Hi YXI friends,

As the stock market continues to rally, many of the risk assets we cover are moving into more stretched wave 3 territories.

However, the Monday moves in bonds, gold, and Vix could signal a potential pullback going into August. I am personally cautious in chasing new trades, and would be selective with setups.

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Let’s dive in!

Table of Contents

• 1. YXI Dashboard

• 2. SPY, QQQ, (SPDW)

• 3. FOMC Projections & Rates Futures

• 4. Summary Of Today’s 4-3-2-1 Ratings

• 5. USO

• 6. 30-Year Treasury Yield & TLT

• 7. Bitcoin (BTC) & Coinbase (COIN)

• 8. Gold (GLD, GDX)

• 9. Magnificent 7 Stocks

  • Apple

  • Amazon

  • Alphabet

  • Meta

  • Microsoft

  • Nvidia

  • Tesla

• 10. Other

  • SOXX

  • PLTR

• 11. Trade Updates & Monitoring

• 12. Notable ETF Flows From Previous Day

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

1. YXI Dashboard

Bonds and Gold both travelled higher with equities. This is slightly unusual, as both assets have been negatively correlated with stocks recently.

It could signal that investors begin to worry about the downside risk in stocks, seeking protection from bonds and gold.

Our latest 20-day correlation matrix shows that TLT shares a -0.31 correlation with SPY, and GLD shares a -0.23 correlation with SPY.

VXX (VIX ETF) is strongly negatively correlated with stocks and Bitcoin, but shares a modest positive correlation with TLT, GLD, USO. We may be seeing the beginning of greater volatility but equities weaknesses going into August.

Click here for the past YXI article explaining many of the components of the dashboard.

2. SPY, QQQ, (SPDW)

SPDW is updated every Monday.

SPY (https://www.tradingview.com/x/Hd0etLNZ/)

SPY all but reached the 1.764 extension of wave (i) on Monday. The big question here is whether it can challenge the 200% extension at $652 directly. This certainly enters a more stretched territory.

SPY’s Fund Flows have been mostly positive in the past week. However, Short Interests (SI%) have ticked up.

Overall, I am turning more cautious and neutral here for SPY.

QQQ (https://www.tradingview.com/x/cG1zjc3G/)

QQQ is more advanced in its wave (iii) progression, now nearly reaching the 200% extension at $572. Both the short term trend and the momentum (RSI) are favourable in pushing QQQ towards that target.

However, the risk reward of initiating a new trade is not so favourable here.

3. FOMC Projections & Rates Futures

FOMC Projections

We use the Fed Funds futures market to understand the market expectations of future FOMC interest rate decisions.

The futures market stick with the 4-cut expectation for the next 12 months.

3-month SOFR Futures Yields

4. Summary Of Today’s 4-3-2-1 Ratings

SPY, QQQ, BTC, AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA, PLTR, TLT

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