Hi YXI friends,
A lot has happened over the past week, with rate-hike scares, Mag-7 earnings, and a momentum pair-trade unwind. At the same time, liquidity tightened as the Treasury General Account rose rapidly, making the market more prone to volatility.
Hedge funds (pod shops) and a lot of retail piled into the momentum chase of long-Semis vs short-Software pair trade in Q2. This meant that a small unwind from a book like Situation Awareness can snowball into a much bigger selloff across the high-momentum names like MU and SNDK.
The snowball is because when leveraged pod shops are down just a few percent in P&L, their management tends to liquidate half of their positions to control risk. Applied to thousands of managers in a very crowded trade, that’s a lot of damage in individual stocks without the S&P 500 suffering too much.
Once that liquidation finishes quickly, the market squeezes sharply higher. We observed this exact dynamic last week.
Table of Contents
DISCLAIMER: This newsletter is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, 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.
Please check out our glossary for explaining the acronyms, financial terminology, and economic data.
Macro Charts
If you haven’t already, please read our Appendix: Chart Label Guidance at the bottom of this article before proceeding.
Macro Regime
The risk axis has been all over the place this past week. Risk Z printed -1.75 on 29 July, snapped to +1.76 on 30 July, then settled at +0.21 on Friday, July 31, 2026. That is a whipsaw, not a trend.
Liquidity flipped from +0.47 on 30 July to -0.57 on 31 July, the weakest reading of the five sessions shown. A negative liquidity impulse under a Mega-Cap Leadership regime is the classic push-uphill setup, where index gains rest on a narrowing set of names.
Treasury General Account Balance
Condition: Rising, Liquidity Headwind
The account has rebuilt from about $740B in mid-July to $998B, draining roughly $260B of liquidity in three weeks. That is a materially bigger headwind than the $150B I flagged on July 27.
The past week’s rapid rise in TGA coincided with heightened market volatility around the FOMC.
SOFR - EFFR Spread (Funding Stress Proxy)
Condition:
The spread sits at 2.0bp, firmer than the 1.0bp of a week ago but still well inside its range. There is no funding stress showing here.
FOMC Projections
We utilise the Fed Funds futures market to gauge market expectations for future FOMC interest rate decisions.
Condition: Hikes ahead
The futures market prices a rising path from 3.63% today to a peak near 4.14% in mid-2027. This is still a hiking cycle being priced.
The January 2027 contract sits 35.0bp above the effective rate, down from 41.5bp on July 27. That means 1 hike plus a 40% chance of a second hike in the next 5 months.
US Treasury Yield Curve
Condition: Normal
The curve is upward sloping across the board, with 2s10s out to 44bp from 34bp a week ago and the long end still steep.
UST Yields (2Y, 10Y, 30Y)
Condition:
Yields are higher across the curve on the month, with the 30Y up 24bp to 5.23% against 14bp on the 2Y. The long end is doing the work now, and that steepening is the direct pressure behind TLT below.
TLT (Long-end Treasuries)
Price Structure: Range
Previous YX TA Bias: Overweight (July 27, 2026)
Current YX TA Bias: Neutral (Downgrade)
TLT closed at $81.92 and has lost the rising trendline off the 2025 low. S2 is past 75% of S1, with the 100% extension at $80.21, and RSI is down at 31.6.
Our “tactical overweight” last week failed, as the support level was breached. We shift back to Neutral, as there is a high risk S2 continues towards $80 before stabilising. This downgrade can be viewed like a “stop loss”.
USO (Oil)
Price Structure: Pullback
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Underweight (Downgrade)
USO has come back from the July high at $141.44 to close at $129.17, closing last week above both the 50- and 100-day MAs. The projected S2 targets $89.89 at 100% of S1.
However, today’s market open below that MA band has likely started S2 toward $89.89. I am happy to initiate an Underweight rating to capture the potential downside. The risk-reward looks justified with an invalidation above the July high and a target at $90.
DXY (US Dollar Index)
Price Structure: Pullback
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Neutral
DXY has come down from 101.80 to 99.84, losing the 50-day MA and settling onto the 100-day with the 200-day just beneath. R2 completed at 90% of R1, the projected S2 targets 98.8, and RSI is at 35.5.
I remain neutral - last week’s slide occurred quickly after the Monday rating, and the move has already matured to no longer justify the risk-reward on a downgrade.
S&P 500, Nasdaq 100, Russell 2000, Semis
SPY vs Seasonality YTD
SPY 2026 vs past 21 year average
SPY sits about 3 points ahead of the 21-year seasonal path. The average path goes sideways from here until roughly trading day 200 before the year-end rally, which lines up with the August and September weakness I flagged on July 27.
SPY today vs 2001 & 2008
This puts 2026 against 2001 and 2008 at the same point in the calendar. Both of those years were already negative by August and did their real damage from September, whereas 2026 is up 10.1%.
However, the shapes of the three years appear similar, with a V-shape run around March-April, followed by weaknesses from late May. It seems that August and September are vulnerable months, while 2001 saw a rebound in Q4 while 2008 sold off more heavily.
SPY: S&P 500
Price Structure: Range
Previous YX TA Bias: Neutral (July 29, 2026)
Current YX TA Bias: Neutral
SPY closed at $747.03, back above the 50-day MA at $744.22 after a 0.72% session, with the falling trendline off $758 immediately overhead.
I remain neutral as SPY trades in the range. A clean break of $758 is what turns me constructive.
QQQ: Nasdaq 100
Price Structure: Breakdown
Previous YX TA Bias: Neutral (July 29, 2026)
Current YX TA Bias: Neutral
QQQ closed at $687.99 and has bounced off the 100-day MA at $674.69, with S1.b reaching beyond 125% of S1.a. RSI is at 45.
I remain neutral. The measured move is well past 100%, so that leg has matured, and the 50-day MA at $714.75 caps the other side.
IWM: Russell 2000
Price Structure: Pullback
Previous YX TA Bias: Neutral (July 29, 2026)
Current YX TA Bias: Neutral
IWM closed at $291.20, a touch under the 50-day MA at $292.26, and remains at the bottom of the rising channel. S3 has now reached 90% of S2.
I remain neutral. S3 is into its last 10% of the target, so the downside objective is largely in. I am watching how IWM consolidates this week before making a tactical overweight upgrade to play the bounce.
SOXX: Semiconductors
Price Structure: Breakdown
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Underweight (Downgrade)
SOXX closed at $504.89, below the $533 neckline I flagged on July 27, and is retesting it from underneath. Price sits well below the 50-day MA at $567.58, with the 100-day at $487.54 just beneath.
I move to Underweight. The head-and-shoulders has triggered, with S2 potentially targeting $420, at 100% of S1. This likely lands at the 200-day MA as it continues to move higher.
IGV: Software
Price Structure: Pullback
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Neutral
IGV closed at $94.58, up 1.36%, back above the 50-day MA at $92.88 and now pressed right against the 200-day at $94.72.
I remain neutral. While the next leg is likely higher, the 200-day has capped every attempt since April, and it has not broken yet.
A clean break above the 200-day opens the potential R2 toward $123.35, and I would move to Overweight on that.
Magnificent 7
AAPL: Apple
Price Structure: Pullback
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Neutral
AAPL fell 7.35% on Friday to $308.91 after earnings, straight back to the 50-day MA at $309.50. S2 is nearly 90% of S1, with the 100% extension at $289.69.
I remain neutral. S2 exceeded 75% of S1 in one thrust, so the move is already mature. However, it can gravitate further towards the 100-day MA before consolidating. I would be interested in going Overweight when it reaches that point.
AMZN: Amazon
Price Structure: Rebound
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Neutral
AMZN gapped 15.3% higher on Friday to $271.58 on earnings, back above all three MAs and into the upper half of its long rising channel. R3 has already run 75% of R2, with 100% at $319.46.
I remain neutral. The July breakdown has been undone in a single session. A pullback towards the 50-day MA at $246.63 would provide a better entry for moving Overweight.
GOOGL: Alphabet
Price Structure: Rebound
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Neutral
GOOGL rose 6.73% on Friday to $356.13 on earnings, reclaiming the 100-day MA at $347.41 and closing right under the 50-day at $358.68.
I remain neutral. I expected this bounce, but it could face resistance as it moves past the 50-day MA. A close above the 50-day MA with follow-through would move me to Overweight. I will update during the week when it occurs.
META: Meta
Price Structure: Downtrend
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Neutral
META rose 3.28% on Friday to $556.71, but it has lost the $573 channel support I flagged on July 27 and sits below all three MAs. S4 has now reached 100% of S3.
I remain neutral, although a tactical overweight appears tempting here. There is a chance that S4 extends beyond the length of S3 (which was 75% of S2) to match the length of S2. I would want to see how META trades in the next couple of sessions before making that decision - after all, the prior trendline support was broken.
MSFT: Microsoft
Price Structure: Rebound
Previous YX TA Bias: Underweight (July 27, 2026)
Current YX TA Bias: Neutral (Upgrade)
MSFT rose 3.02% on Friday to $464.72 and is now above all three MAs, having held the $352.23 support through the whole selloff. R2 has reached 100% of R1 at $465.70.
I upgrade to neutral, as recent price action has invalidated my Underweight rating. I am stepping aside to observe the bigger picture here. My main question is whether the next leg is just a pullback for a new uptrend or a retest of the lows.
NVDA: Nvidia
Price Structure: Range
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Underweight (Tactical Downgrade)
NVDA rose 2.93% on Friday to $200.75, back onto the 100-day MA at $200.31 and still under the 50-day at $206.12. The head-and-shoulders is intact, with the neckline running down toward $186 and S2 measuring to $171.77.
I downgrade to tactically underweight. It is tactical because while the H&S structure is unbroken, the risk-reward for further downside looks appealing ($171 vs $215 invalidation at the highs).
This is not an opinion on NVDA’s fundamentals.
TSLA: Tesla
Price Structure: Downtrend
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Overweight (Tactical Upgrade)
TSLA rose 0.76% on Friday to $311.21 after touching $301.97 intraday. S2 has now reached 100% of S1 at $300.28, and RSI is down at 31.7.
I upgrade to tactically overweight. The measured move is complete on a floor that was drawn before the bounce, RSI is at the level where these turn, and the reward up to the 100-day MA at $388.96 is roughly twice the risk below $300.28.
This is a counter-trend trade inside an intact downtrend, not a call that the trend has changed. We could target the current 50- and 100-day MA cluster at $387, with invalidation at $272 (125% of S1), where S2 could look extended.
Precious Metals
GLD: Gold ETF
Price Structure: Downtrend, Stabilising
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Overweight (Tactical Upgrade)
GLD fell 1.49% on Friday to $371.54 and is still below all three MAs. S3 has now matched 100% of S2, the same symmetry S2 showed against S1, and price has spent a month consolidating here on rising volume.
I upgrade to tactically overweight. Three equal selloffs have completed at the bottom of the descending channel, and the base is building on real volume rather than drifting sideways.
This is a counter-trend trade inside an intact downtrend, not a call that the trend has changed. We could target the top of the channel, where volume starts to rise, as resistance at $400, with invalidation at the June low near $362.
SLV: Silver ETF
Price Structure: Range
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Overweight (Tactical Upgrade)
SLV fell 2.13% on Friday to $52.36, still holding the $50-51 shelf where old resistance is trying to act as support. S3 is 100% of S1 but only 75% of S1 and S2 combined.
I upgrade to tactically overweight, with a similar rationale to GLD. We are playing for a tactical rally towards the 200-day MA, with the trendline support as invalidation.
Crypto
BTC: Bitcoin
Price Structure: Downtrend
Previous YX TA Bias: Underweight (July 27, 2026)
Current YX TA Bias: Underweight
BTC fell 1.29% on Friday to $62.7k and has lost the 50-day MA at $63.3k.
I stay underweight. The loss of upside momentum keeps S3 intact. A reclaim of the June high near $66k would prompt me to move to Neutral. And a breakout above the 200-day MA could send me Overweight.
ETH: Ether
Price Structure: Rebound
Previous YX TA Bias: Neutral (July 27, 2026)
Current YX TA Bias: Neutral
ETH fell 1.86% on Friday to $1,848, back onto the June high it had broken above, with the 100-day MA at $1,926 still capping it. The 50-day at $1,783 now sits underneath.
I remain neutral. The March 2026 analogue where a push above the prior high failed is still live.
Clearing the 200-day MA above would move me to Overweight.
Notable ETF Flows From the Previous Week
Recent Notable Flows (% of AUM)
Flows are expressed as a percentage of the AUM prior to the flow.
Appendix: Chart Label Guidance
Every chart gets a clear, scored label. Here's how to read them, so nothing is left to interpretation.
How I set the YX TA Bias
It is a reward-against-risk statement, not a forecast. Every name reads Overweight, Neutral or Underweight based on what the chart offers at today's price, not on where I think price is going.
Structure decides which side I can be on.
Uptrend, breakout, pullback or rebound: Overweight or Neutral.
Downtrend or breakdown: Underweight or Neutral.
Range: either one, depending on where price sits between support and resistance.
In every case the tactical exception below can take me the other way.
Position in the move decides the rating. I measure the distance still to run to target against the distance to the level that proves me wrong. Two to one or better earns a full Overweight or Underweight, and anything less is Neutral. It follows that I get more constructive on a pullback towards support, not on strength into resistance.
The level that proves me wrong is never the support I am pointing at. If a name is holding its trendline, that trendline is the reason I am interested, so the risk is measured to the next level below it: the next moving average, a volume shelf where price has previously spent time, or the prior low. That keeps the stop realistic rather than flattering the setup.
Past three-quarters of the way to target, I stop adding to the move. The remaining reward no longer pays for the risk, so I will not open a new Overweight or Underweight that late in a leg. An existing rating can ride while the momentum lasts, which is taking profit rather than chasing. Once the measured move is complete, the interesting trade is usually the other way.
"Tactical" means a shorter horizon, and it can run against the trend. When a selloff looks stretched I can go tactically overweight, and when a rally looks stretched I can go tactically underweight, whatever the prevailing direction. What it costs is strictness. The measured move has to be complete, there has to be something drawable to lean on, and the reward against a stated stop still has to clear two to one. I publish the target and the invalidation so you can see exactly what would prove it wrong.
Neutral is not a shrug. It means risk and reward are close enough to balanced that I would rather wait, and on this board it is comfortably the most common rating.
The YX TA Bias reflects technical analysis only. It is separate from my quantitative models and fundamental research and may differ from them. For education only, not investment advice.
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