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- New Highs!
Hi YXI friends,
The equities indices are back to their all time highs, but a lot of investors have been underweight in US stocks since the crash.
It’s fortunate that we have the machine learning models telling us - “it’s risk on, hold on tight!” each day. In trading, it’s not about thinking 10 moves ahead. (Wonder why the beginning-of-year outlooks by well-paid research analysts never turn out correctly?) It’s about getting the next 1 or 2 moves right when the market presents new data.
Many of our subscribers find the new 4-3-2-1 framework useful on their own in assessing the risk assets everyday. Some do prefer sticking to the back-tested YXI Signals alone. I am grateful both are useful in their own ways.
Today, SPY’s seasonality turns positive on a 10-day forward basis. All of our equities receive 1 more point for the strong seasonality factor in July.
Our July 4th Sale has begun - you can benefit from our Premium plans with 35% off today.
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Let’s dive in!
Table of Contents
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 Daily Dashboard
Key Observations
Yields are marginally lower and steeper over the past week.
Oil retreated again on Tuesday. Gold also dropped as safe haven demands wane.
Equities pushed higher on Tuesday, but on a Z-score basis, the indices led the Mag-7s.
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 has reached the highs of February as well as our initial wave (iii) target of $606. This is the 1.382 extension of wave (i). Now, it could (and why not) push even higher into the 1.618 extension at $625, just below the resistance trend line.
SPY seasonality
QQQ has moved past the February high, and is now definitively at the 1.618 extension of wave (i). It is again trying to push past the resistance trend line.
No one knows if QQQ could succeed this time. My expectation is that if the attempt fails, we are again looking at the wave (iv) potential around $495. If it succeeds, it could run quickly to $572, the 200% extension, and retrace back to this trend line for a shallow wave (iv) pullback.
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.
FOMC Date | Before Meeting | Post Meeting | Hike/ Cut in % |
|---|---|---|---|
07/30/25 | 4.33 | 4.28 | -0.05 |
09/17/25 | 4.28 | 4.08 | -0.2 |
11/05/25 | 4.08 | 3.88 | -0.2 |
12/17/25 | 3.88 | 3.73 | -0.15 |
01/28/26 | 3.73 | 3.58 | -0.15 |
03/18/26 | 3.58 | 3.48 | -0.1 |
05/06/26 | 3.48 | 3.38 | -0.1 |
06/17/26 | 3.38 | 3.28 | -0.1 |
07/29/26 | 3.28 | 3.18 | -0.1 |
The market prices in another 5bp of cuts in the next 12 months. Currently, September looks like a “sure” deal. November also looks likely, after Powell’s testimony.
While Powell has not technically ruled out a July cut, his latest FOMC press conference made it clear that the Fed wants to observe another 2 months of data before making any decision, which makes July a surprise decision should it occur.
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
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