RUT Flips Bullish. SPX Compresses. BTC Trundles.
Ahoy there, Trader! ⚓️
It’s Phil…
Two postponements and one earnings report. Markets, holding their breath since Monday. Iran strike on standby. Tuesday rally on standby. Nvidia decides what gets to breathe again.
US futures sit roughly where Tuesday left them. ES indicates 7,397 around 09:25 ET, fractionally above where Tuesday’s cash close abandoned it at 7,353.61. SPX off 0.67% yesterday. Nasdaq off 0.84%. The thirty-year touched 5.19%, which a market that has spent twelve months pretending bonds were fine would prefer not to discuss.
On the charts: SPX swing continues bullish and no valid Tag ‘n Turns just yet. The Bollinger Band width is compressed – not yet completely pinched but close enough to start thinking about a consolidation opportunity.
RUT once again looks far more interesting. The TnT bull swing setup is there, we are exiting the bearish MACD-v extreme which is a good bullish indication, and we are seeing a lovely V-entry setup. A pullback above 2,765 will provide add-in opportunities.
BTC, having met target 1, has seen its MACD-v momentum evaporate and the %R bear extreme has now exited. Add a V-entry pullback into the mix and we could be looking at a trundle back up the bull ladder.
Bonds keep selling. Tech keeps hoping. Nvidia gets to decide.
Wednesday picks.
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Market Briefing:
Wednesday 20 May – FOMC minutes day. Nvidia after the close.
- Tuesday closed: SPX -0.67% to 7,353.61 / Nasdaq -0.84% / tech took the heaviest blow
- Thirty-year touched 5.19% / ten-year holds 4.676% / a number that used to require a recession warning to print
- FOMC minutes today from Powell’s last meeting / Warsh has run the committee since May 15 / the minutes describe a meeting Warsh did not attend
- After the close: Nvidia fiscal Q1 / consensus $79bn revenue / 78% YoY / Polymarket 90% beat probability priced
- Premarket: ES +0.34% / NQ +0.69% / risk appetite postponed its decision
Market Snapshot
- ES: 7,397.75 / +25.25 (+0.34%) / NATHs 7,540.00 / sitting where Tuesday left it
- YM: 49,491 / +61 (+0.12%) / Dow drifting / level 50,611
- NQ: 29,098.25 / +199 (+0.69%) / NATHs 29,782 / tech hoping Jensen delivers
- RTY: 2,759.20 / +7.20 (+0.26%) / NATHs 2,918.40 / Uncle Russ stirring
- GC: 4,486.60 / +1.20 (+0.03%) / level 5,626.80 / parked
- CL: 102.49 / -1.54 (-1.48%) / blockade active / oil refusing to react
- VIX: 18.01 / -0.04 (-0.22%) / settled, almost suspicious given the calendar
- BTC: 77,452.01 / +684.53 (+0.89%) / level 93,161.86 / showing recovery signals
Tag ‘n Turn
SPX bullish swing intact with no valid TnT just yet. RUT flipped with a proper bullish TnT setup. BTC met target 1 and now eyes a V-entry recovery. Three instruments, three stages, same conversation.
SPX is bullish at swing but the 30-minute has no fresh TnT signal printed. The Bollinger Band width is compressing – not yet completely pinched but close enough to start thinking consolidation. RUT has done the work: bullish TnT signal is in, exiting the bearish MACD-v extreme, V-entry pullback already drawn on the chart. BTC has hit target 1 at 76,459.65, momentum on MACD-v evaporated, %R bear extreme exited.
SPX Analysis
Bullish swing intact, no valid TnT just yet. Bollinger Band width compressing – not pinched yet but close enough to think consolidation. NATHs at 7,517.12 still overhead. W%R at -80.14 marks the short-term stretch.
The daily picture remains a bullish thesis above range. The 30-minute is where today’s tension lives. The Bollinger Bands are tightening into the kind of width that, given a few more sessions, would qualify as a proper pinch and force the consolidation hand. We are not there yet. We are close enough to think about it.
The Williams %R at -80.14 says short-term oversold within the bullish swing. The MACD-v is winding down rather than firing. The NYSE ADV-DECL at -1,159 on the 30-minute tells you breadth has been doing the heavy lifting for the bears since yesterday.
No valid signal means no engagement. The system waits.
Current Status: Bullish Above (Flipped) 7,267.09 / PFZ 7,231.3 / Target Pending
Gamma Exposure
Gamma flip point at 7,288.95. Put wall and call wall both pinned at 7,400. Implied vol 15.22% above historic 12.14%. IV Percentile 69%.
The 7,400 convergence is the magnet for any pre-Nvidia drift. Both walls printing the same number is the gamma equivalent of dealer positioning saying we are happy to sell rallies and buy dips here. The flip point at 7,288.95 sits roughly 65 points below cash, which is the cushion before negative gamma kicks in and amplifies any downside.
IV at 15.22% against historic 12.14% says the market is pricing some tail risk into the close. Not extreme. Just elevated enough to notice ahead of the print.
Current Status: Flip 7,288.95 / Put Wall 7,400 / Call Wall 7,400 / IV 15.22% / HV 12.14% / IVR 29.08% / IVP 69%
RUT Analysis
RUT once again looks far more interesting. Bullish TnT setup is in, exiting the bearish MACD-v extreme – a good bullish indication. Lovely V-entry setup on the chart. Above 2,765 is the add-in level.
This is the chart doing the work. The bullish TnT signal has printed on the 30-minute. The bearish TnT signals from the prior session are being shaken off and the V-shape is forming as the move tries to base out and turn higher.
The MACD-v is exiting the bearish extreme on the histogram, which is the constructive read – momentum is no longer accelerating to the downside, it is decelerating and beginning to rebuild. The W%R is curling up from its lower zone. The NYSE ADV-DECL row is doing the same thing the price action is doing – bottoming, basing, threatening to turn.
The V-entry annotation on the chart shows the expected pullback path. Above 2,765 is the level that converts the setup into an add-in opportunity. Target overhead at 2,821.65.
Current Status: Bullish Above 2,747.3 / PFZ 2,722.85 / Target 2,821.65
BTC Analysis
Target 1 met. Momentum on MACD-v has evaporated. %R bear extreme has exited. Add a V-entry pullback into the mix and we could be looking at a trundle back up the bull ladder.
The descending channel from the head at 82,814.23 played out cleanly. Target 1 at 76,459.65 was hit. The Head and Shoulders sequence that broke out of the bull flag did its job and brought price down to the level the pattern projected.
What happens now is the interesting bit. The momentum on the MACD-v has evaporated – the histogram is flattening and the signal lines are curling back together. The %R is no longer pinned in the bear extreme zone, having lifted out and started to recover. The 1-hour shows the same thing in miniature.
This is the configuration that often produces the V-entry pullback – a short pause, a small lower test, and then the slow reaccumulation back up the ladder. The 80,121.50 level overhead is the first meaningful resistance. Above that is where the bullish thesis re-engages properly.
For now, watching for the pullback to confirm the entry.
Current Status: Target 1 met at 76,459.65 / momentum evaporated / %R bear extreme exited / V-entry pullback in play / 80,121.50 overhead
Rounding Off
The Equity Bid Did Not Blink. Thirty-year touched 5.19% on Tuesday. Tech took the heaviest blow but the bond rout that drove it is now the persistent backdrop. The SPX chart is bullish at swing but the cushion is being eroded by yields the equity tape would rather not discuss. The Bollinger compression on the 30-minute is the chart saying it knows.
Jensen Overhang. Nvidia after the close. A 90% beat probability priced means the asymmetry is already in the position. Above 7,400 needs Jensen to deliver. Below 7,288.95 hands gamma the keys. Tonight’s print decides which side of that hands gets to drive Thursday.
Expert Insights
“Price is what you pay; value is what you get.”
– Warren Buffett, Berkshire Hathaway 2008 Annual Letter to Shareholders, public
The Polymarket-implied 90% beat probability is the price that is already paid. The value, if any, is whatever Jensen says after the close that the market has not already worked into the position. A consensus that is unanimous removes the asymmetry. A beat that is priced is not a beat. A miss that is unpriced is a problem.
This is the night that separates the people who own Nvidia for the print from the people who own it for the next ten quarters. The first group spends tomorrow either celebrating or rebuilding. The second group eats their tea, runs their process, and ignores the noise.
[Source: Berkshire Hathaway 2008 Annual Letter, www.berkshirehathaway.com, public]
Fun Fact:
The Federal Reserve releases FOMC meeting minutes on a fixed schedule: three weeks after the meeting concludes. The policy was established under Chair Bernanke in 2005 as part of the Fed’s transparency push, replacing the previous practice of releasing minutes after the following meeting (which sometimes meant a six-to-eight week delay).
The three-week schedule was chosen because it gives the FOMC time to confirm the minutes are an accurate record without the lag rendering them stale. It also means that, occasionally, the minutes describe a meeting that was held under a different Chair than the one currently sitting. Today is one of those days.
[Source: Federal Reserve Board – About the FOMC / History of FOMC Communications Practices, federalreserve.gov, public]
Meme of the Day:
Happy trading,
Phil
Less Brain, More Gain
…and may your trades be smoother than a cashmere codpiece
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