 6848, settling near 6879. Price closed below the 20-DMA at 6932.67 and 50-DMA at 6932.70, but the overnight bounce has pushed price back above the 5-DMA (6874.40) and is now testing the 100-DMA at 6884.87. So we are sitting right at that 100-DMA level which is a key decision point. Daily oscillator readings collapsed from the 83 overbought zone on Wednesday to 48.48, crossing below the 50 midline into bearish territory. The directional trend remains bearish with 9-Day ADX at 47.40 and -DI (23.46) well above +DI (8.50). The counter-trend bounce we warned about appears to be over, though the overnight bid back above the 5-DMA needs monitoring.
On the 4H, the structure has confirmed a bearish reversal. Price made a Lower High at 6925 (vs the previous HH near 7005), then broke through the 6860 support with a BOS (Break of Structure) to the downside. The 4H oscillator has fallen sharply from 92.62 to 57.73 and is still declining, with the green signal line rolling below the red. The equilibrium on the 4H sits near 6900, which means current overnight price at 6890 is approaching that equilibrium from below. Fib extensions from the recent swing: 1.618 at 6826.25 and 2.0 at 6806.00. If sellers maintain control during RTH Friday, these are the downside targets.
On the 1H, Thursday's RTH session showed a clear distribution pattern. Price rallied from the 6872 open to 6894 (NYAM High), then each bounce was met with lower highs: 6894, then 6880 (NY Lunch), then 6879 (NY PM). The sellers were in control all day with the BOS confirming around the 6857 NYAM Low level. The overnight bounce has pushed price back into the 6889 area, and the 1H oscillator will need to be watched for whether it can cross back above the 50 midline to signal a short-term shift.
Session levels for Friday: PDH 6894.50, PDL 6847.75, ONH 6912.50, ONL 6862.00, VWAP 6871.50, IB High 6894.50, IB Low 6857.00, Open 6870.75, Prior Close 6878.75, Y-VAH 6880.50, Y-POC 6871.50, Y-VAL 6857.50.
News & Sentiment Analysis:
The biggest story heading into Friday is the Iran military situation. WSJ reported that Trump is weighing an initial limited military strike to force Iran into a nuclear deal. The opening assault, if authorized, could come within days and would target a few military or government sites. If Iran still refuses to comply, the US would respond with a broader campaign, potentially aimed at toppling the Tehran regime. Iran's Foreign Minister responded that if subjected to military aggression, Iran will respond and all bases, facilities and assets of hostile targets will be targeted. However, there is also a diplomatic counterpoint: Iran says it has reached an understanding on main principles with the US. The UK is reportedly blocking Trump from using bases for strikes. This is a fluid situation that will dominate risk sentiment heading into the weekend, and the oil market is already pricing in some of the risk with crude at $66.61.
WMT's earnings were a mixed bag that leaned negative for sentiment. The headline EPS beat at $0.74 vs $0.73 expected, and US comparable store sales were solid at +4.6%. But the full-year guidance was the problem: EPS guidance of $2.75-2.85 came in well below the $2.97 consensus, and Q1 guidance of $0.63-0.65 also missed expectations of $0.68. For the world's largest retailer to lower guidance this aggressively speaks to the consumer headwinds ahead, tariff impact uncertainty, and the K-shaped economy narrative we've been tracking. This is not what bulls wanted to hear. HD reports Monday and NVDA Tuesday, so we will get more reads on the consumer and tech spending next week.
Thursday's Fed speaker lineup delivered a mixed but mostly cautious message. The key institutional analysis from the premium feed noted that the FOMC Minutes headlines about potential rate hikes were overblown. The word "several" in Fed language does not indicate a majority, and none of this year's voting FOMC members have remotely entertained serious hike talk. The Committee is in no rush to cut either: "several" participants indicated openness to easing only if inflation declines as expected, while "some" preferred holding steady. The recession probability stands at 20-25%, down from 30% in September. AI productivity gains assessment will be central to the Fed's thinking this year and next.
The capital flows picture continues to deteriorate. Foreigners trimmed US asset purchases, with Net Capital Flows dropping from $212B to $44.9B and Long-Term Transactions collapsing from $220.2B to $28.0B. Japan cut Treasury holdings to $1.186T (from $1.203T) and the UK to $866B (from $889B). This structural diversification away from US assets is consistent with the dollar weakness thesis.
Overnight into Friday, the Asia session brought some fresh data. Japan's Manufacturing PMI Flash came in strong at 52.8 vs 51.5 prior, showing continued expansion. The PBoC held rates unchanged at 3.0% (1yr) and 3.5% (5yr) as expected. RBNZ Governor Breman struck a dovish tone, expressing confidence that inflation will return to the 2% target midpoint over the next 12 months. China remains on holiday (CNY), keeping index volume thin. Australia's PMI data came in mixed with Manufacturing PMI easing to 51.5 from 52.3, Services PMI falling sharply to 52.2 from 56.3, and the Composite PMI declining to 52 from 55.7. New Zealand Trade Balance improved slightly to -$519M vs -$745M expected.
For the European session, UK Retail Sales MoM (forecast 0.2%) and German PPI MoM (forecast 0.3%) will set the tone. The main event is the PMI Flash data: French Manufacturing (forecast 50.9) and Services (forecast 49.2), German Manufacturing (forecast 49.5) and Services (forecast 52.4), and the Eurozone composites (forecast 51.5). These will be closely watched for any signs of European manufacturing recovery after months of weakness. Stronger PMI readings could support the Euro and reduce safe-haven dollar bids, indirectly lifting risk appetite.
Friday's US data calendar is massive. The main event is Core PCE at 08:30, the Fed's preferred inflation gauge. Forecast is 0.3% MoM and 2.9% YoY, both ticking higher from December's 0.2% and 2.8% respectively. A hot print would validate the hawkish FOMC Minutes tone and push rate cut expectations further out, pressuring equities. GDP Advance is also at 08:30 (forecast 3.0% vs 4.4% prior), along with Personal Income and Consumer Spending data that will paint the consumer picture alongside WMT's cautious guidance. At 09:45, the S&P PMI Flash readings (Mfg 52.3, Services 53) give us a real-time view of economic momentum, and Fed's Bostic speaks at the same time. Then at 10:00, a triple hit: UMich Sentiment Final (57.2), New Home Sales (0.73M), and a tentative Supreme Court opinion on tariffs that could blindside the market if it comes through. Fed's Logan speaks at 12:45 to close out the data storm. This is the kind of stacked calendar that can produce 30-40 point swings in ES within minutes.
On the energy side, EIA Natural Gas showed a draw of -144B vs -149B forecast. Crude oil remains the big story, with prices at $66.61 near their highest since August, driven entirely by Iran tensions. Trump reiterated that 50 million barrels of oil are coming from Venezuela to Houston, and oil and natural gas production are up. But the geopolitical premium is overpowering the supply picture. If a military strike materializes, crude could spike well above $70, which would amplify inflation concerns and put further pressure on equities through the energy channel.
In corporate earnings beyond WMT, EBAY reported strong Q4 results after Wednesday's bell: EPS $1.41 vs $1.35 expected, revenue $2.97B vs $2.87B consensus, and they announced the acquisition of Depop from Etsy for $1.2B in cash. Q1 guidance of $3.00-3.05B significantly exceeded the $2.79B estimate. AMD is backstopping a $300M Crusoe loan, with Crusoe using AMD chips as debt collateral, mirroring the NVDA approach. Looking ahead to next week, HD reports Monday (EPS $2.56, Rev $38.26B) as the next retail read after WMT's weak guidance, and then the main event: NVDA on Tuesday (EPS $1.53, Rev $65.8B). The AI capex narrative hinges on that number.
Trump's other comments from Thursday covered a wide range: praising private sector job gains, reiterating that Canada has ripped off the US for years, calling steel tariffs a game-changer, and noting that China drops subsidized products into the US market. His policy statement about making it harder to outsource and the EV sector reversal (which has triggered a $65B capital bleed from the EV sector) add to the trade and industrial policy uncertainty. The White House also proposed banning investors owning over 100 single-family homes from purchasing additional homes, which could have ripple effects through the real estate and REIT sectors. Indonesia sealed a trade deal with the US and agreed to send 6,000 troops to Gaza.
The institutional analysis on the dollar continues to point toward structural weakness. The greenback recovered from four-year lows near 95.50 to the 97.90 area, supported by the hawkish FOMC Minutes tone and safe-haven bid from Iran tensions. DXY at 97.90 overnight, up slightly. But the medium-term view remains for USD weakness driven by asset hedging flows diversifying away from US assets, capital rotation toward non-US markets, and rising risk premia with the Treasury curve steepening.
The K-shaped consumer narrative was reinforced by WMT's results. Productivity gains are flowing to corporate profits rather than labor income, meaning higher-income consumers remain resilient while lower-income households face mounting pressure. WMT's same-store sales at +4.6% show people are still spending, but the cautious full-year guidance suggests the management sees headwinds that the market has not yet priced in.
Options and positioning: The delta hedging requirement sits at $33.9B from Wednesday's data, with Vega at -$963.9M (dealers supplying volatility). On the gamma front, ATM gamma sits at 0.0013 for calls and 0.0012 for puts with implied volatility at 16.12%. The put skew is notable: ATM put IV (17.10%) trades a full point above call IV (16.06%) at the 6890 strike, reflecting demand for downside protection heading into the weekend. Theta decay at ATM is -2.55 for calls and -2.02 for puts, so time is working against premium holders. This gamma profile means dealers are not heavily positioned to amplify moves in either direction, but the put skew tells you where the hedging demand is concentrated. The Fear and Greed Index was at 43 (Fear) and likely dropped further with Thursday's selloff. Multi-indicator composite analysis sits at 24% Sell with Weakest direction. Last week it was 16% Sell and a month ago it was Hold, so the deterioration has been steady. The 20-Year bond auction from Wednesday was soft with a bid-to-cover of 2.360 vs 2.860 prior, though the high yield came in lower at 4.664% vs 4.846%. Japanese government bond yields are ticking down (10yr -2bps to 2.12%), suggesting some risk-off positioning in Asia.
Forecast:
• Overnight: ES has bounced from the 6871 open to the 6889 area in the early overnight session. Iran headlines remain the primary driver. Any escalation (strike confirmed) likely sends oil higher and equities lower. Diplomatic progress (deal talks advancing) would extend the bounce. China still on holiday, so Asian volume will be thin
• Morning Session: A data-heavy morning starts with European PMI Flash data (French 03:15, German 03:30, Eurozone 04:00), then shifts to a wall of US releases at 08:30: Core PCE (forecast 0.3% MoM, 2.9% YoY), GDP Advance (forecast 3.0%), Personal Income and Spending. A hot Core PCE print above 0.3% would reinforce the hawkish FOMC Minutes tone and pressure equities. A cool print gives bulls ammunition for a squeeze. At 09:45, S&P PMI Flash (Mfg 52.3, Services 53) and Fed's Bostic speaking simultaneously. At 10:00, UMich Sentiment Final (57.2), New Home Sales (0.73M), and a tentative Supreme Court opinion on tariffs. This is a volatile setup
• Afternoon: Fed's Logan speaks at 12:45, which could add to morning volatility. After the data storm clears, expect positioning into the weekend given Iran uncertainty. Traders may reduce risk into the close given the possibility of a military strike over the weekend
• Daily Close: Bias leans toward a cautious close. Weekend risk from Iran will keep buyers tentative, even if morning data is benign. If Core PCE comes in hot and the bounce fades at PDH resistance, expect a grind back toward 6860-6870. If data is cool, a squeeze toward 6910+ is possible but conviction will be limited ahead of the weekend
• Expected Range: 6810 to 6920 (based on 14-Day statistical range of ~89 pts centered around 6877 settlement)
• Most Likely Path: Early session tests the 6894-6910 resistance zone (PDH / R1 / 9-DMA). If rejected, expect a fade back toward the 6860-6870 VWAP/Y-POC area. A break above 6910 would target 6930+ (20/50 DMA). A break below 6845 opens the door to 6826 (1.618 Fib) and 6814 (Pivot S2)
Friday Events:
• 02:00 ET: UK Retail Sales MoM (Forecast: 0.2%), German PPI MoM (Forecast: 0.3%)
• 03:15 ET: French Manufacturing PMI Flash (Forecast: 50.9), Services PMI Flash (Forecast: 49.2)
• 03:30 ET: German Manufacturing PMI Flash (Forecast: 49.5), Services PMI Flash (Forecast: 52.4)
• 04:00 ET: Eurozone Manufacturing PMI Flash (Forecast: 50.0), Services PMI Flash (Forecast: 51.9)
• 08:30 ET: US Core PCE Price Index MoM (Forecast: 0.3%, Prior: 0.2%), Core PCE YoY (Forecast: 2.9%, Prior: 2.8%), PCE Price Index MoM (Forecast: 0.3%), GDP QoQ Advance (Forecast: 3.0%, Prior: 4.4%), GDP Price Index (Forecast: 2.8%), Personal Income MoM (Forecast: 0.3%), Consumer Spending MoM (Forecast: 0.3%)
• 08:30 ET: Canadian PPI MoM (Forecast: 0.15%), Core Retail Sales MoM (Forecast: -0.1%)
• 09:45 ET: US S&P Manufacturing PMI Flash (Forecast: 52.3, Prior: 52.4), Services PMI Flash (Forecast: 53, Prior: 52.7), Composite PMI Flash (Forecast: 53, Prior: 53.0)
• 09:45 ET: Fed's Bostic Speaks
• 10:00 ET: Supreme Court Opinion on Tariffs (Tentative)
• 10:00 ET: University Michigan Sentiment Final (Forecast: 57.2, Prior: 57.3), UMich 5 Yr Inflation Final (Forecast: 3.4%), UMich 1 Yr Inflation Final (Forecast: 3.5%)
• 10:00 ET: US New Home Sales (Forecast: 0.73M, Prior: 0.737M)
• 12:45 ET: Fed's Logan Speaks
• Ongoing: Iran military situation headlines, Trump policy updates
• Next Week: HD earnings Mon 6:00 AM (EPS: $2.56, Rev: $38.26B), NVDA earnings Tue 4:20 PM (EPS: $1.53, Rev: $65.8B)
Resistance:
• 6885-6895 - Target Price (6885.92) / 100-DMA (6884.87) / 50% Fib from 4-Week (6897.25) / PDH (6894.50) / IB High (6894.50) / 1 SD Resistance (6895.82). Current overnight battleground. Price is testing this zone right now. A sustained break above opens the door to the next level
• 6904-6912 - 9-DMA (6904.81) / 2 SD Resistance (6903.61) / 3 SD Resistance (6909.59) / Pivot R1 (6910.42) / ONH (6912.50). This is where Thursday's globex session topped out. Major resistance that needs volume to break
• 6926-6935 - MACD Stalls (6926.82) / 18-DMA (6931.57) / 38.2% Fib from 4-Week High (6931.65) / 40-DMA Stalls (6930.25) / 50-DMA (6932.70) / 20-DMA (6932.67). All short-term MAs converge here in a tight band. This is the line in the sand for the bears
• 6944-6975 - Stoch 70% (6944.52) / Pivot R2 (6943.83) / 9-DMA Stalls (6952.75) / Pivot R3 (6975.17) / Stoch 80% (6972.10). Deep upside targets, only in play if Iran deal materializes or major positive catalyst
• 7005-7043 - Previous Week High (7005) / 52-Week/1-Month High (7043). Not in play this week
Support:
• 6858-6871 - 1 SD Support (6858.18) / Y-VAL (6857.50) / IB Low (6857.00) / ONL (6862.00) / 38.2% Fib 13-Week (6867.28) / VWAP (6871.50) / Open (6870.75) / Y-POC (6871.50). First support zone, clustered with multiple session references and the VWAP. This held Thursday's afternoon selling
• 6844-6852 - 3 SD Support (6844.41) / Pivot S1 (6845.67) / PDL (6847.75) / 2 SD Support (6850.39). Second line of defense. A break below 6844 would confirm the bearish continuation
• 6826-6838 - %K Stoch Stalls (6837.69) / Stoch 30% (6834.23) / 3-10 MA Crossover Stalls (6831.46) / 1.618 Fib extension (6826.25). Next major support if 6845 breaks. This is the 4H downside target
• 6806-6814 - Pivot S2 (6814.33) / Stoch 20% (6806.65) / 2.0 Fib extension (6806.00) / 50% Retracement from 13-Week (6813.00). Deep support zone
• 6775-6791 - Pivot S3 (6780.92) / Last week's low (6791.00). If we reach here, the entire multi-week range is breaking down
How I'm seeing it:
• Bearish below 6910. Thursday confirmed what the technicals were screaming: the mid-week rally to the 6925 area was a counter-trend move, not a trend reversal. The bearish daily candle, the complete failure at the 20/50 DMA resistance zone, and the collapse back below the 5-DMA all point to renewed selling pressure. Multi-indicator analysis shifted from Hold last month to 16% Sell last week to 24% Sell now with Weakest direction, a steady deterioration
• The overnight bounce to 6889 is testing the 100-DMA (6884.87) and PDH (6894.50) resistance area. This is a make-or-break zone. If bulls can reclaim and hold above 6895, we could see a squeeze toward 6910-6930. If this is just a relief bounce that gets faded at the RTH open, the downtrend continues
• WMT's full-year guidance cut was a wakeup call. When the world's largest retailer is guiding below expectations on tariff uncertainty and consumer caution, that is not a backdrop for sustainable equity rallies. HD earnings Monday will either confirm or challenge this view
• Iran is the weekend wildcard. If a limited military strike materializes, Monday's open will gap significantly. Oil above $66 and rising is already pricing in some risk, but an actual strike would send crude much higher and equities sharply lower. This is a weekend risk that needs to be respected, and it will likely keep buyers cautious into Friday's close
• Data risk is high: Core PCE at 08:30 is the key. A hot print (0.4%+ MoM) would reinforce hawkish Fed expectations and likely break the overnight bounce immediately. A cool print (0.2% or below) would give bulls fuel for a squeeze through the 6910 resistance. GDP and UMich at 10:00 add additional volatility windows. The Supreme Court tariff opinion at 10:00 (tentative) is a true wildcard that could override all technical setups
• Downside scenario (favored): Overnight bounce gets faded at the 6894-6910 resistance zone during the RTH session. Sellers push price back through the Y-POC (6871) and target 6858-6845 (1SD/Pivot S1). A break below 6845 opens up 6826-6831 (1.618 Fib / Stoch Stalls) and then 6806-6814 (Pivot S2 / 2.0 Fib)
• Upside scenario: European PMIs beat expectations, Iran diplomatic progress, ES breaks above 6910 (Pivot R1 / ONH) and squeezes toward the 20/50 DMA wall at 6930-6935. This would just be a dead cat bounce within the broader downtrend unless we reclaim 6935+ on a closing basis
• Primary Setup: Short from 6894-6910 (PDH / Pivot R1 / 9-DMA / ONH zone), stop 6935 (above 20/50 DMA convergence), targeting 6845 (Pivot S1) then 6831 (1.618 Fib / Stoch Stalls)
• Key invalidation: A sustained move above 6935 (20/50 DMA wall) with conviction volume
Friday is a big data day with Core PCE, GDP, PMIs, UMich, and two Fed speakers all hitting before lunch. Add the Iran weekend risk and a possible Supreme Court tariff ruling, and this is not a day to be complacent. The real earnings action comes Monday and Tuesday with HD and NVDA, but Friday has more than enough catalysts to move price on its own.
Good Luck !!!
Heading into Friday, ES has bounced off those lows and is now trading in the 6889 area during the overnight session. That bounce reclaimed the Pivot Point (6879) and is testing the PDH zone at 6894. The 4H oscillator has dropped from its overbought reading of 92 all the way down to 57, confirming the bearish rotation but still above the 50 midline. On the Daily, Thursday's RTH session printed a range of 6894 (high) to 6848 (low), closing near 6879. The weekly candle is currently showing O 6852.50, H 6925.75, L 6791.00 with a current close near 6889, forming a doji with a long upper wick that suggests indecision at best and rejection at worst. Friday is loaded with US macro data: Core PCE (the Fed's preferred inflation gauge) and GDP Advance at 08:30, S&P PMI Flash at 09:45, then UMich Sentiment and New Home Sales at 10:00. Two Fed speakers (Bostic at 09:45 and Logan at 12:45) add to the mix, plus a tentative Supreme Court opinion on tariffs at 10:00. This is a high-volatility setup with potential for sharp moves on the data. The big earnings catalysts are next week: HD on Monday at 6:00 AM and NVDA on Tuesday at 4:20 PM.
Technical Structure:
On the Daily, Thursday printed a bearish candle with the RTH range from 6894 to 6848, settling near 6879. Price closed below the 20-DMA at 6932.67 and 50-DMA at 6932.70, but the overnight bounce has pushed price back above the 5-DMA (6874.40) and is now testing the 100-DMA at 6884.87. So we are sitting right at that 100-DMA level which is a key decision point. Daily oscillator readings collapsed from the 83 overbought zone on Wednesday to 48.48, crossing below the 50 midline into bearish territory. The directional trend remains bearish with 9-Day ADX at 47.40 and -DI (23.46) well above +DI (8.50). The counter-trend bounce we warned about appears to be over, though the overnight bid back above the 5-DMA needs monitoring.
On the 4H, the structure has confirmed a bearish reversal. Price made a Lower High at 6925 (vs the previous HH near 7005), then broke through the 6860 support with a BOS (Break of Structure) to the downside. The 4H oscillator has fallen sharply from 92.62 to 57.73 and is still declining, with the green signal line rolling below the red. The equilibrium on the 4H sits near 6900, which means current overnight price at 6890 is approaching that equilibrium from below. Fib extensions from the recent swing: 1.618 at 6826.25 and 2.0 at 6806.00. If sellers maintain control during RTH Friday, these are the downside targets.
On the 1H, Thursday's RTH session showed a clear distribution pattern. Price rallied from the 6872 open to 6894 (NYAM High), then each bounce was met with lower highs: 6894, then 6880 (NY Lunch), then 6879 (NY PM). The sellers were in control all day with the BOS confirming around the 6857 NYAM Low level. The overnight bounce has pushed price back into the 6889 area, and the 1H oscillator will need to be watched for whether it can cross back above the 50 midline to signal a short-term shift.
Session levels for Friday: PDH 6894.50, PDL 6847.75, ONH 6912.50, ONL 6862.00, VWAP 6871.50, IB High 6894.50, IB Low 6857.00, Open 6870.75, Prior Close 6878.75, Y-VAH 6880.50, Y-POC 6871.50, Y-VAL 6857.50.
News & Sentiment Analysis:
The biggest story heading into Friday is the Iran military situation. WSJ reported that Trump is weighing an initial limited military strike to force Iran into a nuclear deal. The opening assault, if authorized, could come within days and would target a few military or government sites. If Iran still refuses to comply, the US would respond with a broader campaign, potentially aimed at toppling the Tehran regime. Iran's Foreign Minister responded that if subjected to military aggression, Iran will respond and all bases, facilities and assets of hostile targets will be targeted. However, there is also a diplomatic counterpoint: Iran says it has reached an understanding on main principles with the US. The UK is reportedly blocking Trump from using bases for strikes. This is a fluid situation that will dominate risk sentiment heading into the weekend, and the oil market is already pricing in some of the risk with crude at $66.61.
WMT's earnings were a mixed bag that leaned negative for sentiment. The headline EPS beat at $0.74 vs $0.73 expected, and US comparable store sales were solid at +4.6%. But the full-year guidance was the problem: EPS guidance of $2.75-2.85 came in well below the $2.97 consensus, and Q1 guidance of $0.63-0.65 also missed expectations of $0.68. For the world's largest retailer to lower guidance this aggressively speaks to the consumer headwinds ahead, tariff impact uncertainty, and the K-shaped economy narrative we've been tracking. This is not what bulls wanted to hear. HD reports Monday and NVDA Tuesday, so we will get more reads on the consumer and tech spending next week.
Thursday's Fed speaker lineup delivered a mixed but mostly cautious message. The key institutional analysis from the premium feed noted that the FOMC Minutes headlines about potential rate hikes were overblown. The word "several" in Fed language does not indicate a majority, and none of this year's voting FOMC members have remotely entertained serious hike talk. The Committee is in no rush to cut either: "several" participants indicated openness to easing only if inflation declines as expected, while "some" preferred holding steady. The recession probability stands at 20-25%, down from 30% in September. AI productivity gains assessment will be central to the Fed's thinking this year and next.
The capital flows picture continues to deteriorate. Foreigners trimmed US asset purchases, with Net Capital Flows dropping from $212B to $44.9B and Long-Term Transactions collapsing from $220.2B to $28.0B. Japan cut Treasury holdings to $1.186T (from $1.203T) and the UK to $866B (from $889B). This structural diversification away from US assets is consistent with the dollar weakness thesis.
Overnight into Friday, the Asia session brought some fresh data. Japan's Manufacturing PMI Flash came in strong at 52.8 vs 51.5 prior, showing continued expansion. The PBoC held rates unchanged at 3.0% (1yr) and 3.5% (5yr) as expected. RBNZ Governor Breman struck a dovish tone, expressing confidence that inflation will return to the 2% target midpoint over the next 12 months. China remains on holiday (CNY), keeping index volume thin. Australia's PMI data came in mixed with Manufacturing PMI easing to 51.5 from 52.3, Services PMI falling sharply to 52.2 from 56.3, and the Composite PMI declining to 52 from 55.7. New Zealand Trade Balance improved slightly to -$519M vs -$745M expected.
For the European session, UK Retail Sales MoM (forecast 0.2%) and German PPI MoM (forecast 0.3%) will set the tone. The main event is the PMI Flash data: French Manufacturing (forecast 50.9) and Services (forecast 49.2), German Manufacturing (forecast 49.5) and Services (forecast 52.4), and the Eurozone composites (forecast 51.5). These will be closely watched for any signs of European manufacturing recovery after months of weakness. Stronger PMI readings could support the Euro and reduce safe-haven dollar bids, indirectly lifting risk appetite.
Friday's US data calendar is massive. The main event is Core PCE at 08:30, the Fed's preferred inflation gauge. Forecast is 0.3% MoM and 2.9% YoY, both ticking higher from December's 0.2% and 2.8% respectively. A hot print would validate the hawkish FOMC Minutes tone and push rate cut expectations further out, pressuring equities. GDP Advance is also at 08:30 (forecast 3.0% vs 4.4% prior), along with Personal Income and Consumer Spending data that will paint the consumer picture alongside WMT's cautious guidance. At 09:45, the S&P PMI Flash readings (Mfg 52.3, Services 53) give us a real-time view of economic momentum, and Fed's Bostic speaks at the same time. Then at 10:00, a triple hit: UMich Sentiment Final (57.2), New Home Sales (0.73M), and a tentative Supreme Court opinion on tariffs that could blindside the market if it comes through. Fed's Logan speaks at 12:45 to close out the data storm. This is the kind of stacked calendar that can produce 30-40 point swings in ES within minutes.
On the energy side, EIA Natural Gas showed a draw of -144B vs -149B forecast. Crude oil remains the big story, with prices at $66.61 near their highest since August, driven entirely by Iran tensions. Trump reiterated that 50 million barrels of oil are coming from Venezuela to Houston, and oil and natural gas production are up. But the geopolitical premium is overpowering the supply picture. If a military strike materializes, crude could spike well above $70, which would amplify inflation concerns and put further pressure on equities through the energy channel.
In corporate earnings beyond WMT, EBAY reported strong Q4 results after Wednesday's bell: EPS $1.41 vs $1.35 expected, revenue $2.97B vs $2.87B consensus, and they announced the acquisition of Depop from Etsy for $1.2B in cash. Q1 guidance of $3.00-3.05B significantly exceeded the $2.79B estimate. AMD is backstopping a $300M Crusoe loan, with Crusoe using AMD chips as debt collateral, mirroring the NVDA approach. Looking ahead to next week, HD reports Monday (EPS $2.56, Rev $38.26B) as the next retail read after WMT's weak guidance, and then the main event: NVDA on Tuesday (EPS $1.53, Rev $65.8B). The AI capex narrative hinges on that number.
Trump's other comments from Thursday covered a wide range: praising private sector job gains, reiterating that Canada has ripped off the US for years, calling steel tariffs a game-changer, and noting that China drops subsidized products into the US market. His policy statement about making it harder to outsource and the EV sector reversal (which has triggered a $65B capital bleed from the EV sector) add to the trade and industrial policy uncertainty. The White House also proposed banning investors owning over 100 single-family homes from purchasing additional homes, which could have ripple effects through the real estate and REIT sectors. Indonesia sealed a trade deal with the US and agreed to send 6,000 troops to Gaza.
The institutional analysis on the dollar continues to point toward structural weakness. The greenback recovered from four-year lows near 95.50 to the 97.90 area, supported by the hawkish FOMC Minutes tone and safe-haven bid from Iran tensions. DXY at 97.90 overnight, up slightly. But the medium-term view remains for USD weakness driven by asset hedging flows diversifying away from US assets, capital rotation toward non-US markets, and rising risk premia with the Treasury curve steepening.
The K-shaped consumer narrative was reinforced by WMT's results. Productivity gains are flowing to corporate profits rather than labor income, meaning higher-income consumers remain resilient while lower-income households face mounting pressure. WMT's same-store sales at +4.6% show people are still spending, but the cautious full-year guidance suggests the management sees headwinds that the market has not yet priced in.
Options and positioning: The delta hedging requirement sits at $33.9B from Wednesday's data, with Vega at -$963.9M (dealers supplying volatility). On the gamma front, ATM gamma sits at 0.0013 for calls and 0.0012 for puts with implied volatility at 16.12%. The put skew is notable: ATM put IV (17.10%) trades a full point above call IV (16.06%) at the 6890 strike, reflecting demand for downside protection heading into the weekend. Theta decay at ATM is -2.55 for calls and -2.02 for puts, so time is working against premium holders. This gamma profile means dealers are not heavily positioned to amplify moves in either direction, but the put skew tells you where the hedging demand is concentrated. The Fear and Greed Index was at 43 (Fear) and likely dropped further with Thursday's selloff. Multi-indicator composite analysis sits at 24% Sell with Weakest direction. Last week it was 16% Sell and a month ago it was Hold, so the deterioration has been steady. The 20-Year bond auction from Wednesday was soft with a bid-to-cover of 2.360 vs 2.860 prior, though the high yield came in lower at 4.664% vs 4.846%. Japanese government bond yields are ticking down (10yr -2bps to 2.12%), suggesting some risk-off positioning in Asia.
Forecast:
• Overnight: ES has bounced from the 6871 open to the 6889 area in the early overnight session. Iran headlines remain the primary driver. Any escalation (strike confirmed) likely sends oil higher and equities lower. Diplomatic progress (deal talks advancing) would extend the bounce. China still on holiday, so Asian volume will be thin
• Morning Session: A data-heavy morning starts with European PMI Flash data (French 03:15, German 03:30, Eurozone 04:00), then shifts to a wall of US releases at 08:30: Core PCE (forecast 0.3% MoM, 2.9% YoY), GDP Advance (forecast 3.0%), Personal Income and Spending. A hot Core PCE print above 0.3% would reinforce the hawkish FOMC Minutes tone and pressure equities. A cool print gives bulls ammunition for a squeeze. At 09:45, S&P PMI Flash (Mfg 52.3, Services 53) and Fed's Bostic speaking simultaneously. At 10:00, UMich Sentiment Final (57.2), New Home Sales (0.73M), and a tentative Supreme Court opinion on tariffs. This is a volatile setup
• Afternoon: Fed's Logan speaks at 12:45, which could add to morning volatility. After the data storm clears, expect positioning into the weekend given Iran uncertainty. Traders may reduce risk into the close given the possibility of a military strike over the weekend
• Daily Close: Bias leans toward a cautious close. Weekend risk from Iran will keep buyers tentative, even if morning data is benign. If Core PCE comes in hot and the bounce fades at PDH resistance, expect a grind back toward 6860-6870. If data is cool, a squeeze toward 6910+ is possible but conviction will be limited ahead of the weekend
• Expected Range: 6810 to 6920 (based on 14-Day statistical range of ~89 pts centered around 6877 settlement)
• Most Likely Path: Early session tests the 6894-6910 resistance zone (PDH / R1 / 9-DMA). If rejected, expect a fade back toward the 6860-6870 VWAP/Y-POC area. A break above 6910 would target 6930+ (20/50 DMA). A break below 6845 opens the door to 6826 (1.618 Fib) and 6814 (Pivot S2)
Friday Events:
• 02:00 ET: UK Retail Sales MoM (Forecast: 0.2%), German PPI MoM (Forecast: 0.3%)
• 03:15 ET: French Manufacturing PMI Flash (Forecast: 50.9), Services PMI Flash (Forecast: 49.2)
• 03:30 ET: German Manufacturing PMI Flash (Forecast: 49.5), Services PMI Flash (Forecast: 52.4)
• 04:00 ET: Eurozone Manufacturing PMI Flash (Forecast: 50.0), Services PMI Flash (Forecast: 51.9)
• 08:30 ET: US Core PCE Price Index MoM (Forecast: 0.3%, Prior: 0.2%), Core PCE YoY (Forecast: 2.9%, Prior: 2.8%), PCE Price Index MoM (Forecast: 0.3%), GDP QoQ Advance (Forecast: 3.0%, Prior: 4.4%), GDP Price Index (Forecast: 2.8%), Personal Income MoM (Forecast: 0.3%), Consumer Spending MoM (Forecast: 0.3%)
• 08:30 ET: Canadian PPI MoM (Forecast: 0.15%), Core Retail Sales MoM (Forecast: -0.1%)
• 09:45 ET: US S&P Manufacturing PMI Flash (Forecast: 52.3, Prior: 52.4), Services PMI Flash (Forecast: 53, Prior: 52.7), Composite PMI Flash (Forecast: 53, Prior: 53.0)
• 09:45 ET: Fed's Bostic Speaks
• 10:00 ET: Supreme Court Opinion on Tariffs (Tentative)
• 10:00 ET: University Michigan Sentiment Final (Forecast: 57.2, Prior: 57.3), UMich 5 Yr Inflation Final (Forecast: 3.4%), UMich 1 Yr Inflation Final (Forecast: 3.5%)
• 10:00 ET: US New Home Sales (Forecast: 0.73M, Prior: 0.737M)
• 12:45 ET: Fed's Logan Speaks
• Ongoing: Iran military situation headlines, Trump policy updates
• Next Week: HD earnings Mon 6:00 AM (EPS: $2.56, Rev: $38.26B), NVDA earnings Tue 4:20 PM (EPS: $1.53, Rev: $65.8B)
Resistance:
• 6885-6895 - Target Price (6885.92) / 100-DMA (6884.87) / 50% Fib from 4-Week (6897.25) / PDH (6894.50) / IB High (6894.50) / 1 SD Resistance (6895.82). Current overnight battleground. Price is testing this zone right now. A sustained break above opens the door to the next level
• 6904-6912 - 9-DMA (6904.81) / 2 SD Resistance (6903.61) / 3 SD Resistance (6909.59) / Pivot R1 (6910.42) / ONH (6912.50). This is where Thursday's globex session topped out. Major resistance that needs volume to break
• 6926-6935 - MACD Stalls (6926.82) / 18-DMA (6931.57) / 38.2% Fib from 4-Week High (6931.65) / 40-DMA Stalls (6930.25) / 50-DMA (6932.70) / 20-DMA (6932.67). All short-term MAs converge here in a tight band. This is the line in the sand for the bears
• 6944-6975 - Stoch 70% (6944.52) / Pivot R2 (6943.83) / 9-DMA Stalls (6952.75) / Pivot R3 (6975.17) / Stoch 80% (6972.10). Deep upside targets, only in play if Iran deal materializes or major positive catalyst
• 7005-7043 - Previous Week High (7005) / 52-Week/1-Month High (7043). Not in play this week
Support:
• 6858-6871 - 1 SD Support (6858.18) / Y-VAL (6857.50) / IB Low (6857.00) / ONL (6862.00) / 38.2% Fib 13-Week (6867.28) / VWAP (6871.50) / Open (6870.75) / Y-POC (6871.50). First support zone, clustered with multiple session references and the VWAP. This held Thursday's afternoon selling
• 6844-6852 - 3 SD Support (6844.41) / Pivot S1 (6845.67) / PDL (6847.75) / 2 SD Support (6850.39). Second line of defense. A break below 6844 would confirm the bearish continuation
• 6826-6838 - %K Stoch Stalls (6837.69) / Stoch 30% (6834.23) / 3-10 MA Crossover Stalls (6831.46) / 1.618 Fib extension (6826.25). Next major support if 6845 breaks. This is the 4H downside target
• 6806-6814 - Pivot S2 (6814.33) / Stoch 20% (6806.65) / 2.0 Fib extension (6806.00) / 50% Retracement from 13-Week (6813.00). Deep support zone
• 6775-6791 - Pivot S3 (6780.92) / Last week's low (6791.00). If we reach here, the entire multi-week range is breaking down
How I'm seeing it:
• Bearish below 6910. Thursday confirmed what the technicals were screaming: the mid-week rally to the 6925 area was a counter-trend move, not a trend reversal. The bearish daily candle, the complete failure at the 20/50 DMA resistance zone, and the collapse back below the 5-DMA all point to renewed selling pressure. Multi-indicator analysis shifted from Hold last month to 16% Sell last week to 24% Sell now with Weakest direction, a steady deterioration
• The overnight bounce to 6889 is testing the 100-DMA (6884.87) and PDH (6894.50) resistance area. This is a make-or-break zone. If bulls can reclaim and hold above 6895, we could see a squeeze toward 6910-6930. If this is just a relief bounce that gets faded at the RTH open, the downtrend continues
• WMT's full-year guidance cut was a wakeup call. When the world's largest retailer is guiding below expectations on tariff uncertainty and consumer caution, that is not a backdrop for sustainable equity rallies. HD earnings Monday will either confirm or challenge this view
• Iran is the weekend wildcard. If a limited military strike materializes, Monday's open will gap significantly. Oil above $66 and rising is already pricing in some risk, but an actual strike would send crude much higher and equities sharply lower. This is a weekend risk that needs to be respected, and it will likely keep buyers cautious into Friday's close
• Data risk is high: Core PCE at 08:30 is the key. A hot print (0.4%+ MoM) would reinforce hawkish Fed expectations and likely break the overnight bounce immediately. A cool print (0.2% or below) would give bulls fuel for a squeeze through the 6910 resistance. GDP and UMich at 10:00 add additional volatility windows. The Supreme Court tariff opinion at 10:00 (tentative) is a true wildcard that could override all technical setups
• Downside scenario (favored): Overnight bounce gets faded at the 6894-6910 resistance zone during the RTH session. Sellers push price back through the Y-POC (6871) and target 6858-6845 (1SD/Pivot S1). A break below 6845 opens up 6826-6831 (1.618 Fib / Stoch Stalls) and then 6806-6814 (Pivot S2 / 2.0 Fib)
• Upside scenario: European PMIs beat expectations, Iran diplomatic progress, ES breaks above 6910 (Pivot R1 / ONH) and squeezes toward the 20/50 DMA wall at 6930-6935. This would just be a dead cat bounce within the broader downtrend unless we reclaim 6935+ on a closing basis
• Primary Setup: Short from 6894-6910 (PDH / Pivot R1 / 9-DMA / ONH zone), stop 6935 (above 20/50 DMA convergence), targeting 6845 (Pivot S1) then 6831 (1.618 Fib / Stoch Stalls)
• Key invalidation: A sustained move above 6935 (20/50 DMA wall) with conviction volume
Friday is a big data day with Core PCE, GDP, PMIs, UMich, and two Fed speakers all hitting before lunch. Add the Iran weekend risk and a possible Supreme Court tariff ruling, and this is not a day to be complacent. The real earnings action comes Monday and Tuesday with HD and NVDA, but Friday has more than enough catalysts to move price on its own.
Good Luck !!!
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info@algoindex.com, algoindex.com | Join our free trading community: facebook.com/groups/1256769122661043
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Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.