Futures Plant The Flag At New Highs, The Cash Lags Behind

• Monday banked the peace deal: cash S&P +1.65%, NazQuack +3.06%, the futures printing fresh records while the cash stayed just shy of the flag.
• Oil kept draining the war premium, CL near $80 and down 3.65%, which feeds the crude continuation lower we are working.
• The VIX collapsed another 8.26% to 16.21, well within reach of the 13.38 year low.
• Wednesday is the whole game: Warsh chairs his first FOMC, with the decision, a fresh dot plot and his debut press conference all landing that afternoon.
• The 2-year sits above 4%, above the policy rate, with hike odds near 80% into year-end, the one instrument not buying the relief.
• Friday is Juneteenth, US markets are shut, and the deal signs that day, so Wednesday is the only session this week that bites.

Market Snapshot

• ES (S&P 500): 7,627.25 / +2.57% / futures pressing the 7,648.75 NATHs, the cash at 7,554.28 just shy of 7,620.90
• YM (Uncle Dow): 52,163 / +1.81% / led and exhausted almost immediately, NATHs 52,366
• NQ (NazQuack): 30,834.75 / +3.90% / didn’t quite plant the flag, NATHs 30,903
• RTY (Uncle Russell): 2,969.8 / +0.70% / led the charge and exhausted almost immediately, NATHs 3,002.1
• GC (Gold): 4,331.3 / +2.16% / catching my attention, still after a daily higher low, a cheeky 1-DTE on while it unfolds, bull swing eyes around 4250
• CL (Crude): 81.21 / -3.65% / bearish, potential little pop to $84 to sell the rally for the move down to $65
• VIX: 16.21 / -8.26% / crushed toward the 13.38 year low
• BTC/USD: 66,526.28 / +1.25% / grinding higher, the bull trigger now firmly cleared

Tag ‘n Turn

The posture is the same on both big indices, and it is the opposite of what the tag suggests. SPX and Uncle Russell are both setting up a new bear Tag ‘n Turn, but each carries a bullish MACD-v extreme, so each is one to ignore, delay, or trade on a very tight leash. The data reads this as a continuation, not a bear swing, and I am not expecting a lower Bollinger band tag before the turn. A brief push lower, a gap fill or a midpoint touch, then the bull swings likely resume.

Elsewhere, BTC is grinding higher with the bull trigger firmly cleared. Crude could pop counter-trend toward $84, which is where I will look to sell the rally. Gold is building toward a continuation higher, and I have a 1-DTE on across it overnight.

SPX Analysis

SPX is setting up a new bear Tag ‘n Turn, read Bearish Below 7,562.31.

The reason I am not leaning into the bear is the bullish MACD-v extreme sitting alongside it. The data calls this a continuation setup rather than a bear swing, so the expectation is no push to the lower Bollinger band. A brief move lower, a gap fill or a midpoint touch or a partial fill, then the bull swings likely resume. The intraday tape backed it up, with a bull Premium Popper bagged off the ORB20.

New bear tag, but the data says continuation, not swing.

Gamma Exposure

Monday’s close put the gamma flip at 7,358.11, with the put wall and call wall converged at 7,600.00 and the cash at 7,554.29. Implied volatility reads 13.27% against historic at 14.46%, with IV Rank at 16.63% and IV Percentile at 36%. GEX has major nodes from 7450 to 7600 reinforcing the short term resistance turning point, with no negative GEX yet. A push down to the next lower node around 7500, then we could see prices turn back bullish again.

Major nodes 7450 to 7600 cap the short-term resistance.

RUT Analysis

Uncle Russell led the charge higher and exhausted almost immediately, and now sits in the same posture as SPX, read Bearish Below 2,970.28. It is a new bear tag against a bullish extreme, so leave it, delay the entry, or trade it on a tight leash, and don’t expect a lower Bollinger band tag before the turn. The intraday tape was the highlight, with four Premium Poppers bagged and the new scoring system marked up across them.

Same posture as SPX, leave it or tight leash.

BTC Analysis

BTC is slowly grinding higher, with price at 66,482.13 and the bull trigger at 64,234.45 now firmly cleared. The lower edge of the cyclical turning-point zone sits down at 58,500.00. The bear anchored VWAPs are slowly being reclaimed, the chart is still flagging a potential cyclical bull turning point, and the MACD-v reads a new bull trend. The grind is the tell, this is a slow reclaim rather than a vertical, and I am content to let it build.

Grinding higher, the bull trigger now firmly cleared.

Rounding Off

Monday banked the peace deal, and that is why the tape looks the way it does. Washington and Tehran agreed a framework to end the fighting and reopen the Strait of Hormuz, oil fell about 5% toward $80, the war premium that had shadowed prices for over a hundred days began draining away, and stocks threw a party, with a record Dow and the VIX crushed toward 16. The futures pushed to fresh records, even if the cash stayed just shy of the flag.

The whole week pivots on Wednesday. The 2-year sits above 4%, above the Fed’s own policy rate, with hike odds near 80% into year-end, which is the one instrument that declined to celebrate. Warsh chairs his first FOMC, and the decision, a fresh dot plot and his debut press conference all land that afternoon. Then Friday is Juneteenth, US markets are shut, and the deal is due to sign that day, so Wednesday is the only session this week that actually bites.

Expert Insights

W. Edwards Deming, the statistician who helped rebuild postwar manufacturing, had a line that fits this morning perfectly:

“In God we trust; all others must bring data.”

It is the whole reason today’s read looks the way it does. The tape printed a new bear Tag ‘n Turn on SPX and Uncle Russell, and the gut reaction is to brace for a swing lower. The data says otherwise: a bullish MACD-v extreme, a continuation posture, no lower Bollinger band tag expected. Same with the gap. It feels like a gap should change the day-trade edge, and yet the research says it does not, not by a tick. Feel brings a story. Data brings a verdict. I will take the verdict.