Utilities Sector The Defensive Trade With A Growth StoryGrid Under Pressure Heat Waves AI Demand And Rate Bets Collide
Sector rotation has been a key theme for the utilities sector in recent weeks. The S&P 500 is trading near record levels, and with risk appetite still strong, investors have generally favored cyclical and growth oriented sectors over defensive ones. Despite this backdrop, utilities have still managed to attract steady inflows. This is because the sector plays two roles at once. It is a classic defensive, rate sensitive trade, and it is also a direct beneficiary of rising AI driven power demand, which gives it a growth angle that other defensive sectors lack. This rotation debate has been reinforced by fundamentals. Q2 earnings season for the sector began the week of July 15, with analysts expecting year over year growth of roughly 13.4%, the fourth highest among the eleven S&P 500 sectors. Meanwhile, record summer heat has strained the grid, with PJM peak load surpassing last year's record by about 2 GW on July 2, and real time power prices spiking to nearly $350 per megawatt hour that week versus a year to date average closer to $64. On the macro side, the Fed is expected to hold rates steady at its July 28 to 29 meeting, with markets leaning toward a possible cut in September, a factor that could accelerate rotation back into the sector if it materializes.
What The Market Has Done
The market has been in a larger sideways consolidation range between 960 (Daily level 1) and 870 (Daily level 3) since October 2025.
It was able to hold above yearly VWAP from the start of the year until the first week of May.
Sellers then took control and offered prices below 918, a level confluent with yearly VWAP.
Prices moved down toward the 870 area (Daily level 3), where buyers responded.
Toward the end of June, buyers regained control of yearly VWAP and reclaimed prices back above it.
Since then, buyers have successfully defended yearly VWAP against sellers, who have stepped their offers down to the 940 area and are pressuring the market lower.
What To Expect In The Coming Weeks
The key level to watch is the 915 to 918 area (Daily level 2, CVAH), which is confluent with yearly VWAP.
Neutral Scenario
Expect continued two way battle within the current July value area, with buyers holding bids near 915 while sellers defend offers around 940.
The possible condition that will support this scenario is a mixed Q2 earnings season combined with a Fed meeting on July 28 to 29 that delivers no new guidance, leaving the market without a clear directional catalyst.
Bullish Scenario
If buyers defend the 915 area and the market breaks and accepts above 940, expect a move up toward the 960 area (Daily level 1, March VAH), where responsive sellers are likely.
If that level fails to hold buyers, a further move toward 972.1 (all time highs) becomes possible.
A potential trigger includes stronger than expected utility earnings paired with dovish Fed commentary or an early signal of a September rate cut, along with continued elevated power demand from AI data centers and grid strain. A broader rotation out of high flying growth and cyclical names and into defensive, income generating sectors could reinforce this move, particularly if risk appetite in the broader market begins to fade.
Bearish Scenario
If buyers fail to hold bids at the 915 area, expect a move down toward the 900 area (June VPOC), where some responsive buying is likely.
If that fails to hold, expect a further move down toward 870 (Daily level 3, CVAL).
A potential trigger includes a hawkish surprise from the Fed, a sharper than expected rise in the 10 year Treasury yield, weak utility earnings guidance, or an escalation in geopolitical tension that pushes oil prices and inflation expectations higher. Continued strong risk appetite and sustained rotation into cyclicals and growth sectors at the expense of defensives could also keep pressure on the utilities sector even if earnings come in solid.
Conclusion
Technically, the utilities sector remains anchored at a pivotal decision point around 915 to 918, where yearly VWAP and recent buyer defense have kept the broader range between 870 and 960 intact. Fundamentally, the sector's dual identity as both a defensive, rate sensitive trade and a growth linked AI power demand story continues to make it a natural destination for rotation flows, even as strong Q2 earnings and elevated grid demand support the longer term case. Traders should watch how price reacts around 915 in the sessions ahead, since a clean break in either direction could define whether rotation into utilities accelerates or stalls. What is your read on this range, is 915 the level that holds, or does this turn into a deeper pullback first?
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
Bitcoin at 58,000 Support Buy the Dip or Trapdoor Lower?Bitcoin's Rollercoaster July Fed Whiplash, ETF Outflows and War Drums in the Gulf
Bitcoin has spent the past month whipsawing between fresh macro pressure and short lived relief rallies, and the headlines behind the move matter as much as the chart itself. US listed Bitcoin ETFs suffered their worst month on record in June, with roughly 4.5 billion dollars in net outflows, and most of that selling came from BlackRock's IBIT fund while retail buyers largely stayed on the sidelines and a handful of corporate holders kept accumulating. That outflow pressure coincided with a full weekly close below 60,000 dollars in late June, which also marked Bitcoin's first weekly close below its 200 week moving average since 2023. The macro backdrop turned more decisive when new Federal Reserve Chair Kevin Warsh held rates steady at his first meeting in June and stripped out the rate cuts markets had priced in for the rest of the year, a repricing that dragged Bitcoin down from the low 70,000s toward 60,000.
Sentiment then found brief relief in early July as a softer June jobs report, only 57,000 jobs added against expectations above 100,000, combined with a friendlier tone from Warsh to lift Bitcoin back above 63,000. That relief has since been complicated by a sharp escalation between the United States and Iran, with Iran striking dozens of US linked sites in Bahrain and Kuwait and the US carrying out large-scale retaliatory strikes across Iranian territory, raising fresh concern over the Strait of Hormuz and pulling risk appetite lower across global markets.The July 28 and 29 Federal Reserve meeting remains a key date on the radar, with markets currently pricing roughly 70% odds of another hold, while the ongoing Gulf conflict warrants continued monitoring given its capacity to move oil prices and broader risk sentiment in either direction on short notice.
What the Market Has Done
Market was in a consolidation range between 84,000 (Daily level 1) and 66,000 (Daily level 2) from February to May.
In mid April, buyers were able to bid prices above yearly VWAP and attempted to accept and continue higher.
Sellers defended the 84,000 area (Daily level 1), which resulted in longs giving up and liquidating, causing prices to sell off down to the 66,000 area (Daily level 2).
Market subsequently broke below 66,000 and moved down to the 58,000 area (Daily level 3).
Since then, the market has established value lower and has been in a two-way rotation within June's value area.
What to Expect in the Coming Weeks
The key levels to watch are 63,000 (Daily level 2) and 58,000 (Daily level 3).
Neutral Scenario
Expect continued two-way auction between 63,000 and 58,000 before further directional resolution.
A period without fresh, market moving headlines out of the Gulf conflict or from Federal Reserve officials would likely keep participants balanced on both sides of the range, supporting continued two way rotation between 58,000 and 63,000 until a new catalyst emerges.
Bullish Scenario
If the market is able to reclaim back above 63,000, expect a move up to the 74,300 area, which lines up with the midpoint of the consolidation range and the projected yearly VWAP.
Expect sellers to respond at that level, and if they fail to hold it, expect continuation back up to the 84,000 area (Daily level 1).
A cooler than expected mid July inflation report, renewed ETF inflows, or a de-escalation in the Gulf conflict that eases oil driven inflation fears could act as the trigger for this scenario.
Bearish Scenario
If buyers are not able to defend 58,000 and price breaks down below it, expect a move down to the 51,000 area (Daily level 4).
Expect responsive buyers at that level, and if they fail to hold it, expect further downside toward the 44,000 area (Daily level 5).
A hawkish hold or surprise rate hike from the Federal Reserve on July 28 and 29, continued heavy ETF outflows, or a sharp escalation in the US Iran conflict that closes or threatens the Strait of Hormuz could act as the trigger for this scenario.
Conclusion
Technically, Bitcoin remains locked in a two-way rotation between 58,000 and 63,000, and the reaction at either boundary should set the tone for the next leg, with a reclaim of 63,000 opening the door toward 74,300 and a breakdown of 58,000 exposing 51,000. Fundamentally, the path from here likely hinges on the Federal Reserve's July 28 and 29 decision, the direction of ETF flows after June's record outflows, and whether the US Iran conflict in the Gulf continues to escalate or finds a path toward de-escalation. The technical levels and the macro catalysts should be viewed as connected rather than separate, since a single headline out of the Fed meeting or the Gulf could easily accelerate either scenario. Which scenario do you think plays out first, a reclaim of 63,000 or a breakdown below 58,000?
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
Does Wheat Hold 585 or Is Lower Still on the Table?Bumper Harvest Progress Collides With Fading Geopolitical Risk
Wheat futures have spent the past month grinding lower as fresh harvest supply overwhelmed a market that had been pricing in tighter production. Prices slipped to around 570 to 571 cents per bushel in late June, the lowest level since March, as the advancing US winter wheat harvest reinforced expectations of ample near term supplies. Hard red winter wheat was reported 49% harvested versus just 11% a year earlier and a five year average of 19%, while soft red winter wheat reached 45% harvested, also well ahead of its historical pace. This rapid progress has partly offset the bullish acreage story from USDA's June Wheat Outlook, which projected 2026/27 winter wheat production down 27% year over year to 1,030 million bushels, the smallest crop since 1965/66, with hard red winter output pegged at 497 million bushels, the lowest since 1957/58, largely due to persistent drought across the Great Plains.
On the geopolitical side, the US and Iran signed an interim memorandum of understanding in mid June that ended active hostilities, set a 60 day window for reopening the Strait of Hormuz to commercial shipping, and outlined a path toward sanctions relief, while leaving the detailed terms of Iran's nuclear program to be negotiated separately within that window. This eased fertilizer and shipping risk that had been supporting wheat prices. That news also pushed European wheat futures in Paris below the 200 euro mark, their lowest level in weeks. It is worth noting that this arrangement remains an interim framework rather than a final deal, and recent reports point to continued disagreement between Washington and Tehran over its scope, so this is better viewed as a reduction in acute risk rather than a fully resolved situation.
Export demand has been choppy as well, with the week ending June 18 showing sales nearly double the prior year's pace, only for the week ending June 25 to fall to the lowest total of the new marketing year. Slower farmer selling and concerns over European wheat production following a recent heatwave have helped cushion the downside somewhat. Traders should keep an eye on the upcoming USDA Grain Stocks report, continued harvest pace data, and any developments in the ongoing US Iran negotiating window, since these will likely determine whether prices stabilize here or extend the slide.
What did the Market do?
Towards the end of February, the market broke above 588 (daily level 3), imbalancing out of a multi-month consolidation range that had held from September through January 2026.
The market then auctioned two-way, forming an auction block between 635 and 588.
By the end of April, the market broke out above the 635 area (March and April CVAH), then retraced back to the middle of the auction block, where buyers stepped up bids.
That buying pushed price higher into the 700 area (daily level 1, February 2025 VAH), forming a sequence of higher highs and higher lows.
Responsive sellers stepped in at the 700 area, sending prices lower back into the auction block and breaking below 620 (daily level 2), which ended the bullish structure of higher highs and higher lows.
More recently, sellers have stepped their offers down to 620 (daily level 2, June VAH) and price is now testing the 585 area (daily level 3, Jun VAL).
What to Expect in the Coming Weeks?
The key level to watch remains the 585 area (daily level 3, June VAL).
Neutral Scenario
If buyers continue to defend the 585 area and sellers defend 620 (daily level 2, June VAH), expect continued two way auction within June's value area.
A possible trigger for this range bound scenario would be a mixed USDA Grain Stocks report that neither confirms nor challenges current harvest pace assumptions.
Bearish Scenario
If buyers fail to hold 585, expect a move down toward the 560 area, the mid point of the prior consolidation range.
If buyers also fail to defend 560, expect a move down to the 533 area (daily level 4), which also marks the low of the consolidation range.
A possible trigger here would be confirmation of continued rapid harvest progress alongside weak export sales, reinforcing the ample supply narrative.
Bullish Scenario
If buyers break and accept above 620 (daily level 2, June VAH), expect a move up toward the 650 area (May HVN).
A possible trigger here would be renewed weather stress in European or US growing regions, or a setback in the fragile 60 day Hormuz safe passage arrangement under the MOU, since Iran has disputed parts of the deal's scope and the free passage window is temporary rather than permanent.
Conclusion
From a technical standpoint, wheat is sitting at a pivotal decision point at the 585 area, with the broader structure still range-bound between the 533 and 700 levels that have defined trading since last year. From a fundamental standpoint, the market remains caught between a genuinely smaller winter wheat crop, the smallest since the late 1950s and 1960s by USDA's own estimates, and a harvest that is arriving unusually fast, alongside a Middle East backdrop that has de-escalated following the interim US Iran memorandum of understanding, though that arrangement is still only a 60 day framework rather than a resolved situation. Whether 585 turns into a buying opportunity or a trapdoor to lower prices will likely hinge on which of these forces, tightening supply fundamentals or the durability of the harvest and geopolitical calm, wins out in the coming weeks. Where do you see wheat heading from here, and are you positioned for a breakout or a breakdown?
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
ES Futures at the 7300 Crossroads: Dip Buy or Trapdoor?Tech Stumbles While the Broader Tape Holds Its Ground
The S&P 500 has spent the past month wrestling with a tug of war between resilient breadth and a wobbly mega cap tech sector. Heading into late June, the Nasdaq Composite suffered a five session losing streak as investors rotated out of technology names and into more defensive corners of the market, even as the S&P 500 and Dow held up comparatively better on a weekly basis. Apple shares tumbled more than 5% after the company implemented its largest hardware price increase in years, while a New York Times report suggested OpenAI may delay its IPO into next year, citing weak aftermarket performance from SpaceX and broader volatility in AI related equities. That report rattled chip and AI infrastructure names, though Micron delivered a strong earnings beat that helped stabilize sentiment in the memory chip space for a session, even as Japanese and South Korean memory makers like Samsung, SK Hynix, and Kioxia sold off sharply on oversupply concerns tied to SK Hynix's planned thirty billion dollar US listing.
On the macro side, the Federal Reserve held its benchmark rate steady at 3.5% to 3.75% at its June meeting, the fourth consecutive hold under new Chair Kevin Warsh. The accompanying dot plot turned notably hawkish, with the median year end rate projection raised to roughly 3.8%, and several officials now pencil in a possible hike as soon as October rather than the cuts markets had hoped for earlier in the year. The Fed also lifted its inflation forecasts, pointing to energy driven price pressures tied to the ongoing conflict in the Middle East. Reinforcing that theme, President Trump said Iran fired attack drones at vessels transiting the Strait of Hormuz, a development that keeps an energy and shipping risk premium alive even after a prior ceasefire. May personal consumption expenditure inflation rose to a three year high, and traders are now watching next week's nonfarm payrolls report after May's surprisingly strong 172,000 job gain. Investors should also keep tariff headlines on their radar, since the current global tariff structure is set to expire in late July with the administration signaling new tariffs may follow.
Context, What the Market Has Done
Since May, the market has accepted higher prices and broken out to new all time highs.
Selling liquidity and responsive sellers were found in the 7600 to 7700 area in June, leading to a rotation back down toward the 7300 area.
The 7300 area lines up with Daily level 3, the April value area high, which is confluent with Auction block 1.
Since that rotation, the market has been engaged in a two-way auction working to re-establish balance.
What to Expect in the Coming Weeks
The key level to watch remains the 7300 area, Daily level 3 and the April value area high.
Neutral Scenario
If buyers defend and hold the zone between 7300 and 7400, Daily level 2, the composite value area low, and sellers defend the 7600 area, expect continued two way consolidation before further directional resolution.
A possible scenario that could reinforce this range bound behavior is a period of mixed economic data, where jobs numbers come in roughly in line with expectations and Fed officials maintain a wait and see tone without fresh hawkish or dovish surprises.
Bearish Scenario
If buyers fail to defend 7300, and sellers cap upside rotations while stepping down offers, expect a move through Auction block 1 toward the 7150 area, Daily level 4, a composite value area high, where sellers are expected to respond.
A break and acceptance below 7300 would be significant, since it sets up a lower low and lower high, the early structural footprint of a possible bearish trend.
A geopolitical escalation, such as a further disruption to shipping through the Strait of Hormuz or a renewed spike in oil prices, alongside a hotter than expected inflation print, could be the catalyst that triggers this scenario.
Bullish Scenario
If buyers defend 7400, Daily level 2, the composite value area low, and step up bids within the current composite value area between 7400 and 7600, that would be a first sign of bullish intent.
A break above 7600, Daily level 1, the composite value area high, would open the path back toward the 7694 area, the prior all time highs, and potentially beyond to fresh highs.
A cooler than expected inflation report combined with a dovish shift in Fed commentary, or a de-escalation in Middle East tensions that eases oil price pressure, could provide the macro spark for this scenario.
Conclusion
From a technical perspective, the 7300 area is the line in the sand for this auction, with the broader structure still range-bound between the April value area high and the prior all time highs near 7694. From a macro lens, a hawkish Fed under Chair Warsh, sticky inflation, unresolved Middle East risk, and looming tariff changes in late July all argue for a market that needs clean catalysts before committing to a direction. Where do you see ES heading first, a defense of 7300 or a breakdown toward 7150? Share your take in the comments.
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high Lumber at the 620 Crossroads, Breakout Brewing or Bull Trap?Tariffs, Wildfires, and a Tight Supply Story Behind the Rally
Lumber futures have staged a notable rally through June 2026, climbing toward levels not seen since October 2025. Prices pushed above 630 per thousand board feet, a four week gain of roughly 6.3 percent, even as the broader housing market remains soft. This move has been driven primarily by supply side developments rather than a surge in construction demand.
On the trade policy front, the US Commerce Department recently lowered preliminary antidumping duties on Canadian softwood lumber from 20.6 percent to 10.7 percent, while the countervailing duty rate edged down from 14.6 percent to 14.2 percent. Combined, this brings the total rate down to about 25.9 percent from 35.2 percent previously, though these rates are preliminary and are not expected to take effect until August. Importantly, the separate 10 percent Section 232 tariff remains in place, keeping the effective rate on Canadian imports close to 35.9 percent. This means the headline reduction in duties has done little to ease actual import costs in the near term, and traders should watch for the finalization of these rates later in the year as a potential catalyst.
On the supply side, British Columbia has introduced emergency measures aimed at boosting timber availability after wildfires and storm damage disrupted production and threatened output. Combined with prior mill closures across 2024 and 2025 that reduced overall milling capacity, this has kept lumber supply relatively tight even as demand signals from the housing sector stay mixed. Canada still supplies roughly 30 percent of US lumber consumption, so any disruption to Canadian output continues to carry outsized influence on price.
Readers should watch for further updates on the finalized antidumping and countervailing duty rates expected around August, ongoing wildfire season developments in British Columbia, and any changes in US housing starts data or Federal Reserve rate guidance, since lower borrowing costs have historically been supportive of new home construction and lumber demand.
Context, What the Market Has Done
Market has been in a multi-year downtrend, weighed down by the unwinding of pandemic era demand that had peaked in 2020 and 2021 amid record low mortgage rates and a remodeling and homebuying surge, prolonged high mortgage rates from 2022 onward that suppressed housing starts, and periods of oversupply from mills that had ramped up capacity during those earlier boom years.
By the end of 2025 and through January and February 2026, the market was sideways in a consolidation block between 650 and 600.
Market probed below the auction block in March but was met with responsive buyers, and price rotated back into the consolidation range.
Sellers subsequently stepped down offers within the range to the 620 area, the mid of the range, which was confluent with the yearly VWAP.
Sellers were able to drive another leg lower subsequently below 600.
Market attempted to accept lower with a probe beneath 580 but was rejected back up.
Recently in June, the market staged a big rally, with buyers bidding prices back above 600 (CVAH), above 612 (yearly VWAP), and now probing above 620 (range mid).
What to Expect in the Coming Weeks
The key level to watch is 620, the daily level 2 and range mid, along with the yearly VWAP.
Neutral Scenario
If buyers defend at 600 (CVAH) while sellers hold down offers at the 620 to 630 area, expect a sideways two way auction before further directional resolution.
A possible trigger for this scenario would be a delay or further postponement in the finalization of the Canadian softwood antidumping and countervailing duty rates, leaving traders without a clear catalyst and keeping the market in a holding pattern.
Bullish Scenario
If buyers are able to defend and accept above 620, expect a move up towards 650, the daily level 2 and consolidation block high, where sellers are likely to be present to defend.
If buyers are able to bid above 650, expect a move up to 690, the daily level 1. This break and acceptance above 650 would be significant, as it would end the multi-year downtrend structure.
A possible trigger for this scenario would be confirmation of tighter Canadian supply due to continued wildfire and storm related disruption in British Columbia, or a dovish shift in Federal Reserve rate guidance that supports housing activity expectations.
Bearish Scenario
If buyers fail to sustain above 620 and the market rotates back below, expect a move down to 600 (CVAH). If buyers do not defend this level, expect a move down to the 580 to 565 area, the CVAL and recent swing low. Below this zone, expect resumption of the broader downtrend.
A possible trigger for this scenario would be a weaker than expected US housing starts report or a finalized tariff outcome that effectively keeps total Canadian duty costs unchanged, removing the recent optimism that has supported the rally.
Conclusion
From a technical standpoint, lumber sits at a pivotal juncture around the 620 level, at the mid of the multi month consolidation range. Acceptance above this zone with a subsequent move through 650 would carry structural significance, potentially marking the end of the multi-year downtrend. From a fundamental standpoint, the recent rally has been fueled largely by supply constraints tied to Canadian wildfire damage and mill closures, while the trade policy backdrop remains a source of uncertainty given that the lower preliminary tariff rates have not yet taken effect and the Section 232 tariff continues to keep effective import costs elevated. Traders should weigh this supply driven strength against still soft housing demand fundamentals before assuming the breakout will hold. Where do you think lumber heads next, breakout above 620 or a fade back into the range? Share your view in the comments below.
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
ZN 109 Hold: Temporary Relief or Structural Shift? A Market Caught Between Oil Shocks, Fiscal Anxiety, and a Reluctant Fed
The macro backdrop for ZN futures has been anything but quiet over the past month. The US-Iran conflict, which broke out in late February 2026, has been the dominant driver reshaping rate expectations across the board. The disruption of oil exports through the Strait of Hormuz pushed energy prices sharply higher, contributing directly to US producer prices rising 6.5% year-over-year in May, the highest reading since November 2022 and slightly above consensus estimates of 6.4%. Consumer prices followed the same trajectory, hitting a three-year high. That combination effectively repriced the Fed's path for the rest of the year. What began 2026 as a market pricing two rate cuts has since shifted dramatically, with futures markets at various points assigning as high as a 50% probability of a rate hike by December, before settling back to a more balanced stance as Iran peace talks emerged mid-June. As of June 12, the 10-year yield hovered near 4.47%, pulling back roughly 10 basis points as President Trump signaled a potential peace agreement with Iran could be signed in Europe that weekend, triggering a sharp drop in oil prices and easing inflation concerns.
Layered on top of the geopolitical shock is the persistent fiscal overhang. Moody's downgraded US sovereign credit from Aaa to Aa1 in May 2025, and the budget deficit is now widely expected to widen toward 9% of GDP, adding a meaningful term premium to longer-dated yields. Bank of America flagged in a June 2026 report titled "Foreign UST demand shows cracks" that central banks have been reducing Treasury holdings at the New York Fed by an average of $17 billion per week since late March, with total net reductions approaching $4 billion through the week ending June 11. Foreign appetite for US debt has softened materially, and while recent long-end auctions have been described as "solid," the structural concern about who absorbs ongoing supply remains in the background.
The yield curve itself is signalling a late-cycle environment. As of June 12, the curve is upward-sloping, with the 2-year yield near 4.09% and the 10-year at 4.47%, producing a 2s10s spread of roughly 38 basis points. That steepness is not the healthy, growth-driven variety. Instead, it reflects the long end pricing in inflation persistence and term premium risk while the front end stays anchored near the Fed funds target of 4.25%. Charles Schwab's fixed income mid-year outlook noted that inflation remains sticky and the Fed is likely to stay patient, with the 10-year yield expected to hold in the 4% to 4.5% range, with risks skewed to the upside. Watch the US dollar as well, with DXY near 99.8 after a recent surge toward 10-week highs driven by geopolitical safe-haven flows, the dollar remains a key co-variable to watch alongside oil and bond prices for ZN direction.
What the Market Has Done
Market liquidity checked at the start of March above 113'11'5 (Daily Level 1) and failed, marking the beginning of a sustained trend lower.
From that March high, ZN sold off steadily, driven by the escalating US-Iran conflict, energy-driven inflation re-acceleration, and the repricing of Fed rate cut expectations away from the 2026 consensus.
Price found its way down to 109 (Daily Level 2 / May lower HVA), which represents the daily support zone from April and May 2025 and has acted as a meaningful reference point for buyers.
In the most recent week, the market appears to have found buying liquidity at this zone, with buyers stepping up bids and price stabilizing, consistent with the broader easing in oil prices and the Iran peace deal narrative gaining traction around June 12.
The broader structure, however, remains a downtrend from the March highs, and the onus is on the buyers to demonstrate they can reclaim higher ground with conviction rather than a bounce.
What to Expect in the Coming Weeks
The key levels to watch are 110 (May VPOC) and 109 (Daily Level 2 / May lower HVA). How price behaves around these two references will determine the next directional leg.
Neutral Scenario
Expect two-way rotation within the 110 to 109 range as the market re-establishes value before committing to a directional move.
Price may oscillate between these references across multiple sessions as participants digest the already-hot May CPI print of 4.2% year-over-year and position ahead of the next key inflation catalyst on July 14, when June CPI drops.
This is the chop scenario where neither buyers nor sellers gain a decisive edge, and range-fading strategies become more viable than directional bets.
A stable macro backdrop with no major surprises from inflation or geopolitical developments would support this rotational environment.
Bullish Scenario
If the market is able to break and accept above 110 (May VPOC), expect a move back towards 110'25 (Apr VAL / May VAH).
Reclaiming 110 with acceptance would effectively break the downtrend structure from the March highs, shifting the character of price action from sellers-in-control to a recovering market.
Watch for volume confirmation and follow-through above 110 before treating any initial breach as a genuine structural shift.
A possible macro trigger could be a confirmed Iran peace agreement that sends oil prices sharply lower, meaningfully reducing inflation expectations and reviving rate cut pricing for late 2026, which would be a direct tailwind for bond prices.
Bearish Scenario
If buyers do not defend 109 and prices accept below that level, expect further downside to 108 (Daily Level 3 / Feb 2025 low), representing a resumption of the downtrend from March.
A clean break below 109 with follow-through would confirm that the buying liquidity found this past week was corrective rather than structural, and the path of least resistance remains lower.
This is the scenario where the fiscal overhang, foreign demand erosion, and persistent inflation all reassert themselves simultaneously, offering sellers the macro justification they need.
A possible macro trigger could be a renewed escalation of the Iran conflict, a surprise hot inflation print in June, or an unexpected Fed hawkish pivot that pushes markets to price in a rate hike more firmly, sending yields higher and ZN futures lower.
Conclusion
ZN sits at a genuine decision point. On the technical side, price is parked at a critical support zone (109 / Daily Level 2 / May lower HVA), where buyers have shown up in the past week, yet the overarching trend structure from the March highs at 113'11'5 remains intact and bears watching. The 110 level (May VPOC) is the line in the sand; holding below it means the downtrend is in force, and only a sustained acceptance above it shifts the narrative. On the macro side, the developing Iran peace deal is the near-term wildcard, having already pulled the 10-year yield back to around 4.47% from recent highs. But the structural headwinds of a widening fiscal deficit, foreign demand erosion from central banks, Moody's credit downgrade, and sticky inflation do not disappear with a ceasefire headline. The Fed remains on hold with no clear catalyst to pivot dovish. The market has shown buyers are present at 109, but buyers showing up and buyers being in control are two very different things. Which side of 110 does ZN close in the weeks to come? That answer should tell you everything about whether the dip here is an opportunity or the beginning of a deeper move to 108 and beyond. Drop your view in the comments below.
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
Crude at 96: War Premium Exit or Dip Worth Buying? War Premium Unwinds, But the Strait Is Still Shut
The single biggest driver of crude over the past several months has been the US-Israel war on Iran, which began on February 28, 2026, and effectively closed the Strait of Hormuz to commercial traffic. At its peak in early April, Brent crude surged above $140 per barrel, the highest since 2008, as the conflict removed an estimated 12 to 15 million barrels per day from global supply and triggered record inventory drawdowns. The IEA noted that cumulative supply losses from Gulf producers already exceeded 1 billion barrels, with more than 14 million barrels per day shut in. The EIA reported that the US made its single largest-ever weekly drawdown from the Strategic Petroleum Reserve in mid-May, underscoring just how tight the physical market became.
The story in May, however, shifted dramatically toward diplomacy. Reports emerged that the US and Iran had "mostly agreed" to a 60-day memorandum of understanding that would pause hostilities, sending Brent down roughly 19% for the month, its worst monthly performance since the COVID-19 pandemic. By May 29, Brent settled near $92.56. That peace optimism has since proven fragile. Iran subsequently halted ceasefire talks, fresh strikes were reported on Kuwait and Oman in early June, and Iran's Foreign Minister stated there had been "no tangible progress" despite ongoing back-channel messaging via mediators. WTI has since bounced back above $90 on renewed geopolitical risk premium.
On the supply side, OPEC+ approved a largely symbolic 188,000 barrel-per-day production hike for June on May 3, with Saudi Arabia signaling further similar-sized increases are possible. However, these additions are meaningless so long as Gulf producers cannot physically export through Hormuz. The UAE, meanwhile, exited OPEC+ entirely. The IEA reaffirmed a significant 2026 global surplus outlook contingent on Hormuz reopening, a condition that remains unresolved. In correlated markets, the DXY traded near 99 to 100 at end of May, holding near two-month highs on safe-haven demand and higher-for-longer Fed pricing after US headline CPI hit 3.8% in April. Equities are under pressure, with the S&P 500 trading near 7,383 and the Nasdaq off over 4% on the week. A stronger dollar and weakening risk appetite are headwinds for crude demand narratives, even as supply fears keep a floor under prices.
What the Market Has Done
Since April, the market has been compressing with higher lows and lower highs, forming a textbook symmetrical contraction as the market digested the initial war shock and the subsequent peace-deal-driven sell-off.
In May, price stabilized into a sideways range between 105 (daily level 1) and 86 (daily level 2), with participants on both sides unwilling to commit directionally amid the ceasefire noise.
May closed with a double distribution profile on the volume profile, reflecting two distinct areas of accepted value and signaling the market is in a balancing phase rather than a trending one.
Recently in the last week, sellers have stepped down to the 96 area, which aligns with May's Low Value Area (LVA) and VPOC, suggesting the short side has found an area of interest and is probing for acceptance below the upper distribution.
What to Expect in the Coming Weeks
Key levels to watch are 86 (daily level 2) and the 96 area (May LVA / VPOC).
Neutral Scenario.
If buyers continue defending 86 while sellers maintain offers around 96, expect a two way balanced auction as the market continues establishing value before its next directional resolution.
A possible trigger could be a continued diplomatic stalemate on the Hormuz deal, where neither a full ceasefire nor a re-escalation materializes, leaving markets in a geopolitical holding pattern.
Bearish Scenario
If buyers fail to defend 86, expect acceptance below Daily Level 2 and a move toward 77, which represents Daily Level 3.
Acceptance below 86 would suggest that buyers are no longer willing to defend the lower end of the current range and that the market is seeking value lower.
A possible trigger could be a confirmed ceasefire deal or the formal reopening of the Strait of Hormuz, releasing pent-up supply and collapsing the geopolitical risk premium rapidly.
Bullish Scenario
If buyers reclaim and establish acceptance above the 96 area, expect a move back toward 105, which remains Daily Level 1.
Reclaiming 96 would signal that buyers have regained control of the upper distribution and that the market is prepared to continue rotating higher within the broader 105 to 86 range.
A possible trigger could be a breakdown of ceasefire talks combined with fresh strikes on Gulf infrastructure, reigniting supply fears and sending the risk premium sharply higher.
Conclusion
Crude oil is caught between two powerful and opposing forces. On one hand, the physical market remains deeply undersupplied as the Strait of Hormuz stays restricted, with global inventories drawing down at a record pace and no credible timeline for normalization. On the other side, the diplomatic noise around a potential US-Iran deal has already slapped nearly 20% off the highs in a single month, demonstrating just how violently risk premium can exit this market. Structurally, price is compressing at the May LVA/VPOC around 96, with 86 as the critical line in the sand for bulls and 105 as the ceiling sellers are defending. Whether 86 holds or breaks will be the defining trade of the coming weeks. The geopolitical tape is trading faster than any chart. The ceasefire crowd already took 20% off the highs. If they are wrong and Hormuz stays shut, 105 could come back on the table fast. Which side of this are you on?
D isclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
Solana Futures at a Critical Decision Point as Range TightensFutures De-Risk as Alpenglow Looms on the Horizon
Solana futures sentiment has shifted firmly toward caution in May 2026. Open interest on SOL futures contracts declined roughly 30% through the month, falling from approximately $2.75 billion to $1.90 billion, as leveraged traders pulled back exposure across the board. This de-risking in the futures market stands in notable contrast to the spot side, where SOL ETFs attracted $113 million in net inflows throughout May, marking the strongest monthly total for those products in 2026. The divergence is worth paying attention to: futures participants are cautious, but spot buyers are still showing up.
What makes Solana distinct from mainstream crypto peers like Bitcoin and Ethereum comes down to design philosophy and speed. Bitcoin is digital gold, which is a store of value secured by proof-of-work with no smart contract functionality. Ethereum is the original programmable blockchain, but it trades throughput for decentralization, with comparatively slower finality and higher transaction costs. Solana was built from the ground up to be fast and cheap at scale, combining high throughput with sub-second block times and fees that are fractions of a cent, making it the chain of choice for high-frequency activity like meme coin trading, DEX (De-centralized exchange) volume, and real-time payments. That positioning is showing up in the numbers. Solana recently surpassed Ethereum in month-to-date DEX volume and now holds over $2.1 billion in outstanding on-chain loans. The tradeoff has historically been network reliability, though the Alpenglow upgrade is directly targeting that weakness.
On the fundamental side, the biggest story from the past month is Alpenglow. Solana developer Anza confirmed on May 11 that Alpenglow, the network's most significant proposed consensus overhaul to date, went live on a community test cluster, allowing external validator operators to test the new architecture for the first time. The upgrade replaces both Proof of History and TowerBFT, targeting transaction finality of 100 to 150 milliseconds, roughly 80 to 100 times faster than the current system. Solana co-founder Anatoly Yakovenko, speaking at Consensus Miami 2026, said the mainnet launch could come as early as Q3 2026 if testing proceeds without issues. That said, markets have been measured in their reaction. This is a testing-phase catalyst, not a confirmed mainnet launch, and price tends to respond to the confirmation event rather than the development milestone.
On the sell side, Pump.fun deposited over 4.2 million SOL into Kraken throughout May, generating sustained distribution pressure near key support levels. That volume of exchange inflows from a single entity represents a meaningful headwind. The gap between strong on-chain activity and weak price action is something worth watching as a potential coiled spring, or as a sign that fundamentals alone will not drive price until macro conditions improve.
Context - What has the Market done?
The market has been in a downward trend in a block like manner for several months.
Price is currently sitting at a key support area dating back to January 2024.
Since February 2026, the market has been consolidating in a narrow four month balance area between 99, which represents auction block 2 high and daily level 1, and 78, which represents auction block 2 low and daily level 2.
Despite the broader downtrend, sellers have so far been unable to achieve meaningful acceptance below 78.
Likewise, buyers have repeatedly failed to establish acceptance above 99, resulting in continued two way auction conditions.
The longer this balance area persists, the greater the potential for an expansion move once either side gains control.
What to Expect in the coming weeks
The key levels to watch are 78 (daily level 2) and 99 (daily level 1).
Neutral Scenario
Without any significant macro, regulatory, or crypto specific catalyst, expect continued two-way auction within the current balance area between 78 and 99.
Range trading conditions would likely remain dominant as buyers defend support while sellers continue to protect resistance.
A possible macro backdrop of steady but unspectacular risk appetite, with no major policy shifts or geopolitical escalations, keeps the market in this balanced, low-conviction mode.
Bullish Scenario
The first clue that the bullish scenario may be developing is buyers holding bids above the 87.8 (range midpoint) and gradually compressing price toward 99.
If the market breaks and accepts above 99, expect an upside move toward the 115 area, which represents the gap high, followed by possible two-way rotation within the former gap to fill in and repair it.
A possible macro trigger for this scenario could be a confirmed Alpenglow mainnet date, a meaningful acceleration in SOL ETF inflows, or a broader risk-on rotation driven by favorable trade or monetary policy developments.
Bearish Scenario
The first clue that the bearish scenario may be developing is sellers stepping down offers toward the 87.8 (range midpoint) and capping upward rotations.
Continued compression from sellers could eventually push price back toward the 78 level.
If the market breaks and accepts below 78, expect a move toward the 60 area.
A possible macro trigger here could be a deterioration in global risk appetite driven by renewed trade war escalation, a surprise Fed policy shift, or a delay or setback in the Alpenglow mainnet rollout that drains forward-looking buyer conviction.
Conclusion
Solana futures sit at the intersection of a technically significant support structure and a fundamental backdrop that remains split between genuine network strength and near-term distribution pressure. The four-month consolidation between 78 and 99 has produced a coiled setup where the eventual resolution will likely be decisive, and the macro or protocol catalyst that tips the balance may already be forming, which are Alpenglow moving toward mainnet, Pump.fun distribution slowing or accelerating, and ETF inflows either recovering or fading further. The technical levels are clean and the scenarios are well-defined, but the real question is which version of Solana the market decides to price first. Would it be the infrastructure story or the distribution pressure? Which side of this range do you think breaks first, and what catalyst gets it there?
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
ZC Corn: Key Inflection at 455 as Trade Winds ShiftMacro Crosscurrents Competing for the Wheel
Corn markets have been pulled in multiple directions over the past month. The single biggest fundamental development came out of Beijing on May 14, 2026, when President Trump and President Xi met for a high-stakes summit that produced a headline agricultural deal. The White House confirmed that China agreed to purchase at least $17 billion annually in US agricultural goods for 2026, 2027, and 2028, on top of the soybean commitments Beijing made at the October 2025 South Korea summit. Prior to the summit, Bloomberg reported that Chinese officials and US counterparts were actively in discussions to specifically include corn, sorghum, and distillers dried grains in the purchases, not just soybeans. That pre-summit chatter was enough to send corn futures above $4.70 per bushel on May 18, as the USDA reported corn export commitments as of April 30 had already surpassed the 3-billion-bushel mark, running 29% ahead of the same point in 2025.
The initial rally faded almost as quickly. When the actual summit details emerged, the language around corn volume, timing, and product breakdown was thin. China began making modest purchases of US wheat and sorghum in the days following, but significant corn bookings have yet to materialize at scale. Corn futures retreated as the market digested the gap between headline ambition and concrete volumes.
The May 12 WASDE (WASDE-671) complicated the fundamental picture further. USDA projected 2026/27 US corn production at 16.0 billion bushels, down 6% year-over-year, with planted area falling to 95.3 million acres and yield estimated at 183 bushels per acre. Ending stocks are projected to drop to 12.1% of use, the lowest ratio in recent averages, pushing the farm-level price forecast 25 cents higher to $4.40 per bushel. Global corn stocks are simultaneously forecast to fall to a 13-year low of 277.5 million metric tons. Export commitments for 2026/27 are forecast at 3.15 billion bushels, down 150 million from the current-year record pace. On paper, these numbers tilt fundamentally constructive, but the market has been slow to fully price the tighter balance sheet because weather-driven yield uncertainty and Chinese purchasing follow-through are the real unknowns.
On the geopolitical front, the US-Iran situation is at an inflection point of its own and cannot be ignored for corn. A ceasefire brokered in early April by Pakistan has held unsteadily, with both sides conducting continued strikes. As of May 25, US and Iranian negotiators have developed a framework to extend the ceasefire 60 days and reopen the Strait of Hormuz, which had been disrupted since the conflict escalated in late February. The Strait closure has kept energy prices elevated and fertilizer costs high throughout the spring planting window. Urea Gulf FOB prices spiked sharply in early March and have remained at elevated levels, with farmers effectively paying around 145 bushels of corn per ton of urea versus roughly 125 bushels at the height of the 2022 fertilizer shock. A durable resolution that allows the Strait to reopen fully would ease fertilizer and fuel cost pressure, but it could also remove a key fear premium that has underpinned grain prices since the war began. Watch this carefully, as a credible reopening announcement would be a bearish catalyst for energy-linked agricultural inputs while simultaneously improving farmer margins on the new crop.
Context - What the Market Has Done
Since August 2025, the market has been steadily stepping up bids and compressing toward the 485 level, which aligns with the June 2025 VAL and Daily Level 1 area.
Buyers have repeatedly attempted to auction above 485, but price has continued to remain capped below that region as responsive sellers defend higher value.
More recently, the market has bee
Current price action continues to reflect a balanced rotational environment rather than directional acceptance, with both buyers and sellers remaining active within established value.
The inability for sellers to drive sustained acceptance below 460 has kept downside momentum limited despite larger projected supply expectations from USDA.
What to Expect in the Coming Weeks
The key level to watch is 455 (Apr VAL / Ascending Trendline).
Bullish Scenario
If buyers are able to continue defending above 455, expect continuation higher toward the 485 area near the June 2025 VAL.
Responsive sellers are expected to remain active near 485. However, if sellers fail to respond aggressively and buyers are able to sustain acceptance through June 2025 value, expect continuation toward 491 at the June 2025 VPOC.
Above 491, the next major upside target becomes the 500 area near the June 2025 VAH.
A potential macro trigger for this scenario would be China making large, specific corn purchase announcements with confirmed volumes and shipment schedules, or a failed Iran deal that keeps fertilizer costs elevated and further pressures projected US acreage below USDA expectations.
Bearish Scenario
If buyers fail to defend 455, expect the market to auction lower toward 443, which aligns with the January 2026 VPOC.
Below 443, the next downside target becomes 438 near the August 2025 VAL.
If sellers remain aggressive and buyers fail to respond meaningfully at 438, expect continuation lower toward 430 , which is the prior swing low / Daily level 1.
A potential macro trigger for this scenario would be the Strait of Hormuz reopening credibly under a durable US-Iran deal, sharply reducing energy and fertilizer cost support, combined with China failing to follow through on corn-specific purchases beyond the initial headline commitments.
Neutral Scenario
If buyers respond from 485 but fail to bid prices back up to 485 on the rotation up, expect the market to coil and compress as buyers continue to step up bids from the lower end while sellers step down offers from the upper end, tightening the auction area progressively.
The current backdrop supports this scenario well. The US-Iran ceasefire remains fragile and unresolved, and Chinese corn purchases are trickling in at a modest pace, neither confirming nor denying the demand thesis. Without a clear directional catalyst, the market has little reason to break out of its range with conviction.
This compression within the range sets up for a more decisive resolution when a confirmed catalyst emerges, either from the US-Iran situation or from confirmed China purchase volumes with specifics attached.
Conclusion
ZC corn sits at a genuinely important juncture where the fundamental picture and the technical structure are telling a similar story. The tighter USDA balance sheet for 2026/27, record-pace export commitments, and elevated fertilizer costs from the Middle East conflict all argue for a constructive underlying tone. At the same time, a large-scale China corn deal remains incomplete in its specifics, the Iran ceasefire framework could shift energy and input costs sharply in either direction, and the WASDE's projection of 3.15 billion bushels in 2026/27 corn exports still represents a step down from the current-year record, flagging that demand growth is not guaranteed. The 455 level is where it all gets decided in the near term. A hold above 455 opens the door back to 485 and potentially 500. A break below 455 would negate the ascending structure and expose 443, 438, and 430 in sequence. The Strait of Hormuz negotiation outcome and the pace of China's actual corn bookings in the coming weeks are the two macro variables worth tracking as closely as the price action itself. Are you positioned for the breakout, or waiting for confirmation at 455?
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
NQ All-Time Highs: Pure Breakout or the Ultimate Bull Trap? Context: What the Market Has Done?
NQ staged a powerful V-shape recovery beginning in early April, catalyzed by the announcement of a two-week US-Iran ceasefire on April 7. The ceasefire triggered an immediate broad-based relief rally, with the Nasdaq surging over 2.8% on that single session alone as hedge funds scrambled to cover short positions that had built up throughout the prior month of conflict. Energy prices dropped sharply as well, with oil briefly unwinding a significant portion of its war-driven premium following hopes that the Strait of Hormuz would reopen to commercial traffic.
Since that pivot point, the market has rallied in a near-parabolic fashion, driven by a powerful combination of AI-related momentum, strong large-cap technology earnings, and growing investor optimism that geopolitical tensions will continue to de-escalate. NQ has blown decisively through the pre-war all-time high of 26864, and the market has shown no meaningful sign of relenting. There have been only a handful of red sessions since April, with dip buyers stepping in aggressively on each one.
During the week of May 4, the market established a clear uptrend, trending higher across the week. Last week, however, NQ transitioned into a balancing phase, as evidenced by the balanced weekly volume profile. Value was established higher, which is a healthy price action that allows the market to digest the prior aggressive move and build a base before the next leg. This type of consolidation after a sustained trend is constructive, not a sign of weakness.
Last week closed back within the prior week's Value Area on Friday, as a broad selloff hit across asset classes. The trigger was a deteriorating bond market. A global bond selloff gathered pace into Friday, driven by back-to-back US inflation reports showing sharper-than-expected rises in both consumer and wholesale prices, climbing crude oil prices, and the failure of the US-China summit in Beijing to produce any breakthrough on ending the Iran war or reopening the Strait of Hormuz. Rising yields pressured high-growth technology names, with the Nasdaq 100 tumbling over 1.4% on the session as traders reduced risk into the weekend.
What to Expect in the Coming Weeks?
The key level to watch heading into the coming weeks is 29000, which is the prior week's Value Area Low (VAL).
Bullish Scenario
If buyers continue defending 29000, expect markets to revisit all time highs at 29782.
If the market can accept above the 29500 area, which marks the May 11 weekly value area high, that could open the door for another leg higher into fresh all time highs.
Watch order flow around millennium figures as price moves into uncharted territory, as profit taking may emerge there.
Possible macro trigger:
Nvidia reports earnings on Wednesday May 20, with consensus expecting revenue of approximately $54.4 billion driven by Data Centre demand for its Blackwell chips. A beat on revenue and strong forward guidance could reignite AI momentum buying and send NQ aggressively higher.
The FOMC Minutes, also due Wednesday, could add fuel if they reveal the committee is not as hawkish as the bond market is currently pricing, easing rate hike fears and sending yields lower.
On the geopolitical front, any credible breakthrough in US-Iran peace negotiations or a confirmed, durable reopening of the Strait of Hormuz would likely trigger another sharp relief rally across risk assets, similar to the move seen when the initial ceasefire was announced in April.
Trade access points for bullish scenario:
Stalk for longs at 29000 on lower timeframe confirmation of buyers stepping in. These levels are notorious for overshoots and fakeouts designed to shake out weak longs before the larger buyers initiate.
Stalk for a breakout above 29500 on high volume and strong pace, or a break-and-retest for a lower-risk entry with the tradeoff of potentially missing the move.
Bearish Scenario
If buyers fail to defend 29000, expect a move toward 28700, which is the May 4 weekly VPOC.
If buyers fail to respond there, price could rotate lower toward 28230, which is the May 4 weekly LVN.
Possible macro trigger:
If Nvidia disappoints on earnings or guides cautiously given ongoing uncertainty around chip export rules to China, a sharp unwind in AI-driven positioning could weigh heavily on NQ.
The FOMC Minutes could compound the selling if they reveal a growing number of members are actively debating rate hikes in response to war-driven inflation, pushing Treasury yields above recent highs and triggering a broader risk-off move.
On the geopolitical front, a breakdown or collapse of the ceasefire, a fresh military escalation between the US/Israel and Iran, or a spike in crude oil back toward recent highs would reignite inflation fears, accelerate the bond selloff, and put significant pressure on technology names.
Trade access points for bearish scenario:
Stalk for a breakout below 29000 on high volume, strong pace, and negative delta. Exit quickly if the break is met with absorption and slowing pace, as a short squeeze may follow.
Stalk for a break-and-retest of 29000, entering on lower-volume pullback with good seller absorption, confirmed by delta shifting from passive to aggressive on the tape and DOM.
Neutral Scenario
If price approaches 29500 on top or 29000 below with slowing pace and weak volume, expect rotation back into last week’s value area for continued two way auction.
This would suggest the market is still building value higher before deciding on its next directional move.
Possible macro trigger:
An in-line Nvidia result, FOMC Minutes with no hawkish surprise, and an Iran situation that remains in limbo with neither breakthrough nor breakdown leaves the market without a directional catalyst, keeping NQ rangebound within last week's Value Area.
Trade access points for neutral scenario:
Fade the edges at 29500 or 29000 on reducing volume and slowing pace, using lower timeframe reversal patterns to trigger entry. Be patient with overshoots before rotating back.
Conclusion
NQ is sitting at a technically significant juncture. The macro tailwinds that fueled the V-shape recovery from the April lows, including the US-Iran ceasefire, aggressive short-covering, and AI-driven momentum in large-cap technology, remain intact at the broader level. However, the bond market is now flashing a warning. Rising yields driven by persistent inflation data and a stalled peace process are a headwind that this market will need to navigate carefully. The 29000 level represents the line in the sand. How buyers and sellers respond at this area will determine whether NQ continues its historic breakout into uncharted territory or takes a more meaningful step back to digest the extraordinary gains made over the past six weeks. Watch the orderflow, respect the levels, and let the market tell its story.
Is 29000 going to hold and launch this market to new all-time highs, or is this the exhaustion point where the breakout finally fails? Are you buying the dip or fading the highs? Drop your targets and your bias below.
Disclaimer: Past performance is not necessarily indicative of future results. Trading futures involves substantial risk of loss and is not appropriate for all investors. This content is intended for informational and educational purposes only and does not constitute trading advice or a solicitation to buy or sell any futures contract. Trade your own plan and manage risk.
Key Concepts covered in article:
Balanced Weekly Volume Profile — when the distribution of volume across the week forms a symmetrical, bell-shaped curve, indicating that the market spent time building value at current prices rather than trending directionally, typically a sign of consolidation and acceptance.
Value Area (VA) / Value Area High (VAH) / Value Area Low (VAL) — the range of prices where approximately 70% of the week's volume was transacted. The VAH is the upper boundary and the VAL is the lower boundary. These levels act as reference points for where the market considers fair value.
Volume Point of Control (VPOC) — the single price level where the highest volume was traded during a given period, representing the area of greatest market acceptance and often acting as a magnet for price.
Low Volume Node (LVN) — a price level where very little volume was transacted, indicating that the market rejected that price quickly. LVNs tend to offer little support or resistance and price often moves through them rapidly.
Two-way Auction — a market condition where neither buyers nor sellers are in clear control, resulting in price rotating back and forth between the upper and lower boundaries of an established range as both sides compete for value.
Absorption — occurs at a specific price or cluster of prices where the bid or offer is continuously reloading as one side actively lifts the offer or hits the bid, building a wall of volume at that level.
Pace on the Tape — the speed at which orders are transacting at a given price level. Fast pace signals strong conviction behind a move, while slowing pace suggests the move may be losing steam.
DOM (Depth of Market) — a real-time order book displaying the volume of pending buy and sell limit orders at each price level, allowing traders to see how buyers and sellers are interacting with the bids and offers in real time, including whether bids and offers are stacking or pulling, which reveals the true intention of the market.
Delta — the net difference between aggressive buying and selling volume. Strongly negative delta on a breakdown confirms genuine seller conviction rather than a passive move that is vulnerable to reversal.
Passive vs Aggressive Sellers — passive sellers place limit orders at the ask, waiting for buyers to come to them, while aggressive sellers actively hit the bid, indicating stronger conviction and urgency to push price lower.
Millennium Figures — round number price levels ending in 000 (such as 29000, 30000), which act as significant psychological reference points where large players tend to take profit or initiate positions, often causing increased volatility and temporary stalls in price.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
RTY Breakout to ATHs: Small Caps Lead as War Truce Holds Geopolitical Fog, Rate Uncertainty, and the Small Cap Divergence
The past month has served as a genuine stress test for risk sentiment, and RTY has passed with surprising resilience. The macro backdrop remains anything but clean. The US-Iran conflict, which began with US-Israeli airstrikes in late February, resulted in Iran closing the Strait of Hormuz and sending shockwaves through global energy markets. The Federal Reserve's April 29 FOMC statement explicitly cited Middle East developments as contributing to "a high level of uncertainty about the economic outlook," noting that "inflation is elevated, in part reflecting the recent increase in global energy prices." As of this writing, the ceasefire that took effect on April 8 remains fragile. Trump called Iran's most recent peace proposal "totally unacceptable" on Sunday, and Israeli Prime Minister Netanyahu stated there is still "work to be done," even as Pakistani mediators remain active in the process. The situation is unresolved and fluid, and any escalation or breakdown in negotiations would reintroduce geopolitical risk premiums into energy prices almost immediately.
On the monetary policy front, the picture is equally complex. The FOMC voted to hold the benchmark federal funds rate steady at 3.5% to 3.75% at its April meeting, marking the third consecutive pause following three consecutive cuts in 2025. The meeting was notable for an unusual degree of internal dissent, and markets are now pricing in no changes for the rest of this year and well into 2027. Adding to the uncertainty, Federal Reserve Chair Jerome Powell is departing in mid-May, with Kevin Warsh expected to be confirmed as his successor. Warsh has pledged a "regime change" at the central bank, though he has not been explicit on exactly how that change will be implemented. A leadership transition at the Fed, against a backdrop of sticky inflation and an unresolved war, is a meaningful wildcard for rate-sensitive small caps to navigate.
This is precisely where RTY's story gets interesting. Small caps carry disproportionate floating-rate debt exposure relative to large caps, making them acutely sensitive to borrowing costs. Nearly 40% of debt held by Russell 2000 constituents is floating-rate, compared to less than 10% for S&P 500 companies. When the S&P 500 was selling off continuously through the worst of the US-Iran escalation period in March, RTY was not following suit with the same conviction. Instead, it carved out a distinct accumulation range and ultimately broke to new ATHs before the large cap benchmarks did. In April alone, the small cap benchmark surged 11.8%, reaching a fresh all-time high. The RTY is currently trading near 2,861, with the index up 0.76% at the close of May 8. The divergence from the S&P 500's continued downtrend during the worst of the conflict was not noise. It was a market telling a story about rotation and domestic economic confidence. Investors will want to watch credit spreads, the pace of the Iran negotiations, and any signal from incoming Fed Chair Warsh on the rate trajectory as the most important macro variables going forward.
What the Market Has Done
The market fell back into November's range and value area at the beginning of March.
Unlike the S&P 500, which continually sold off as the U.S.-Iran war progressed, RTY balanced and auctioned two-way between 2580, the low of the pre-war consolidation range, and the 2420 area, which marked November value area low, forming an accumulation range.
On April 8, the market broke out of this accumulation range and rallied through the pre-war consolidation range into new all time highs.
From mid April into late April, markets consolidated in a tight block and accepted prices higher, showing buyers remained in control despite slowing momentum.
Most recently, the market broke out above 2810 and pushed into fresh all time highs, confirming continuation higher for now.
What to Expect in the Coming Weeks
The key level to watch is 2,810 (April VAH).
Bullish Scenario
If markets hold above 2,810 (April VAH), expect continued upside and a revisit of the ATH area near 2,918.
Above 2,918, the next logical target is a push into the 3,000 level, which represents fresh price discovery territory and a psychologically significant round number.
A possible macro catalyst that could support this path would be a meaningful breakthrough in the Iran negotiations, with the Strait of Hormuz moving toward full reopening. This would accelerate the disinflationary impulse from lower energy prices and potentially reopen the door for Fed easing under the incoming Chair.
Neutral Scenario
If the market lacks pace and volume as it approaches the edges of the range, expect two-way rotation between 2,810 and 2,918 (ATHs) as the market works to establish value at higher prices.
This type of balanced, rotational trade is normal and healthy following a sharp breakout. It does not negate the bullish structure but does require patience.
A possible macro setup for this path would be a continuation of the current impasse: the ceasefire holding but without a formal deal, the Fed on pause, and incoming data remaining ambiguous enough to prevent a strong directional macro conviction.
Bearish Scenario
If buyers are unable to hold 2,810, expect a move down through the bid block toward the 2,720 area, where buyers are expected to respond.
A failure to hold 2,810 does not automatically invalidate the broader bull structure, but it would signal that the market is not yet ready to sustain these prices and that more time and value-building below is needed.
A possible macro trigger for this path would be a ceasefire breakdown, renewed escalation in the Strait of Hormuz that sends energy prices surging, a hawkish surprise from the incoming Fed Chair Warsh, or a hard miss on small cap earnings that calls the profitability thesis into question.
Conclusion
RTY's chart tells a story that the headline indices largely missed. While the S&P 500 was grinding lower through the worst of the geopolitical storm, small caps were quietly building the foundation for a breakout. The technicals are clear: price is above 2,810 and printing new ATHs, and the structure remains bullish as long as that level is defended. From a fundamental and macro standpoint, the picture is more nuanced. The Fed is on hold with a new Chair about to take the helm, inflation remains sticky above 3%, the Iran ceasefire is fragile and actively contested, and nearly 40% of RTY's debt load is floating-rate, meaning the index has more to gain from cuts and more to lose from hikes than its large cap peers. The market, however, has already voted with its feet. Whether the 2,810 level holds will be the most important near-term tell for whether this rally has legs heading into June. Are you watching 2,810, or are you already positioned for the next leg higher?
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
YM at a Tipping Point: Will the Dow Finally Catch Up? Blue Chips Under Fire: The Weight of 30 Stocks in a Tech-Led World
April ended up being one of the strongest months for U.S. equities in years, with the S&P 500 posting its biggest monthly gain since November 2020, climbing over 10% for the month, and the Nasdaq surging more than 15%, its best monthly performance since April 2020. YM participated in the recovery but noticeably trailed.
The reason comes down to composition and context. The Dow is a price-weighted index of just 30 companies, heavily skewed toward industrials, healthcare, and financials. That structure means it captures far less of the AI-driven earnings momentum that powered semiconductors and megacap tech through April's rally. Apple's strong fiscal second-quarter beat on May 1 lifted the Nasdaq by nearly 1% and pushed the S&P to a fresh all-time high, yet YM finished that same session down 0.31%. This was not an anomaly. It is a pattern. When growth and tech lead, the price-weighted structure of the Dow consistently dilutes the upside that ES and NQ capture with ease.
Several Dow-specific headwinds amplified this dynamic throughout April. Boeing remained volatile, weighed down by ongoing exposure to global aviation and defense demand uncertainty. Merck fell nearly 4% in a single session in mid-April. Nike's roughly 13% single-session drop in early April illustrated precisely how damaging one high-priced component can be to a price-weighted index, even when the broader tape is healthy. On the macro side, the Federal Reserve held rates steady at 3.5% to 3.75% on April 29, marking its third consecutive pause. The meeting produced four dissents, the most since October 1992, reflecting a deeply divided committee on the direction of future policy. The post-meeting statement cited elevated inflation driven by global energy prices as a key reason to remain on hold. Markets are now pricing in no rate changes for the remainder of 2026 and well into 2027. Kevin Warsh, whose Senate Banking Committee confirmation advanced along party lines in late April, is widely expected to take over as Fed Chair imminently. His first meeting will be a critical signal for how rate policy evolves and whether any shift in tone opens room for the value and industrial-heavy Dow to finally play catch-up.
On the geopolitical front, the Iran conflict has shifted from ceasefire optimism into a prolonged stalemate this week. Iran submitted a 14-point proposal through Pakistani mediators, which Trump publicly described as unsatisfactory. Trump also told reporters he was considering whether the U.S. might be better off without a deal at all, while Iranian state media reaffirmed an uncompromising position on the Strait of Hormuz. Vessel traffic through the Strait, which normally handles roughly 3,000 ships per month, fell to just 154 in March. The U.S. Treasury issued a sanctions advisory warning shipping companies against paying Iranian tolls to transit the waterway. Oil remains elevated with Brent crude trading above $110 per barrel and the national average for gasoline sitting at $4.30 per gallon, with California drivers paying over $6.00. This stagflationary backdrop, meaning sticky energy-driven inflation combined with a slowing labor market, is a more direct drag on the blue-chip industrial names inside YM than it is on the AI and semiconductor heavyweights driving NQ. That structural asymmetry is the core reason why YM continues to lag. Entering May, historically a softer period for equities, the question is whether the Dow can find a catalyst of its own or whether it remains the index that follows rather than leads.
What the Market Has Done
Market rebounded aggressively from the 45,100 area (bid block low) after sellers failed to sustain downside continuation.
Price expanded higher and reclaimed most of the downside move that began after the US Iran conflict started.
Unlike NQ and ES, YM still has not reclaimed all time highs, showing clear relative weakness versus broader index peers.
Since mid April, the market has transitioned into a two way rotation environment between 50,100 (Feb LVA / Jan VAH) and 49,000 (Apr LVA).
Current price action suggests responsive buyers remain active at lower value, but initiative buyers have not yet shown enough conviction to force a sustained breakout.
What to Expect in the Coming Weeks
The key level to watch is 50,100 (Feb LVA / Jan VAH).
Neutral Scenario
If buyers are not able to break and accept above 50,100, the path of least resistance is continued two-way rotation between 50,100 (Feb LVA / Jan VAH) to the downside and 49,000 (Apr LVA) as the floor.
This range environment would reflect a market that is waiting for a clearer macro resolution before committing directionally, consistent with the broader tone of uncertainty described by multiple strategists and reflected in the Fed's own statement.
A possible macro trigger for this scenario would be continued ceasefire holding with no meaningful progress toward a permanent deal, oil remaining sticky in the $100 to $110 range, and the Fed staying firmly on hold with no new guidance surprises from the incoming Warsh-led committee.
Bullish Scenario
First sign of the bullish scenario materializing is if buyers hold bids at the 49,400 area (Apr VPOC / the mid of the offer block), confirming demand absorption before a move back toward the top of the range.
If market breaks and accepts above 50,100 with conviction, the next target is 50,916, YM's all-time high set briefly in February when the index first crossed 50,000.
Beyond the ATH, the next targets are the century figures and 51,300.
A possible macro trigger for this scenario would be a meaningful and durable progress toward a permanent Iran ceasefire deal, a material pullback in oil prices from current levels, and/or a dovish signal from the incoming Warsh Fed at his first meeting, which would re-ignite risk appetite across all equity indices, including YM.
Bearish Scenario
If buyers are not able to defend at the 49,000 area (Apr LVA), look for a move down toward the 47,600 area, near the April low, where the next meaningful structural support resides.
A possible macro trigger for this scenario would be a breakdown of the ceasefire, a resumption of active hostilities, oil spiking back above $120, and/or a hawkish shift from the new Fed leadership that forces markets to reprice rate cut expectations further out.
A deterioration in Dow-heavy sectors like healthcare or industrials through earnings or guidance could also act as a catalyst given the price-weighted sensitivity of the index.
Conclusion
YM sits at a genuinely important juncture. Technically, 50,100 is the line in the sand. Until buyers can break and accept above it, the market remains in a range, and the burden of proof rests with the bulls. Fundamentally, the index continues to carry more structural exposure to the risks that are dominating this market cycle. An oil-driven inflation environment, a divided and transitioning Federal Reserve, and persistent weakness in several high-weighted Dow components all explain why YM has lagged NQ and ES even as the broader market recovered. The ceasefire holding or breaking, Warsh's first act as Fed Chair, and whether the 49,000 level holds under pressure are the three variables that will define the next directional move. All eyes on 50,100 because what happens there will tell you everything you need to know about whether YM is gearing up to finally reclaim its highs or setting up for another leg down. What is your bias here — are you fading the range or positioning for a breakout?
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
HG Copper: War, Tariffs, and a Market at the Edge of 6.15 Geopolitics, Policy, and the Forces Moving Copper Right Now
The US-Iran conflict has shut down the Strait of Hormuz, collapsing global oil supply by 10.1 million barrels per day in March per the IEA, and the demand destruction from $150 crude is now weighing directly on copper's demand outlook.
What is less discussed but arguably more significant for copper specifically is the sulfuric acid crisis the conflict has unleashed. Goldman Sachs flagged on April 21 that the near-total halt of Gulf tanker traffic has strangled global sulfur supply, a critical input for the solvent extraction and electrowinning process that accounts for 17% of global copper production. The DRC, where 50 to 60% of copper output depends on sulfuric acid, faces curtailments of approximately 125,000 tons if disruptions extend beyond late May. China compounded the problem by banning its own sulfuric acid exports effective May 1, putting around 200,000 tons of Chilean production at risk, given Chile sourced roughly a third of its acid from China in 2025. Codelco disclosed in March that the war had already pushed its copper production costs up 5%. These are supply constraints that would be bullish under normal demand conditions, but are instead colliding with a simultaneous demand shock.
On the demand side, China's imports of unwrought copper fell 10.9% in March, yet the Yangshan copper premium climbed to $69 per ton on March 29, its highest since June 2025, a signal that spot buying appetite is quietly recovering ahead of the May Day holiday despite the headline weakness. Chinese smelters set a production record of 1.33 million tons in March, the highest in data going back to 1990, though seasonal maintenance is expected to pull output lower through May. On policy, the Trump administration revised Section 232 tariffs on copper derivative products on April 2, and the broader refined copper tariff decision remains unresolved. Goldman Sachs forecasts a 490,000-ton 2026 surplus while J.P. Morgan sees a 330,000-ton deficit; that wide disagreement between two major institutions is itself a signal of how genuinely uncertain the supply balance is. The two variables that could resolve this compression are an Iran ceasefire that reopens shipping lanes and a mid-2026 tariff announcement that ends the US stockpiling trade.
What the Market Has Done
The market was in a consolidation block between 6.15, which is the composite VAH, and 5.655, which is the December VAH, establishing a well defined balance area over multiple weeks.
There was a spike high above the block at the end of January, but this move was quickly rejected back into range the following session, driven by profit taking and a lack of follow through buying as macro conditions at the time, including a firmer US dollar and cautious China demand signals, failed to support acceptance at higher prices.
In the second half of March, the market broke out of the range below 5.655 and attempted to accept lower, signaling potential continuation to the downside.
Sellers failed to gain control as buyers defended the 5.229 level, which aligns with the bid block mid, indicating responsive demand stepping in at lower prices.
By the first week of April, buyers were able to bid prices back into the consolidation block, reclaiming prior value and negating the downside breakout.
The market subsequently moved up aggressively through the consolidation block and tested 6.15, the composite VAH, showing strong initiative buying.
Price action is now in a tight range, compressing just below 6.15, indicating a potential buildup for a directional move depending on acceptance or rejection at this key level.
What to Expect in the Coming Weeks
The key level to watch is 6.15 (Composite VAH).
Bullish Scenario
If the market is able to break and accept above 6.15, expect a move to 6.3555, which is the spike HVN.
If there are no sellers present at that level, a continuation move toward the 6.62 area, which marks the spike high, becomes increasingly likely.
The possible macro catalyst that could trigger this move is a ceasefire extension or diplomatic breakthrough in the Iran conflict leading to a reopening of the Strait of Hormuz. A resolution would immediately ease energy price pressures, reduce demand destruction fears, and likely spark a relief rally across industrial metals. A simultaneous announcement of a delay or softening in US refined copper tariffs would amplify the move further.
Bearish Scenario
If buyers fail to break higher at 6.15, expect long liquidation and a move down to 5.885, which is the consolidation block mid, where buyers are expected to defend.
If this level fails to hold, the market could rotate through the rest of the consolidation block, targeting 5.655, which is the consolidation block low.
The possible macro scenario that could drive this outcome is an escalation of the Iran conflict, specifically a breakdown in ceasefire talks and a resumption of full Strait of Hormuz disruption. J.P. Morgan noted that copper prices have historically troughed approximately 25% below their peak during major macroeconomic shocks, and Goldman Sachs flagged that Brent oil sustained at $110 per barrel or higher would strip more than one percentage point from copper demand growth. A combination of continued energy shock and a faster-than-expected tariff implementation that signals the end of US stockpiling could also produce this outcome.
Neutral Scenario
In the case of a false break above 6.15 followed by responsive sellers, combined with responsive buyers stepping in at 5.885, expect two way rotation between these levels.
This would likely result in continued balance as the market works to repair and fill in the April low volume area.
The current macro environment is actually well-suited to this outcome, as the ongoing ceasefire ambiguity in the Iran conflict keeps both upside catalysts (resolution) and downside risks (escalation) in play simultaneously, making it difficult for the market to commit to a trend.
Conclusion
HG copper is compressing against the Composite VAH at 6.15 with initiative buyers clearly in control of the narrative coming off the 5.229 bid block mid, yet the macro backdrop remains too unsettled to hand either side a clean edge. The sulfuric acid supply risk across the DRC and Chile is a genuine structural threat that most participants are still not fully pricing, while China's quiet Yangshan restocking beneath the surface contrasts with the bearish headline import figures. The Iran ceasefire status and the mid-2026 refined copper tariff decision are the two macro variables that will ultimately determine whether this compression resolves higher toward 6.3555 and 6.62, grinds lower through 5.885 and back toward 5.655, or simply churns between these poles repairing the April LVA. Price acceptance or rejection at 6.15 in the sessions ahead will be the clearest real-time read available. Are you fading this level or trading the breakout?
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
SOFR Futures (SR3) Compress at Key Level as Policy Path TightensRates in the Crossfire: The Iran War, Tariffs, and a Fed Between a Rock and a Hard Place
SR3, or the Three-Month SOFR futures contract, is one of the most liquid short-term interest rate instruments in the world. It prices in the market's expectation of the average Secured Overnight Financing Rate (SOFR) over a future three-month period, making it a direct and highly sensitive barometer of Federal Reserve monetary policy expectations. When markets anticipate rate cuts, SR3 prices rise. When the outlook shifts hawkish or uncertainty grows, prices fall. For that reason, SR3 is closely watched by rates traders, macro participants, and institutions managing short-term interest rate exposure.
The rates market has been navigating one of the most complex macro backdrops in recent memory. Heading into 2026, the market had priced in two Federal Reserve rate cuts for the year. That expectation has since been aggressively repriced. At its March 18 to 19 FOMC meeting, the Fed held rates steady at 3.50% to 3.75% for the second consecutive meeting and maintained its median dot plot projection of just one cut in 2026, the same forecast it issued in December 2025. However, markets have since priced out even that single cut, with futures implying no rate change in 2026, and options markets putting the modal path at zero cuts. The probability of a rate hike through early 2027 climbed to roughly 30% following the release of the March FOMC minutes.
The central destabilizing force is the Iran War, which erupted in late February 2026 and disrupted the Strait of Hormuz, sending Brent crude above 108 dollars a barrel. Gasoline prices surged approximately 92 cents per gallon in a single month, to a national average of 3.84 dollars by mid-March. Fed Chair Jerome Powell acknowledged at the March press conference that the near-term effect of higher energy prices will lift inflation, adding that he could not yet look through energy-driven inflation as transitory because the Fed had not yet resolved the prior inflation problem stemming from tariffs. The Fed's March SEP revised projected headline and core inflation higher to 2.7% for 2026, above its prior estimates.
Compounding the energy shock is the unresolved tariff overhang. Core goods inflation picked up to 1.4% over the 12 months through December 2025, at least partially reflecting tariff pass-through. The Fed is effectively caught between two sides of its dual mandate: inflation that has remained above the 2% target for over four years, and a labor market where job creation has, in Powell's own words, slowed to essentially zero. The FOMC minutes from March show that while most participants believe it is too early to fully assess the war's economic impact, some members are openly discussing whether rate hikes could become appropriate if inflation fails to cool. One dissenter, Governor Stephen Miran, voted to cut by 25 basis points at the March meeting, arguing policy remains too restrictive. Fed Governor Christopher Waller stated on April 17 that the conflict is likely to push near-term inflation higher, though he signaled openness to cuts later in 2026 if peace is reached in a timely manner. The next FOMC meeting is April 28 to 29, and traders and participants should closely watch any guidance shift, especially with Powell's term as chair expiring in May 2026 and leadership succession uncertainty adding another layer of unpredictability to the policy path.
What the Market Has Done
SR3 was in a sideways balanced consolidation range from May 2025, rotating between 96.6325 (daily level 2) and 96.3750 (daily level 3), with neither buyers nor sellers able to establish sustained directional control.
Beginning December 2025, sellers began stepping down offers and compressing prices lower toward the 96.375 level (daily level 3), reflecting the progressive repricing of rate cut expectations as tariff inflation remained sticky and the macro-outlook deteriorated.
In mid-March, sellers were able to push price through and below 96.375, triggering a breakdown that extended toward the 96.18 area, where buyers responded with sufficient conviction to establish that level as near-term support (daily level 3).
Buyers subsequently bid prices back up from 96.18 toward 96.375 (daily level 3), where price is now compressing in a tight range, with buyers and sellers battling for control at this critical contested zone.
What to Expect in the Coming Weeks
The key level to watch remains 96.375, which continues to act as a pivotal daily level 3.
Neutral Scenario
Without a clear macro catalyst, expect continued two-way rotational trade within the current tight range
Expect prices to continue rotating between 96.3925 (CVAL / Daily level 3) on the upside and 96.30 (April developing VPOC) on the downside.
Possible Macro trigger: A continuation of the Fed's "wait-and-see" posture at the April 28 to 29 FOMC meeting with no major guidance shift, combined with inconclusive energy market developments, would leave traders without a directional anchor and sustain the current range-bound environment.
Bearish Scenario
If sellers are able to defend 96.375 and step down offers toward 96.32, expect continuation lower.
A break below 96.32 opens the door for a move back down toward 96.18, which aligns with daily level 4, where buyers are expected to respond.
Possible Macro trigger: A deterioration in the Iran conflict, a further spike in crude oil prices, or a hawkish FOMC statement at the April meeting signaling that rate hikes are back on the table would be the catalyst needed for sellers to regain the upper hand and press price lower.
Bullish Scenario
If the market is able to break above and find acceptance above 96.375, expect upside continuation.
Initial upside target sits near 96.440, where sellers previously held offers.
If sellers fail to respond at 96.440, expect extension toward 96.500, which represents the consolidation range midpoint, and potentially 96.535, which aligns with the composite VPOC, where sellers are expected to respond and cap further upside.
Possible Macro trigger: A ceasefire or credible peace deal in the Middle East that takes the pressure off oil prices, or a notably weak nonfarm payrolls print ahead of the April meeting that reignites labor-market concerns and shifts the policy debate decisively back toward cuts, could give buyers the ammunition needed to push through and above 96.375 and sustain higher prices.
Conclusion
SR3 sits at one of the most technically and fundamentally significant junctures it has faced in this cycle. The 96.375 daily level 3 is not just a line on a chart; it is the fulcrum between a market that is repricing toward zero cuts and one that could snap back sharply if the geopolitical or macro picture shifts. With the April 28 to 29 FOMC meeting, elevated oil prices, sticky tariff inflation, and Powell's leadership succession all converging simultaneously, the weeks ahead could define the next significant directional leg in SR3. Watch 96.375 closely. Drop your view in the comments below.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
NQ Futures: Navigating the Storm Between War and TradeGeopolitics, Tariffs, and the Tech Tape: What Is Driving Price Action
The macro backdrop for equity markets heading into April 2026 has been anything but quiet. Two dominant forces have shaped risk sentiment across the board: the outbreak of a U.S.-Israeli military conflict with Iran beginning on February 28, 2026, and ongoing trade policy uncertainty stemming from the Trump administration's tariff agenda.
The Iran war, which the International Energy Agency described as creating the greatest global energy security challenge in history, effectively shuttered the Strait of Hormuz, a chokepoint through which roughly 20% of global oil consumption transits. Brent crude, sitting near $70 per barrel before the conflict erupted, surged above $119 at its peak, directly pressuring inflation expectations and complicating the Federal Reserve's rate path. The Atlanta Fed's GDPNow tracker entered negative territory in late Q1 2026 for the first time since the pandemic, raising recession concerns. Goldman Sachs raised its recession probability to 30% and projected unemployment rising to 4.6% by year end, driven largely by the energy shock.
The tech sector bore significant collateral damage. Hardware and semiconductor companies faced a double blow: soaring energy and shipping costs, alongside disrupted supply chains through the Persian Gulf. Helium, a critical input for chipmakers in South Korea and Taiwan, was among the commodities affected. Consumer sentiment cratered, and Wall Street began pricing in a stagflation scenario not seen since the 1970s.
On April 7 to April 8, the landscape shifted dramatically. The United States and Iran agreed to a fragile two-week ceasefire, brokered with assistance from Pakistan and with Oman as a back channel. Trump announced the agreement contingent on Iran reopening the Strait of Hormuz, and Iran's Supreme National Security Council agreed to a temporary reopening. WTI crude plunged over 14% on April 8, and the Dow surged more than 1,325 points, its best single day in a year. The Nasdaq Composite surged 2.8%. However, the ceasefire remains fragile. Iran's parliamentary speaker subsequently accused the U.S. of violations, oil has climbed back toward and above $97 per barrel, and high-level talks are still ongoing. The U.S. government reported its biggest CPI spike in four years for March, driven by energy, underscoring that the inflation problem has not been resolved.
Separately, Trump's broader tariff agenda, including a 10% baseline duty on all imports enacted under Section 122, continues to hang over tech hardware valuations. Morningstar analysts noted that if tariffs persist, fair value estimates for major tech names could fall 10 to 20%. Traders should also keep an eye on whether the Fed pivots on rate cut timing, as easing energy costs could reopen that door sooner than the current market pricing.
What the Market Has Done
Since the final quarter of 2025, NQ has been in a large consolidation range between 26300 (daily level 1) and 24500 (daily level 2), establishing the broader value area as participants digested macro uncertainty.
In February, offers stepped down progressively, forming the top edge of a tighter consolidation range 3 and compressing prices lower as the Iran conflict broke out on February 28 and equity markets globally sold off sharply in response to the energy shock.
In the last week of March, sellers were able to overwhelm buyers at 24500 (daily level 3), and market broke lower through consolidation range 1 down to the 23800 area (daily level 4 / consolidation range 1 low). Buyers initially responded at that level, but sellers maintained control and stepped down offers to 24400 (daily level 3), resulting in a further selloff down to the 23000 area (daily level 5). Buyers strongly rejected prices higher from that zone, consistent with the timing of the ceasefire announcement on April 7 to April 8, when the Dow's best single day in a year and broad risk-on buying across global equities created the conditions for a sharp reversal off the lows.
Recently, markets have bid up strongly back into consolidation range 3 and are now trading above 24870, the March VPOC. This recovery aligns directly with the ceasefire relief rally, the partial reopening of the Strait of Hormuz, and renewed optimism around U.S.-Iran diplomatic talks. Additionally, Trump's post on April 8 indicating the U.S. would work with Iran to remove nuclear material and explore tariff and sanctions relief further fueled risk appetite.
What to Expect in the Coming Weeks
The key levels to watch are 24870 (March VPOC) and 25140 (mid of consolidation range 3).
Bullish Scenario
If markets are able to hold bids above 24870 area or 25140 area, expect continuation higher toward 25650 area (daily level 2).
If the market is able to accept above 25650, expect expansion back toward 26300 area (daily level 1).
A macro catalyst that could trigger this is a durable extension of the ceasefire, confirmed reopening of the Strait of Hormuz, and a credible path toward the U.S.-Iran normalization that allows oil to retreat sustainably and revives Federal Reserve rate cut expectations.
Neutral Scenario
If the market approaches 25650 (daily level 2) with a slower pace and lower volume, expect sellers to defend the level and respond.
Expect rotation back down through consolidation range 3 toward 24870 (March VPOC), where buyers are expected to defend.
Expect a two-way rotation between 25650 and 24870 to establish value higher.
A potential macro backdrop would include mixed economic data and stable rate expectations, keeping markets in balance without a strong directional catalyst.
A macro catalyst that could trigger this is that the ceasefire holds on paper but remains unresolved, with oil stabilizing in the $95 to $100 range, keeping the Fed on hold and limiting the upside case for rate-sensitive tech equities.
Bearish Scenario
If buyers are not able to hold 24870 (March VPOC), expect a move down toward 24500 area (daily level 3), where buyers are expected to respond.
A break below this level would signal acceptance back into the lower portion of the broader range.
A macro catalyst that could trigger this is a breakdown in the U.S.-Iran talks, a resumption of hostilities, or a fresh tariff escalation targeting the tech sector that reignites recession and stagflation fears.
Conclusion
NQ sits at a critical inflection point where technicals and fundamentals are speaking the same language. Price is back inside consolidation range 3 and trading above the March VPOC at 24870, the level that now serves as the line in the sand between bullish and bearish interpretations. The macro picture remains layered. The March CPI print, released April 10, came in at 3.3% annually, the highest reading in nearly two years, with gasoline prices surging a record 21.2% in a single month. Importantly, core CPI held at just 2.6% year over year, which gives the Fed enough cover to hold rates steady at its April 28 to 29 meeting rather than hike, a meaningful distinction for rate-sensitive tech equities. The ceasefire has bought time, but oil remains well above pre-war levels, Analysts have already flagged April's CPI print as likely to be uncomfortably strong, and the diplomatic situation is fragile at best. The market's next directional move will be determined by whether the ceasefire hardens into something durable, whether core inflation stays contained as energy costs bleed into goods and services over the coming months, and whether buyers can continue to defend and build value above 24870 to confirm that the structural low is in. Where do you see NQ going from here, and which scenario are you trading?
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
GC: Holding the Line After a Historic UnwindMacro Crosscurrents Driving Gold’s Volatility
Reaching a meaningful milestone in any ongoing market coverage often coincides with periods of reflection, and the current backdrop in gold provides exactly that. The macro landscape surrounding Gold Futures has been anything but stable, offering a fitting environment to examine both past developments and what may lie ahead.
Gold’s surge into early 2026 was driven by a convergence of macro forces rather than a single catalyst. In January, expectations around monetary policy shifted notably after Federal Reserve officials signaled a slower pace of rate cuts than markets had anticipated late in 2025. At the same time, real yields remained volatile, which historically has had an inverse relationship with gold.
Geopolitical tensions also played a significant role. The ongoing instability tied to the Iran-Israel conflict escalation in 2026, contributed to safe haven demand, particularly during periods of heightened rhetoric and reported disruptions in regional security conditions. These developments supported flows into precious metals broadly, including silver and platinum.
Another key driver has been persistent central bank demand. Data released through late 2025 and reaffirmed in early 2026 showed continued accumulation of gold reserves by major economies, notably China and India, reinforcing a structural bid underneath the market.
This constructive backdrop began to shift in the first half of March. Gold’s sharp selloff during this period was driven by a repricing in macro expectations rather than a single catalyst. A more hawkish stance from the Federal Reserve, reinforced by firmer inflation data and an energy driven surge in oil prices tied to escalating Middle East tensions, pushed real yields and the US dollar higher. As markets moved toward a higher for longer rate outlook, the opportunity cost of holding gold increased, triggering a broad liquidation of previously crowded long positioning and accelerating the move lower.
What the Market Has Done
In January, gold made a hyperbolic move higher, establishing new all time highs as momentum accelerated on the back of macro uncertainty and strong inflows.
On January 29, the market spiked to print an all time high at 5658.6, but the following session on January 30 saw a large and volatile move lower that swept through the prior seven days of upside, reaching down into the 4500 area, aligning with the 7 January HVN, where buyers responded.
Through February, buyers steadily bid price back toward the highs, but encountered responsive sellers around the 5450 area, marking Daily level 1.
The inability for buyers to revisit all time highs resulted in rotation lower toward the 5000 area, corresponding with the February VAL, where buyers stepped in and defended, leading to two way trade and value establishment.
In the third week of March, buyers lost control as the market broke below value and expanded lower with increasing volatility, driven by long liquidation and fresh short participation.
Price moved through the prior four month range (from November through February) and tagged the November value area, where responsive buyers stepped in aggressively, leading to a rejection higher.
More recently, buyers have stepped up bids and attempted to re-establish upward momentum but have encountered responsive sellers around the 4800 area, aligning with the March LVA.
What to Expect in the Coming Weeks
The Key levels to watch remain 4800 and 4580, which define the current balance area.
Neutral Scenario
Without pace and volume at the edges of the 4800 and 4580 range, expect continued two way rotation as the market works to establish value.
This environment could be driven by a lack of new macro catalysts, with markets awaiting clarity from upcoming Federal Reserve communications or key inflation prints.
Bullish Scenario
If bids begin to step up within the 4800 and 4580 range, this would be the first indication that the bullish scenario is developing.
A break and acceptance above 4800 opens the path toward the 5000 area, which aligns with March LVA 1 and February VAL.
Expect responsive sellers in that region. If sellers fail to contain price, continuation through the offer block could target 5215, the March VPOC.
A potential macro trigger could include a dovish shift from the Federal Reserve or renewed geopolitical escalation that drives safe haven flows.
Bearish Scenario
If sellers step down offers within the 4800 and 4580 range and begin to compress price toward 4580, it would signal increasing downside pressure.
A failure of buyers to hold bids at 4580, followed by a break and acceptance below, opens the door to a move toward 4360, corresponding with Daily level 3.
If responsive buyers fail to appear there, continuation lower toward 4130, the January 23 spike low, becomes likely.
This scenario could be triggered by rising real yields, stronger than expected economic data, or a de-escalation in geopolitical tensions reducing safe haven demand.
Conclusion
Gold remains in a defined balance following a period of extreme volatility, with price now compressing between well established levels as both buyers and sellers continue to respond at the edges. The broader macro backdrop continues to play a decisive role, particularly through shifts in interest rate expectations, real yields, and the evolution of geopolitical risks.
The transition from a momentum driven rally in January to a liquidation led selloff in March highlights how quickly sentiment can change when macro conditions reprice. While structural demand such as central bank buying remains supportive, shorter term direction will likely depend on whether markets lean back toward easing expectations or further entrench a higher for longer rate environment.
From a technical perspective, the current range between 4800 and 4580 remains key. Acceptance outside of this area will likely dictate the next meaningful move, with upside targeting a return toward prior value and downside opening the door to deeper retracement levels outlined above.
As price continues to develop within this range, will gold resolve higher as buyers regain control, or does the recent shift in macro narrative have further to run?
This piece also marks a milestone as our 100th article. A sincere thank you goes out to the readers and traders who have followed along, engaged with the analysis, and contributed to the broader discussion around market structure and macro driven price action. Each phase of the market offers new lessons, and sharing that process continues to be a rewarding part of the journey.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
LVA - Low Value Area
HVN - High Value Node
HVA - High Value Area
SP - Single print
ATH - All time high
6E: Between Two Fires-Central Bank Divergence and Energy ShockGeopolitics, Energy, and the Fed/ECB Tug of War
The 6E has been navigating a macro environment defined by two major forces pulling in opposite directions. On the monetary policy front, the Federal Reserve voted on March 18 to hold the federal funds rate unchanged at 3.50% to 3.75% for a second consecutive meeting, citing elevated uncertainty around inflation and the employment mandate. The Fed's updated dot plot now points to only one cut in 2026, a significant downshift from earlier market expectations of two, as persistently firm inflation readings and the energy shock from the Middle East have raised the bar for easing. Meanwhile, the ECB also held its key interest rate at 2% at its March 19 meeting, keeping the policy rate differential between the two central banks firmly in place. The ECB revised its 2026 inflation forecast up to 2.6% and cut its growth outlook to 0.9%, primarily due to the war's impact on energy prices and confidence. This divergence in the magnitude of easing expectations continues to create a complex and uncertain backdrop for the euro.
The elephant in the room is the ongoing conflict in the Middle East. On February 28, the United States and Israel launched Operation Epic Fury, coordinated airstrikes targeting Iranian military and nuclear infrastructure. Iran retaliated by effectively shutting down the Strait of Hormuz to commercial shipping. Brent crude surged above $100 per barrel on March 8 for the first time in four years, briefly trading near $120 before partially retreating. The IEA estimates that global oil supply fell by approximately 8 million barrels per day in March alone, representing the largest supply disruption in the history of the global oil market. Europe is particularly exposed to LNG shortages, having entered 2026 with gas storage at just 46 billion cubic metres at end of February, compared to 60 bcm in 2025. Higher energy prices are simultaneously pushing inflation up and suppressing growth in the eurozone, creating a genuine stagflation risk that complicates the ECB's path forward. Markets will need to closely watch whether the Strait reopens by mid-April, a timeline that energy analysts say is critical before supply losses accelerate materially. The next ECB meeting on April 30 and FOMC meeting on April 29 will be key catalysts to watch.
What the Market Has Done
The market has been in sideways consolidation between the 1.25 daily resistance to the upside and 1.162 as the consolidation range low, establishing a broad multi-week balanced structure.
At the end of January, market attempted a break higher above the consolidation range, but the move failed and price rotated back into the range, signaling that buyers lacked the conviction to sustain a breakout at that level.
Through February, buyers attempted to defend bids at the 1.187 area for a revisit back up to the swing high, but were unable to hold, and price rotated back down to the 1.162 area, back to the consolidation range low.
During the first two weeks of March, buyers were defending the 1.16 area while offers had stepped down to the 1.17 level, forming the recent offer block and compressing price action into a tighter range within the broader consolidation.
More recently, bids slipped and price was able to push further down to the 1.149 area, which corresponds to the May 2025 Value Area Low and a key Daily Level 3. Buyers responded at that level, pushing price back up into the offer block where sellers are currently holding down.
What to Expect in the Coming Weeks
The key levels to watch remain 1.17 (Daily Level 2 / offer block high) to the upside and 1.149 (May 2025 VAL / Daily Level 3) to the downside.
Neutral Scenario
Without sustained pace and volume driving price toward either edge of the range, expect the market to continue in a two-way balanced auction between 1.17 and 1.149 as both sides work to establish value at current levels.
This is likely to coincide with a scenario in which markets await further catalysts before committing directionally.
Specifically, traders will be watching the April 29 to 30 FOMC and ECB meetings, any developments on the Strait of Hormuz reopening, and incoming eurozone CPI and US PCE prints, all of which could materially shift the policy calculus and break the stalemate.
Bearish Scenario
If offers continue to step down within the current range, that is the first clue that the bearish scenario may be in play, as sellers maintain pressure and buyers fail to reclaim ground.
If markets break and accept below 1.149 (Daily Level 3), expect a move down toward 1.133 (Daily Level 4), where buyers are expected to respond.
A macro trigger for this scenario would be a prolonged Strait of Hormuz closure beyond April, which accelerates eurozone stagflation fears and forces the ECB to acknowledge a deteriorating growth outlook, strengthening the dollar on a relative basis as the euro loses its rate differential cushion.
Bullish Scenario
If bids step up within the range and are able to press prices back toward the 1.17 area (Daily Level 2 / offer block high), that is the first clue the bullish scenario is in play.
If buyers are able to break and accept above 1.17, expect a move back within the consolidation range toward the 1.188 area (Daily Level 1).
A macro trigger here would be a swift resolution or ceasefire in the Middle East conflict that reopens the Strait and relieves energy price pressures, allowing the ECB to signal a more stable outlook and reducing safe-haven demand for the dollar, which would give the euro room to recover.
Conclusion
The 6E sits at a genuine inflection point where both the technical and macro pictures are aligned in their ambiguity. Price is pinned between the 1.17 offer block and the 1.149 VAL support, and the macro backdrop mirrors that same tension. The Fed continues to hold firm with limited cuts priced in, the ECB is navigating stagflation risk from the energy shock, and the geopolitical situation in the Strait of Hormuz remains unresolved. The next directional leg will likely need a macro catalyst to generate the kind of pace and volume needed to break one of these edges convincingly. The April central bank meetings and any Strait of Hormuz headlines will be critical to watch.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
HVN - High Value Node
LVA - Low Value Area
SP - Single print
ATH - All time high
ES Futures Testing Key Support as Sellers Press LowerFrom Euphoria to Energy Shock: What Broke Equities Since December
Heading into December 2025, the S&P 500 was extending a strong two year bull cycle, finishing the year up approximately 16.5 percent. Sentiment was supported by solid earnings, three Federal Reserve rate cuts into year end, and continued enthusiasm around artificial intelligence infrastructure spending. The index pushed to fresh record highs in early January 2026, reinforcing bullish positioning.
The inability to sustain those highs quickly became evident. By late January and into February, sentiment around AI leadership shifted as large capital expenditure plans from Amazon, Alphabet, Microsoft, and Meta Platforms were met with selling pressure. Markets began to question the return profile of aggressive spending, triggering a broad de rating across technology and high beta equities. This unfolded against an already stretched valuation backdrop, with the S&P 500 cyclically adjusted price to earnings ratio moving above 40, while core PCE inflation remained elevated near 2.9 percent.
The macro backdrop deteriorated further into March following a sharp escalation in geopolitical tensions. Disruptions around the Strait of Hormuz drove a surge in oil prices, amplifying inflation risks. In response, the Federal Reserve maintained a restrictive stance, holding rates steady and signaling only one cut for 2026. Jerome Powell reinforced that inflation progress has been slower than expected, forcing markets to reprice toward a higher for longer path.
What the Market Has Done
Since December, buyers defended 6840 (Daily level 2) and attempted to sustain all time highs through January into early February, supported by bullish sentiment and prior rate cut expectations, but were unable to do so as offers consistently held the 7070 area (Daily level 1).
From the second week of February to the first week of March, offers progressively stepped down as sellers compressed price toward 6840 (Daily level 2), aligning with the shift in macro tone as rate cut expectations were reduced and technology equities began to de-rate.
In the second week of March, buyers failed to hold bids at 6840 (Daily level 2), resulting in long liquidation as the market swept down to 6670 (Daily level 3), where responsive buyers initially emerged amid rising geopolitical and inflation concerns.
In the past week, sellers continued to step down offers into 6840 (Daily level 2), while buyers were unable to maintain bids at 6670 (Daily level 3), triggering another long liquidation event that drove price through bid block 1 and into the 6540 area (Daily level 4, July 2025 value area high and August 2025 value area low), as higher for longer policy expectations and energy driven inflation weighed on risk appetite.
What to Expect in the Coming Weeks
The key level to watch is the 6540 area (Daily level 4, July 2025 value area high and August 2025 value area low).
Bearish Scenario:
If buyers are not able to hold bids at 6540 (Daily level 4), expect further long liquidation as price continues to flush lower toward 6410 (Daily level 5).
Responsive buyers are expected to appear around 6410, but failure to generate meaningful rotation would signal continuation of the downside auction.
Neutral Scenario:
If buyers are able to hold bids at 6540 (Daily level 4), expect rotation back toward 6670 (Daily level 3), where sellers are likely to step down offers.
Expect a two way auction between 6540 and 6670 as the market works to establish value following recent liquidation.
Bullish Scenario:
The first indication of a bullish shift would be buyers stepping up bids within the 6540 to 6670 range, compressing price upward against 6670 (Daily level 3).
If the market is able to break and accept above 6670 (Daily level 3), expect continuation higher toward the 6800 area (Daily level 2), where prior supply was active.
Conclusion
ES futures are now testing a major higher time frame reference at 6540 after a sequence of long liquidation events that has shifted the market from balance at highs into a developing downside auction. Sellers remain in control in the near term, as reflected by the consistent pattern of lower offers and failed support.
This technical weakness aligns with a more restrictive macro backdrop. The repricing toward just one rate cut, persistent inflation pressures, and elevated energy prices have reduced risk appetite and pressured equities off their highs.
The reaction at 6540 will be decisive. Acceptance below this level opens the path toward 6410, while a successful defense could lead to rotational trade back toward 6670 and potentially higher. Traders should stay focused on both price behavior at these levels and incoming macro data, as the next directional move will emerge from this interaction.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
HVN - High Value Node
LVA - Low Value Area
SP - Single print
ATH - All time high
Short
ZB Futures: Long Bond at a Critical Inflection PointMacro Crosswinds and a Market at a Crossroads
The CME 30-Year U.S. Treasury Bond futures contract, ticker ZB, is one of the most closely watched instruments in global fixed income. Each contract carries a face value of $100,000 and trades nearly 24 hours a day, five days a week, with a minimum price fluctuation of 1/32nd of a point, equivalent to $31.25 per tick. Because ZB prices and yields move inversely, rising prices signal falling long-term yields and a risk-off or bullish bond environment, while falling prices signal rising yields and a risk-on or bearish bond environment. The long bond is sensitive to inflation expectations, Federal Reserve policy signals, fiscal supply concerns, and global risk appetite, making it a barometer for macro sentiment broadly.
The current macro backdrop is anything but straightforward. After three consecutive rate cuts in late 2025, the Federal Reserve, led by Chair Jerome Powell, moved to a wait-and-see stance in January 2026, with the federal funds rate sitting at 3.50% to 3.75%. The February CPI report, released on March 11, showed headline inflation holding steady at 2.4% year-over-year, with a monthly gain of 0.3%, slightly above January's 0.2% reading, though both figures were broadly in line with economist expectations. Market consensus for the upcoming March 17 to 18 FOMC meeting has shifted almost entirely toward a hold, with the first potential rate cut being pushed back to June or July.
The bigger shock, however, has been geopolitical. On February 28, 2026, the United States launched a series of military strikes against Iranian military infrastructure, an operation designated "Operation Epic Fury," which led to the closure of the Strait of Hormuz. Brent crude oil prices surged from roughly $72 to over $118 per barrel in less than ten days as a result. The bond market's reaction has been atypical: rather than rallying on safe-haven demand as one might expect during geopolitical stress, prices have fallen and yields have risen as investors priced in an oil-driven inflation surge and widening budget deficits from war-related spending. The 30-year Treasury yield pushed back toward 4.90%, the highest level in a month, as markets worried governments would need to borrow more heavily to fund defense spending and offset the energy shock. Moody's chief economist Mark Zandi noted that inflation is "stubbornly high, especially for necessities," and warned that all of this is "before the fallout from events in the Middle East."
Compounding the picture is the backdrop of a softening labor market. February saw a loss of 92,000 jobs, creating a sharp divide within the Fed between governors like Christopher Waller, who have hinted at the need for cuts to support the labor market, and more hawkish regional presidents pointing to persistent shelter and energy inflation as reasons to hold. Traders should also watch for any diplomatic de-escalation signals. President Trump's comments suggesting the Iran conflict could end soon triggered a reversal in U.S. equities and a sharp drop in oil prices in early March, demonstrating just how headline-driven this market has become. The upcoming FOMC meeting on March 17 to 18, further energy price developments, and any shifts in Middle East diplomacy are the key macro triggers to monitor.
What has the Market done?
Since October 2025, sellers have steadily stepped down offers, marking lower lows and lower highs, pressuring ZB toward the 114'00 area (Aug 2025 Value Area High / Daily Level 2). This prolonged downtrend reflected rising yields as fiscal concerns, heavy Treasury supply, and a cautious Fed combined to keep selling pressure sustained at the long end of the curve.
In the second week of February, buyers initiated and bid prices up, breaking the downward sloping trendline and driving a move back toward the 119'00 area (Daily Level 1). This move was supported by a significant macro catalyst: U.S. bonds wrapped up their biggest monthly rally in a year as investors sought refuge from mounting global risks and a selloff in equities. On February 13, the benchmark 10-year Treasury yield slid to 4.06% following a CPI report that showed inflation continuing its descent toward the Fed's long-term target, providing a much-needed reprieve and acting as a catalyst for a bond rally. The relief trade and a rotation into fixed income as a safety play provided the fuel for buyers to push ZB back up toward resistance.
Buyers attempted to break and accept above 119'00 (Daily Level 1), but failed to sustain above that area. A volatile selloff followed, driving prices back down toward the 114'00 area. This reversal coincided directly with the onset of the U.S. strikes on Iran, which rekindled inflation concerns across financial markets and eroded the haven appeal of fixed income assets, with sovereign debt around the world posting losses as traders gamed out how a prolonged Middle East conflict could supercharge oil prices and inflation.
What to Expect in the Coming Weeks
The 114'00 area (Aug 2025 VAH / Daily Level 2) is the key level to monitor.
Neutral Scenario
If buyers respond again at 114'00, expect a bid back up toward the March developing VPOC at 116'13, where sellers are expected to respond and facilitate a two-way auction to re-establish value.
This scenario would represent a range-bound, value-building environment as the market balances between macro uncertainty on both sides: inflation risk capping the upside and growth and labor concerns supporting the downside.
Bearish Scenario
If buyers fail to defend 114'00, expect a move down through the Aug 2025 Value Area and bid block toward 112'20 (Aug 2025 VAL).
Should buyers fail to hold at 112'20 as well, the next meaningful downside target becomes 110'20 (Daily Level 3).
In a prolonged conflict scenario, oil prices may rise higher and stay elevated for longer, potentially contributing additional inflationary pressure and keeping Treasury yields elevated, which would support continued downside pressure on ZB prices.
Bullish Scenario
If buyers are able to initiate from 114'00 and successfully bid through 116'13 (developing monthly VPOC), expect a push back toward 119'00 (Daily Level 1).
A credible de-escalation in the Middle East conflict would be the most likely bullish catalyst, pulling oil prices lower and reducing inflation expectations. Should recession risk rise materially, analysts see the 10-year yield potentially retreating toward the 3.75% region, which would be consistent with a meaningful bid returning to the long end and ZB trading back toward its February highs.
Conclusion
ZB is sitting at a structurally significant price zone where the outcome of the coming weeks will likely be decided by the intersection of technicals and macro fundamentals. With headline CPI at 2.4% but the February data not yet capturing the inflationary impact of the Iran conflict, the next several data prints carry outsized importance, particularly as oil prices remain highly elevated. The 114'00 area (Aug 2025 VAH / Daily Level 2) is the line in the sand. A hold here opens the door to a retest of 116'13 and potentially 119'00; a failure accelerates the move lower toward 112'20 and 110'20. The FOMC decision on March 17 to 18, the trajectory of oil prices, and any diplomatic developments in the Middle East are the catalysts most likely to tip the balance.
Drop your views in the comments: do you think buyers will hold the line at 114'00, or does ZB see lower prices before any meaningful recovery?
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
HVN - High Value Node
LVA - Low Value Area
SP - Single print
ATH - All time high
Ethereum Futures Testing Range Lows as Macro Pressures BuildEthereum Futures at a Crossroads: Diverging from Bitcoin
Ethereum futures track the price of Ether, the native token of the Ethereum blockchain, which remains the dominant infrastructure layer for decentralized finance, NFTs, and tokenized assets. Like most digital assets, Ethereum futures are heavily influenced by global liquidity conditions, institutional flows, regulatory developments, and sentiment across the broader cryptocurrency market.
While Ethereum often trades directionally with Bitcoin, the strength of the correlation varies significantly across cycles. Bitcoin is widely viewed as the reserve asset of the crypto ecosystem and increasingly functions as a macro risk proxy. Ethereum, by contrast, behaves more like a high beta technology platform tied to network activity, decentralized applications, and evolving token economics. This distinction explains why Ethereum has recently struggled to hold price levels as effectively as Bitcoin during periods of market stress.
One structural factor affecting sentiment is the evolution of Ethereum’s token economics. After the Dencun upgrade in 2024, much of the ecosystem activity migrated to Layer 2 networks where transaction costs are significantly lower. While this improves scalability, it also reduces the amount of ETH burned on the mainnet, weakening the deflationary narrative that previously supported price appreciation.
Recent macro developments have also contributed to volatility across the crypto complex. In late January and early February 2026, markets reacted negatively to the nomination of Kevin Warsh as a potential Federal Reserve chair, which raised concerns that monetary policy could remain restrictive for longer. That shift in rate expectations triggered a broad selloff across risk assets including cryptocurrencies.
The crypto market also experienced a wave of forced liquidations in early February, with billions of dollars in leveraged positions unwound across derivatives exchanges. These liquidation cascades tend to amplify downside volatility in assets like Ethereum that are widely traded with leverage.
More recently, geopolitical tensions in the Middle East and broader risk asset volatility have also contributed to short term fluctuations across Bitcoin and Ethereum markets.
Against this backdrop, Ethereum futures are now trading near the lows of a multi year range, with market participants closely watching key technical levels for the next directional move.
What the Market Has Done
• The market has been in a large multi year range since 2021 between the 5500 area and the 1700 area.
• Since November 2025, the market failed to hold above the 3750 area (daily level 1) and rotated back down to the 2700 area, where buyers defended at bid block. The bearish rotation coincided with tightening financial conditions and renewed macro uncertainty after hawkish Federal Reserve expectations emerged, which pressured crypto markets broadly.
• Subsequently, sellers stepped down offers to the 3500 area, resulting in a two way auction and forming a consolidation block between 3750 and 2700. This range later transitioned into an offer block once the market broke lower.
• More recently, the market gapped down in February to the 1750 area, a key daily support level where buyers defended. The move occurred during a broader crypto selloff triggered by heavy derivatives liquidations and widespread risk reduction across leveraged positions. Liquidation events exceeding several billion dollars in early February accelerated downside momentum across the crypto market.
• The market is currently balanced within the February value area and trading in a tight range.
What to Expect in the Coming Weeks?
The key levels to watch are 2150 (February VAH) and 1750 (key daily support).
Neutral Scenario
• Without further catalyst, expect the market to continue to auction two-way within the February value area with possible overshoots at the edges.
• This behavior would reflect continued balance conditions as the market digests macro uncertainty and waits for new catalysts such as regulatory developments, institutional flows, shifts in global liquidity conditions, or escalation or resolution of geopolitical conflicts in the Middle East.
Bullish Scenario
• If buyers are able to imbalance out of the February value area above 2150, expect a move toward 2411, which marks the January 31 to February 2 gap low.
• A continuation higher could bring prices toward 2646 to fully close the gap.
• If acceptance develops above 2646 after the gap closes, the market may rotate back into the prior offer block, potentially targeting the 3100 to 3150 area near the offer block midpoint and January VPOC.
Bearish Scenario
• If buyers are unable to defend the 1750 area, expect long liquidation and a move down toward 1300.
• If the market is not able to recover back above 1600 quickly after a breakdown, further downside continuation could follow as leveraged positions are forced out of the market.
Conclusion
Ethereum futures remain trapped within a broader multi year range, but recent price action shows the market testing the lower end of that structure. From a technical perspective, the 1750 support and 2150 February VAH will likely determine the next directional move. A breakout above value could trigger a rotation back toward prior value areas, while failure to hold support could accelerate liquidation driven downside.
Fundamentally, Ethereum continues to navigate a complex transition. Changes to its token economics, institutional positioning in crypto funds, and macro drivers such as Federal Reserve policy and geopolitical developments are all influencing sentiment. As global liquidity conditions and risk appetite shift, Ethereum may continue to exhibit higher volatility relative to Bitcoin.
The next directional move will likely be determined by whether buyers can reclaim the 2150 February VAH or if sellers are able to force acceptance below the 1750 support.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
HVN - High Value Node
LVA - Low Value Area
SP - Single print
ATH - All time high
Crude Oil Breaks Higher as Middle East Risk BuildsGeopolitical Shock and Structural Tightness Drive CL
Crude Oil futures under the ticker CL represent West Texas Intermediate and remain one of the most macro sensitive and geopolitically reactive contracts in global markets. Pricing is influenced by physical supply and demand balances, OPEC plus production policy, US shale output, refinery utilization, inventory levels, currency movements, and geopolitical risk premia. For active traders, several reports consistently drive volatility.
The weekly US Energy Information Administration inventory report is a primary catalyst, especially when draws or builds diverge sharply from expectations. The Baker Hughes rig count provides insight into forward US production trends. Monthly OPEC reports and compliance headlines from OPEC plus meetings can quickly shift expectations for supply discipline. In addition, macro data such as US CPI and payrolls affect the US dollar and demand expectations.
Recent sentiment has been driven less by generic macro and more by specific geopolitical escalations. In mid January 2026, reports of renewed shipping disruptions in the Red Sea and heightened attacks on energy infrastructure in the broader Middle East reintroduced a supply risk premium. Subsequent headlines around joint US and Israeli military action targeting Iranian facilities over the weekend, alongside confirmation of the death of Iran’s Supreme Leader, significantly raised concerns about regional retaliation and potential disruption to Strait of Hormuz flows. Given that a meaningful share of global crude passes through that corridor, traders rapidly repriced tail risk.
At the same time, OPEC plus maintained disciplined output guidance, resisting pressure to accelerate production increases despite higher prices. This combination of tight supply management and rising geopolitical risk created a supportive backdrop into February.
Beyond headlines, traders should monitor term structure. A shift deeper into backwardation would signal physical tightness, while flattening spreads could indicate risk premium fading. Refinery maintenance season and US driving demand into spring are also factors to watch.
What the Market Has Done
• From November to December 2025, sellers stepped down offers forming the descending trendline, while compressing towards the 55 level. The structure reflected sellers in control with lower highs, as the market discounted softer late year demand expectations and strong US production.
• In early to mid January 2026, the trendline was broken as buyers gained initiative, while sellers were not able to defend, losing the battle. The upside break coincided with headlines of renewed Middle East tensions and shipping disruptions, which reintroduced a geopolitical risk premium into price.
• The market then consolidated in two way action between 62 and 58.5, defined by the January Monthly VAH and Daily Level 3. This balance reflected digestion of gains as participants assessed whether geopolitical headlines would translate into sustained supply disruption.
• In February, buyers were able to initiate again and accept above 62, which was followed by two way consolidation to re-establish value. Continued reports of regional escalation and firm OPEC plus messaging supported acceptance higher.
• In the past week, buyers appear to have taken initiative again as prices were auctioned up towards the 68 area and bids stepped up at 64. Crude markets have been reacting strongly to the largest reported United States military buildup in the Middle East in years, which included deployments of aircraft, warplanes, and carrier groups amid heightened tensions with Iran over nuclear negotiations that have extended without a breakthrough and growing geopolitical risk. The unresolved talks between the United States and Iran, coupled with a marked increase in U.S. and allied military assets positioned in and around the region, have raised concerns among traders about the potential for conflict or supply disruption in the Strait of Hormuz; a critical chokepoint for global oil flows. Elevated risk premiums and uncertainty around whether diplomacy will succeed have been cited by analysts as contributing to stronger crude price behavior in recent sessions.
What to Expect in the Coming Weeks
The key level to watch remains the 64 level, defined as the mid of Bid Block 2.
Bullish Scenario
• If buyers are able to defend bids at 64, and volume and pace pick up as market compresses towards 68, expect a possible break above 68.
• A break and acceptance above 68 opens the path towards the 72 area, defined as Daily Level 1.
• A sustained upside move could be driven by continued escalation following the coordinated U.S. and Israeli military strikes on Iran over the weekend of February 28, 2026. Global energy markets have already started pricing in a significant geopolitical risk premium after crude prices climbed to multi-month highs amid the conflict, which triggered retaliatory missile and drone attacks by Iran against U.S. and allied positions across the Middle East. The heightened risk of supply disruption through the Strait of Hormuz, a route that handles about one-fifth of the world’s oil shipments, and uncertainty around how far the conflict might spread could keep buyers in control and support further gain
Neutral Scenario
• If buyers fail or are unable to sustain a break above 68, expect a move down back to 64 and subsequently towards 62, with the potential for rotation within the broader range.
• Expect two-way auction between 68 and 62 as the market waits for further fundamental catalysts.
• This could unfold if geopolitical tensions stabilize without material supply disruption, while inventory data and macro indicators remain mixed, keeping both buyers and sellers responsive rather than initiative driven.
Bearish Scenario
• If bids fail to hold at 64, expect a move down to 62, aligned with the January Monthly VAH.
• If buyers fail to defend at 62, expect a move down through Bid Block 1 to 58.5, defined as Daily Level 3, where buyers are expected to respond.
• This scenario could be triggered by rapid de-escalation in the Middle East, confirmed restoration of secure shipping routes, surprise inventory builds from the EIA, or signals from OPEC plus that additional supply may be brought online to cool prices.
Conclusion
Crude Oil remains technically constructive as long as bids hold at 64 and price acceptance develops above 68. A sustained break and acceptance higher would signal continuation toward the 72 area, while failure to defend key pivots would shift the market back into balance and two way auction.
Fundamentally, the backdrop remains supportive due to escalating tensions in the Middle East, stalled nuclear negotiations between the United States and Iran, and the recent U.S. and Israeli strikes that have elevated supply risk through critical transit routes such as the Strait of Hormuz. The geopolitical risk premium is now a central driver of price behavior, and further escalation or de-escalation will likely determine whether momentum extends or fades.
Traders should monitor both order flow at key technical levels and incoming geopolitical headlines, as either could quickly shift control between buyers and sellers.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
HVN - High Value Node
LVA - Low Value Area
SP - Single print
ATH - All time high
Long
Global Supply, China Demand, and the Soybean OutlookGlobal Flows, Policy Risk, and the Headlines Driving ZS
Soybeans futures trade under the ticker ZS and represent one of the most globally interconnected agricultural contracts. Price is primarily influenced by United States acreage and yield expectations, South American production, export demand from China, currency movements, biofuel policy, and freight dynamics along major river systems.
The most important recurring reports for traders include the United States Department of Agriculture World Agricultural Supply and Demand Estimates report, commonly referred to as WASDE, the Prospective Plantings and Quarterly Stocks reports, weekly Export Sales data, and Brazil and Argentina crop updates from agencies such as CONAB in Brazil. Weather models during the United States growing season and during the South American summer are also critical drivers of volatility.
On the global stage, the United States, Brazil, and Argentina remain the dominant exporters. Brazil has overtaken the United States as the largest exporter in recent years, while China remains by far the largest importer, typically accounting for more than sixty percent of global soybean trade. Any shift in Chinese crush margins, hog herd dynamics, or trade policy has an outsized impact on price discovery in ZS.
Recent sentiment has been shaped by several specific developments. In late 2025, persistent dryness across parts of central Brazil raised concerns about yield potential during early pod setting, contributing to risk premium being priced into futures. At the same time, renewed tension in the Black Sea region and ongoing instability in parts of the Middle East increased broader commodity risk appetite, spilling over into grains as funds added exposure across the agricultural complex.
In December 2025, soybeans came under pressure after updated Brazilian production estimates pointed to better than feared output, while Argentine weather improved with timely rains. The United States dollar also firmed on stronger economic data, weighing on export competitiveness. Additionally, weaker Chinese crush margins and reports of slower import pacing added to the bearish tone.
In early February 2026, headlines shifted after the United States Department of Agriculture reported daily flash sales of U.S. soybeans to China. The purchases were viewed as state backed buying amid renewed trade engagement, reinforcing expectations that Beijing was actively securing U.S. supply despite Brazil’s advancing harvest. The confirmation of Chinese demand forced a repricing of export expectations and triggered initiative buying, shifting short term order flow back to the upside.
Going forward, traders should monitor additional USDA flash sales to China, updates tied to the U.S. China trade communication, and any policy signals that suggest acceleration or pause in Chinese purchasing activity. These are the macro headlines most likely to influence price in the near term.
What the Market Has Done
• Since 2024, the market has been in a large sideways range until April 2025, where the market started to compress as buyers stepped up bids and sellers stepped down offers within the range. Buyers were able to overwhelm the offers and the market broke out of the compression in October 2025, auctioning up to 1190 (daily level 2). This breakout coincided with mounting concerns about Brazilian dryness and elevated geopolitical tension that lifted the broader commodity complex.
• Buyers attempted to hold above 1140, which marked the high of the multi year range, through November 2025, but failed. Sellers took back control and auctioned prices back down within the larger multi year range, down to 1055 in the vicinity of the October 2025 VPOC, where buyers stepped up to defend. The December 2025 selloff aligned with improved South American rainfall forecasts, firmer United States dollar conditions, and softer Chinese demand signals.
• From the last week of December into January 2026, the market balanced and formed a bid block, rotating within value as participants established acceptance near the lows.
• In the first week of February, buyers initiated and the market imbalanced out of the January 2026 VA after the United States Department of Agriculture reported daily flash sales of U.S. soybeans to China. The announcement came amid renewed trade dialogue and reports that Chinese state buyers were actively securing U.S. cargoes despite Brazil’s advancing harvest. The confirmation of large export sales shifted near term demand expectations and forced short covering, allowing price to reclaim 1135 and rotate back into the offer block with pace.
What to Expect in the Coming Weeks
Key level to watch is 1140, which aligns with the November 2025 VAL and the offer block low.
Bullish Scenario
• If buyers are able to defend 1140 at the offer block low, expect the market to move up to 1190 (daily level 2), where sellers are expected to respond.
• If price breaks and accepts above daily level 2, expect continuation toward 1220 at the June 2024 VPOC. This would be significant, as it would mark the first return to that level since June 2024 and confirm a structural shift in control to buyers.
Neutral Scenario
• If the market approaches the edges at 1190 on the top and 1140 on the bottom without pace and volume, expect possible false breaks at the edges and reversion back into the offer block range.
• Expect a two way auction within the offer block range as the market establishes value higher, with rotational activity dominating until a catalyst provides expansion.
Bearish Scenario
• If buyers are not able to defend 1140, expect long liquidation and a move back down through the current month LVA toward 1070 in the vicinity of the bid block and trend line.
• At that level, expect buyers to respond, but failure there would open the door for a deeper rotation back toward 1055 (Oct 2025 VPOC).
Conclusion
Soybeans are trading at a macro sensitive inflection. Technically, 1140 defines whether buyers maintain initiative or lose control back into balance. Fundamentally, the dominant driver is sovereign level demand and trade policy, particularly confirmed Chinese purchases of U.S. supply and the tone of bilateral trade communication.
If additional USDA flash sales confirm continued Chinese buying, the technical structure supports acceptance above daily level 2 and continuation toward the June 2024 VPOC. If demand headlines fade, the market risks reverting back into prior balance.
Watch the headlines, then watch the response at key levels. That reaction will reveal whether this move is repositioning or true structural change.
This article is for informational and educational purposes only and does not constitute financial advice. Futures trading involves substantial risk and is not suitable for all investors.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VA - Value Area
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
HVN - High Value Node
LVA - Low Value Area
SP - Single print
ATH - All time high
Nasdaq Consolidates as AI Narrative ShiftsRecent Macro Headlines Driving Market Sentiment
Equity markets entered 2026 with strong momentum following a powerful fourth quarter rally in 2025. However, sentiment shifted quickly as specific developments began to challenge elevated expectations, particularly in the technology sector.
Late January earnings from major technology companies influenced market behavior. Microsoft issued guidance that pointed to moderating cloud growth as enterprise clients showed more disciplined spending. Alphabet reported softer advertising trends in select international markets. Apple cited uneven hardware demand in China, adding to concerns about global growth exposure. None of these updates signaled a collapse, but positioning had become crowded and expectations were high, which made the market vulnerable to disappointment.
Beyond earnings, artificial intelligence related narratives have had a meaningful impact on sentiment. Markets have been grappling with a shift in the AI story from pure growth catalyst to source of disruption risk. Software and service stocks exposed to AI disruption saw significant repricing after investors intensified concerns that fast advancing AI tools could materially undercut established subscription based models and enterprise revenue streams, driving some software leaders lower in early February. Analysts and traders have pointed to fears that automated AI agents could replace traditional enterprise software functions faster than expected, which pressured names across the S&P 500 Software & Services index. These concerns were amplified by heavy capital expenditure forecasts from hyperscale platforms and questions about when that investment will translate into sustainable profit growth.
Selloffs in sector specific ETFs linked to software and AI narratives have coincided with broader weakness in the technology complex, reflecting investor sensitivity to both the potential and limitations of artificial intelligence. At the same time, some analysts highlighted diverging views on the AI theme, with others arguing that fears about AI replacing core business functions may be overblown or driven more by sentiment than fundamentals.
At the same time, the latest CPI release on February 13 showed inflation cooling more than expected, with both headline and core readings moderating from the prior month. While this helped ease immediate inflation concerns, the labor market has remained resilient, keeping the Federal Reserve cautious about signaling aggressive rate cuts. Treasury yields have remained volatile as markets recalibrate the timing and pace of easing rather than pricing a straight line move lower. Long duration growth stocks experienced two way trade during this repricing, and the Nasdaq Composite, which had led the 2025 rally, saw increased volatility as traders adjusted exposure to high multiple technology names.
What the Market Has Done
Since the start of 2026, the market attempted higher to revisit all time highs at the end of January but failed, and sellers responded and offered prices down back to 25500 (Daily level 1), where buyers previously were able to defend since mid December 2025.
An attempt was made by buyers on February 2 to bid prices back up again from this level 25500, but it was not sustained. As technology earnings reactions and rising yields weighed on sentiment, this failure invited additional supply.
This triggered a long liquidation as the market broke below 25500 and swept down to 24250 (Daily support), where buyers have defended since October 2025.
Buyers have since stepped in and the market was able to rotate back up to 25500, Daily level 1.
In the past week, sellers held offers in the 25500 area and price rotated back down through the current range between 25500 and 24500, marking Daily level 1 and Daily support respectively.
The inability to reclaim Daily level 1 on the first bounce suggests that supply remains active near the top of the range, particularly as macro uncertainty persists.
What to Expect in the Coming Weeks
Key levels to watch are 25500, Daily level 1, and 24500, Daily support.
Neutral Scenario
Expect a two way market within the current range of 25500 and 24500 as markets attempt to re-establish value.
Clues that the market is preparing for a directional move would include range compression and volume skewed to one side of the range.
Watch how weekly VPOC develops within the range and whether weekly value begins migrating higher or lower.
Bullish Scenario
• If buyers are able to hold bids above 25000, which is the midpoint of the current range, this would be an early clue that the bullish scenario may be developing.
• A break above and acceptance above 25500 would confirm this thesis.
• In that case, expect a move toward 26200, which aligns with Daily resistance and the October 27 weekly VAH.
Bearish Scenario
• If sellers step down offers within the range and hold prices below 25000, this would be an early clue that sellers are gaining control.
• If buyers fail to defend 24500 and bids begin slipping, expect a move down through the August 2025 consolidation range.
• The next downside objective would be 23500, which marks the next Daily support and aligns with prior balance structure.
Conclusion
The Nasdaq is currently balanced between Daily level 1 at 25500 and Daily support at 24500, reflecting a market that is rotating rather than trending. Technically, the failure to revisit ATHs and the inability to achieve acceptance above 25500 signal responsive sellers at the upper end of the range, while repeated defenses of 24500 show that buyers are still active at lower references.
Fundamentally, the backdrop has become more nuanced. Earnings guidance from mega cap technology firms has tempered expectations, while the AI narrative has shifted from pure optimism to a more measured debate around capital expenditure intensity, margin impact, and the timeline for monetization. At the same time, rate expectations remain fluid as markets recalibrate the pace of Federal Reserve easing against a resilient labor market. This combination of earnings recalibration, AI repricing, and shifting rate expectations has reduced risk appetite and reinforced the current balance structure.
A sustained move will likely require alignment between order flow and macro catalysts. Stabilizing yields and renewed confidence in AI driven earnings growth could support acceptance above 25500 and open the path toward higher resistance. Conversely, continued rate repricing or further margin concerns tied to AI spending could pressure 24500 and expose lower daily supports.
As always, let price at key references confirm the narrative rather than assuming it.
Are you seeing initiative activity building at the edges of this range? Please feel free to leave a comment and give a boost so that more people can join in the conversation.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
HVN - High Value Node
LVA - Low Value Area
SP - Single print
ATH - All time high
Bitcoin Faces Key Test as Macro Pressures Influence Price ActionRecent Market Forces Shaping Bitcoin’s Direction
Bitcoin sentiment has shifted noticeably since late 2025 as optimism about greater institutional adoption met a more challenging macroeconomic environment. The most important headline for Bitcoin has been the change in expectations around global liquidity. Since November 2025, markets have repriced the path of rate cuts as US inflation data re-accelerated and labor markets remained resilient. This pushed bond yields higher and strengthened the US dollar, creating a headwind for Bitcoin and other risk assets.
Another specific driver has been ETF related flows. Spot Bitcoin ETF inflows slowed materially through November and December after a strong first half of the year. Several weeks of flat to negative net flows reduced the marginal bid that had supported higher prices earlier in 2025. At the same time, miners increased hedging activity into year end, adding incremental supply during a period of weaker demand.
Across the broader crypto complex, performance has been mixed to weak. Large cap altcoins have underperformed Bitcoin, while smaller tokens saw sharper drawdowns as liquidity thinned. This has reinforced a defensive tone within crypto, with capital rotating back toward Bitcoin dominance rather than expanding risk. Overall sentiment can best be described as cautious and reactive rather than outright bearish, with participants focused on where longer term value may re-emerge.
What the market has done
• Since the end of October 2025, buyers lost control of 110000, which aligned with the 2025 developing VPOC. Sellers were then able to take control and offer prices back down toward the 87700 to 83100 area, which corresponds with the 2024 VAH and a key yearly level.
• From November 2025 through January 2026, the market balanced between 98600 and 83100 as buyers and sellers fought for control. This period reflected uncertainty around macro policy direction, slower ETF inflows, and reduced risk appetite across global markets.
• In the past week, buyers failed to defend the 83100 area. Price auctioned aggressively through the 2024 value area and reached the 60200 area, which marks the 2024 VAL. Buyers have responded at this level, suggesting responsive demand at longer term value.
• The broader decline since November 2025 has occurred alongside tighter financial conditions, a firmer US dollar, and fading expectations for near term monetary easing, all of which historically pressure Bitcoin valuations.
What to expect in the coming weeks
Key levels to watch are 82000, which aligns with a yearly level and offer block 2 low, and 60200, which represents the 2024 VAL.
Neutral scenario
• Expect the market to consolidate and auction two way between 82000 and 60200 as value is rebuilt.
• This scenario would likely align with stable macro data, no major policy surprises from central banks, and muted ETF flows that neither add nor remove significant demand.
Bullish scenario
• If buyers are able to step up bids within the current range, it may be an early signal that the bullish scenario is developing.
• A break and acceptance above 82000 would open the door for a move back through offer block 2 toward the 100000 area, which aligns with the 2025 LVN, where sellers are expected to respond.
• A bullish outcome would likely require renewed ETF inflows, easing financial conditions, or a clear shift toward more accommodative monetary policy.
Bearish scenario
• If sellers begin to step down offers within the range and compress price toward the 60000 area, it would hint that the bearish scenario is in play.
• A break and acceptance below 60000 would suggest continuation lower toward the 40000 area, which aligns with the 2023 VAL, where buyers are expected to respond.
• This path would likely coincide with further tightening in financial conditions, stronger dollar trends, or renewed risk off behavior across global markets.
Conclusion
Bitcoin is currently trading at a critical inflection point where longer term value is being tested against a challenging macro backdrop. Technically, the response at the 2024 VAL near 60200 is constructive, but acceptance back above 82000 is needed to shift the balance in favor of buyers. Fundamentally, the next sustained move will depend on liquidity conditions, ETF flows, and how global markets price the path of monetary policy. Until clarity emerges, Bitcoin is likely to remain in an environment where patience and level awareness matter most.
Let me know how you are positioning around these key levels and which scenario you think is most likely to play out.
Disclaimer: This is not financial advice. Analysis is for educational purposes only; trade your own plan and manage risk.
Acronyms:
C - Composite
w - Weekly
m - Monthly
VAH - Value Area High
VAL - Value Area Low
VPOC - Volume Point of Control
LVN - Low Value Node
HVN - High Value Node
LVA - Low Value Area
SP - Single print
