The Push And The Pull

Daily Update on SPY, QQQ, TLT, USO, BTC, COIN, Mag-7, Gold, PLTR

Author

Yimin Xu
June 10, 2025

Hi YXI friends,

The market is now entering a period of push and pull.

The push - Fed liquidity expansion, growing G5 M2 Money Supply, a weaker USD - has been supporting the latest rally within touching distance of the all time high.

The pull - weak seasonality, high bond yields, and valuations - is slowing the investor risk appetite and therefore momentum.

It may be a futile exercise to predict the precise moment this balance breaks and the market snaps either way. I am simply patiently watching for the initial signs. We are not there yet.

If you are looking for our Systematic Signals directly, you can find them in our dedicated morning note on SPY, QQQ, BTC, TLT, AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA (free), PLTR (free).

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.

0. YXI Daily Dashboard

The Three Daily Observations

  1. Risk assets grind higher in a measured pace

  2. TSLA has found some rebound but is well below its pre-Thursday level

  3. Yields are little changed from a week ago, with the 2-year moving up more than the 10-year (curve flatter).

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

1. Macro Liquidity

(Formula: Fed Balance Sheet - Treasury General Account - Reverse Repo Program + Bank Term Funding Program)

The above chart measures the Fed liquidity, in the form of the Fed’s balance sheet, but stripping out the reverse repo program (money that money market funds park with the Fed) and Treasury General Account (money that the US Treasury park with the Fed).

While still a fairly low level compared with 2024, the Fed liquidity measure has been recovering due to 1) the Fed’s slower QT and 2) the Debt Ceiling forcing the Treasury to draw down its bank balance instead of constantly raising new debt.

On the margin, this is benign for risk assets.

(Formula: USM2 + China M2 / USDCNH + Japan M2 / USDJPY + Eurozone M2 / USDEUR + UK M2 / USDGBP)

The above chart shows the G5 M2 money supply levels in USD adjusted terms. After a big dip in October - January (due to rising USD), G5 M2 has been growing rapidly this year, adding $6 trillion. There is typically a lag - anywhere between 1 and 3 months - in terms of its impact on assets like Gold and Bitcoin

Inverse USD - 60-day Lead (https://www.tradingview.com/x/5ovhzI9F/)

As the world’s reserve currency, the USD plays a key role in global liquidity. Most of the collaterals investors use - government bonds, high grade credit - are quoted in USD. Rising USD tend to put pressure on risk assets.

The above charts shows the directional relationship between inverse DXY with a 60-day lead and SPY. Lower inverse DXY means USD is stronger and vice versa. SPY tend to perform well when inverse DXY is higher (i.e. USD weaker), with a 60-day gap.

2. SPY, QQQ, (SPDW)

SPDW is updated every Monday.

SPY is putting out two doji candles in a row. This signals that the bulls are losing momentum in the near term, as the bears cancel them out in an uptrend.

On the margin, I would be cautious chasing new trades here. But one cannot be faulted for patiently holding until we see the first sign of a snap.

QQQ has put out two doji candles that are also inside of Thursday’s candle. Overall, the bullish momentum is most definitely slowing, with RSI beginning to show divergence.

QQQ is also facing the critical resistance trend line that used to support the market in October - February. It is time to get a bit more careful.

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 %

06/11/25

4.33

4.33

0

07/30/25

4.33

4.23

-0.1

09/17/25

4.23

4.13

-0.1

11/05/25

4.13

3.98

-0.15

12/17/25

3.98

3.88

-0.1

01/28/26

3.88

3.78

-0.1

03/18/26

3.78

3.68

-0.1

05/06/26

3.68

3.58

-0.1

06/17/26

3.58

3.48

-0.1

There were little changes in the Fed funds futures overnight. The market expects 3 cuts before June 2026.

3-month SOFR Futures Yields

4. Summary Of Today’s YXI Signals

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

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