Macro Update – 07/15/2025

[00:00:00.07] - Speaker 1
Sam.

[00:00:41.02] - Speaker 2
Good morning Tim. And welcome back to this macro Weekly macro update together we are here with Tim. Welcome again, Master.

[00:00:50.09] - Speaker 1
Yeah, good morning ladies and gentlemen. Hi Fabio.

[00:00:55.21] - Speaker 2
Yeah, take it away, Tim. So on you.

[00:00:58.03] - Speaker 1
Yeah, sure. All right. Not Monday, Wednesday. But yeah, still a little bit to cover for the week. Also from the last week. Good. Last week was kind of boring. I know you guys, I know usually this sketch is a little bit different but today is Wednesday so I kept it a little bit more shortly because last week wasn't that much stuff. That is really, really important. I guess maybe most of you have watched crypto charts, bitcoin charts and all this stuff. Yeah. If you made some money over there, tremendous story, congratulations from me. Pretty cool to watch. Yeah, your all time highs after days or weeks of accumulation and rage trading in bitcoin futures. Pretty cool. So yeah, if you made your fair share over there, good job. Okay, let's dive into this week. It's already Tuesday today, Monday, global Open SPX chart over here. 50 minute time frame. We kept down a little bit during the weekend. We had new announcements of 30% tariffs for the UK US EU relationship. We have thought about that. All the stuff get bought, right. The markets are kind of resilient to this kind of news already. They don't believe that much.

[00:02:26.12] - Speaker 1
The US administration will finally pull off all these tariffs and negotiations will kick in. So stuff is a little bit dodgy to trade because you always have to. Yeah, trade the same stuff. When markets gap down it creates a few basis points for everyone to buy again and to ape in again and yeah, sending SPX to new all time highs. Then we had Monday yesterday after the close to the Globex open session. Some news with Nvidia was also kind of bullish in the overnight session they are allowed to sell some trade chips to China again I forgot the name kind of. But also yeah, Nvidia gapped up overnight. Of course ES and Q affected this as well. The more, let's call it traditional stuff like Dow Jones YM futures were kind of flat overnight. But this is the, this is the view how the day this Tuesday has started. In the morning two and a half hours ago we had. Yeah, CPI number market reaction was kind of dull. If I'm looking now at futures, we are yeah, kind of a little bit lower already or daily lows. Yeah, nothing that much dramatic. I would say the higher number was kind of kind of expected from the market.

[00:04:02.01] - Speaker 1
So yeah, let's not wonder. We are selling a little bit off from these highs. But if you are watching closely Volatility, it seems pretty normal. As long as we are not crashing out today and ending today way, way lower. I wouldn't put that much effort into it to yeah try where this move came from. Tomorrow is then ppi. But I have a slide for this a little bit later. Yesterday we had an announcement from Donald Trump to prop up the weapon deliveries into Ukraine that was also talking, expected talking. It was a little bit kind of a rumor but really, really interesting nevertheless that Volodymynski, the president of the Ukraine and Donald Trump, the US President had a chatter if it's possible, if the US delivers long range weapons for Ukraine, if it's possible to reach Moscow with this stuff. Right. That's the reason we have the ticker ITA here which is the US Aerospace and Defense ETF was one of the outperformance yesterday in terms of sectors was like up 1-718%, I guess. And yeah all the powerhouses are in there. Lockett Martin, RTX, L3Harris but also smaller names like Textron and also some companies that are manufacturing drones.

[00:05:37.19] - Speaker 1
Just pitching this over here because this stuff can run pretty. Pretty yeah far because the story behind this, all the stuff has to be manufactured. Right. That makes sense. So. So those companies have maybe a fuller order books. On the other hand the stuff gets paid by the EU and as we all know the European Union has released some bigger fiscal packages. Yeah. In terms of money creation for defense share of GDP. Yesterday France already announced that they will double their expenses in the defense sector. So yeah there's maybe a little bit more juice in yeah this trade over here but as you can see open sets. Yeah all time highs closing from yesterday a little bit. So wait and see I would say but maybe a little bit of a. Yeah long term chance for you because these contracts are already assigned and approved. Small hint over there. Donald Trump made a little bit yeah. Of a deal type to it to Russia that those weapon deliveries will be coupled to defect. If Vladimir Putin does not end the war in 60 days, this stuff will come into action. So there's a little bit of a time horizon you have to watch.

[00:07:09.12] - Speaker 1
But yeah, maybe cool trade idea. That's up to you. All right for this week. What's left obviously today inflation mentioned it already slightly hotter than number. If you want to drill more on this stuff which is usually a little bit of brain damage because yeah inflation numbers are always a little bit fuzzy. Fun fact here. The inflation I was a little bit higher because the core goods component of TCPI has shown pretty yeah bigger Moves over there. And maybe that's because of the reaction we are seeing in markets today. Not sure here tomorrow PPI as always after the CPI there's pbi. This is expected now a little bit higher as well because there's some sort of correlation between CPI and pvi. On Thursday retail sales and as every week initial jobless claims and Friday Michigan consumer surveys. This was the stuff that was yeah viewed as pretty interesting and important in April where we traded through the tariff tantrum. I don't think it has the same impact on this Friday as well because on Friday is options expiry. Right. It's the third Friday in the month so this will be the topic at least for DES Q traders or if you also have option trades over here it's more important for this day.

[00:08:50.25] - Speaker 1
Yeah, the big big chart in the middle I mentioned it already Bitcoin massive liquidations for the crypto bears that yeah tried to shorted those all time highs. If you have listened to the stuff we published last week in the crypto week we already mentioned that. Yeah the appreciation of crypto, Bitcoin, Ethereum and all this stuff is already so so big. Right. Also governments are fumbling around in this as well and yeah was a pretty bullish sentiment. Beers got whacked over here. And yeah as always if you have those squeezes where people get liquidated pretty, pretty big number over 1 billion at the all time highs. We also have the earnings season kicking up this week. Today we had already Wells Fargo and some other banks and tomorrow we have asml, Goldman Sachs, bank of America, Morgan Sendai. And now a hint from my side. That's the reason for the next weeks I will share always the earnings that are viewed from my side. Yeah, it's kind of important. The banks are always kind of important because you can yeah a little bit do your duck in over there how they are performing and how their business is going or has has gone the last last quarter.

[00:10:25.29] - Speaker 1
Because if banks are doing good, right. Probably economy is good as well. Speaking of. Yeah. The consumer, you and me, consumer behavior, credit card spending, all the stuff goes a little bit in there as well. And nevertheless they have also pretty pretty big ratings in their indices where they are located. Right. The same goes for stuff like ASML and tsmc. Here we are speaking about semiconductors, right. As you know it's still in play the semiconductor bull run. So looking at those numbers or the reaction in the index or if you have exposure in ETFs like the SMH it's always yeah kind of Important and yeah the first kind of important text talk on Thursday. Netflix will support the report. And yeah, a little bit of a side quest from the US administration is still to throw Jerome Powell under the bus. That's the reason why I added this little headline here from Scott Besant. Yeah. That he suggests to Jerome Powell he should leave the board next year when his term is over. This is not really interesting if you are trading stocks or yeah equity futures, stuff like that. 40 FX traders, bond traders.

[00:11:51.16] - Speaker 1
This stuff matters a little bit. Right. Because it can change fiscal and monetary outlook a little bit. But yeah, just mention those headlines a little bit that you guys are a little bit briefed. What's going on under the surface. And for today I have choose two topics. One topic is with the upcoming earnings season we will look a little bit into the spx what's going on over there and we will start with this chart over here. I also started labeling those charts a little bit. I don't know how many folks are. Yeah we watching over mobile phone here and I can. Yeah kind of think those screens are a little bit too small and you don't see the charts that correctly. That's the reason why I labeled them a little bit here to yeah navigate a little bit better. All right. Nothing stops the strain until OPEX on Friday. Good question. But I can just only answer one of them with the opex. I don't know. Right. It's options expiry. You have to see it live what happens over there. But nothing stops the strain seems like a likely outcome. Right. If I look around at my bubble and yeah compare the different views that other people are having.

[00:13:22.26] - Speaker 1
Not everyone was really surprised that after the sell off in. Yeah earlier this year in March, April we had those kind of violent pushbacks to all time highs. Right. And this stuff maybe will get enforced in the next weeks with the earnings season kickoff. It's also the opening of the so called buyback window. Right. If this term is pretty new to you. Single stock buybacks they get usually announced with the earnings report. The company then yeah shows you a number like I don't know, Meta or Amazon 4550 billion share buybacks. Right. That's liquidity because it's kind of a trade, right. Those shares are getting bought back from the market. Someone has to pay a bit offer over there. Liquidity is always good. We need liquidity for the market. The more the better, the heavier we can move. And as you can see with the big chart, the biggest one, the graph buybacks. This stuff is about to Kicking in in around 12 weeks. Right. It then goes parabolic. It also has always this pattern over here. Right. Because those buybacks are usually kind of associated with the earnings report season and yeah, this is a positive.

[00:14:51.10] - Speaker 1
Yeah, tailwind, right. For SPX news, whatever. Also a little bit smaller chart which is also labeled with buybacks announce buybacks hit a record high for S&P 500 corporates post the Q1 earnings season. Q1 is already behind us but as the gray graph in this chart shows us or the estimate for later is also at recent highs. Right. So that means corporate buybacks in terms of money, in terms of billion and we are yeah, speaking about 350400 ish or billion in buybacks in the SPX complex. That's big money. Right. The stuff has to go somewhere and as mentioned that's liquidity overall. And the smaller chart over there, CFTC futures positioning for the S P 500 increase to the buy side. Right. So usually you can look at this stuff at the cut report if you have access to this stuff. Those charts are here, I think they are from BNP Paribus. Yeah, they are. This is already net out by sell. By sell. Right. And as you can see we are going to the upside here again in positive territory. So systematics are back as well. They are, yeah, just simply buying the futures. I also included some stuff that we are running at Mentor Q.

[00:16:34.14] - Speaker 1
Some of the models with the momentum score in the chart with the red arrow. It's pretty interesting because you have all time highs or at least ranges that are creating all time highs like once a week or stuff like that. But the momentum is fading a little bit and now it gets kind of interesting. Yesterday I have read a pretty big research paper and the conclusion of the paper was boiled down that short term upside plays pretty, pretty well since a few weeks. But long time upside is kind of. Yeah. Risky. Why is it like that? The chart with the blue arrow shows us the implied volatility in red and the historical volatility in white. So this is. Yeah, from the beginning of this year's. Beginning of this year? Oh no, it's 30 days. Yes, for the day. And as you can see, realized volatility isn't single digit numbers. Right. It's below 10%. It's pretty pretty. Yeah. Dull market is drifting higher and yeah, I think we can draw a conclusion here with the research paper I have read. And just by looking at these two numbers you can still bet on short term upside but in the long term it gets a little bit yeah, more difficult to gain and have a pretty, pretty good risk reversal over here.

[00:18:09.11] - Speaker 1
Right. Also the green chart shows us at the green arrow. The little chart on the left shows us CCA positioning. Yeah. From one month ago in the minis for the S&P 500, the NASDAQ and also the German ducks which is pretty, pretty interesting. More to this later but if we start at 1 month ago positioning you can see those CTAs they were kind of flattish, right? They bought a little bit from the upside. They had a massive turn out of April and also May because they have shorted the index to a pretty, pretty big extent. This stuff has switched. Now you just have to remember we are seeing percentage numbers here. But speaking of rate of change, it looks even more violent because the CTA positioning Indian NASDAQ one month ago 0.14 and now it's 0.37%. That's nearly over twice full time. Yeah, three times higher than it was one month ago. So the rate of change was pretty big. But we are stalling over here. Nevertheless those systematic guys are still long and probably riding the train a little bit longer. Interesting in the ducks, massive outperformance one month ago. CTAs are dealing a little bit back over there.

[00:19:45.25] - Speaker 1
If we're looking at the numbers from Friday which is labeled as CTA positioning yesterday but if we are looking at CTA positioning from Monday, there is also a little bit increase already to see. So because I'm German, I also know a few tax traders and they are constantly busy with shorting all time highs all the day. Then they make a few bucks, they get stopped out and they have a new all time high. So conclusion, full stuff. If you are able to map out systematics, flows, buybacks, volatility, if we have earnings right now and you can draw a little bit of a better picture for you, it will also help you to yeah look at the broad view for the market and you will pretty pretty quickly come to the conclusion that longs or maybe still the play you should play, right? I know it's really different depending on the time frame where you're operating in, right. As a futures trade or just day trading, it's always good to make money with shorts. Don't get me wrong over here but I think we have also people in the community that are looking for like five or ten trading days time frame over there and yeah, you should think about it a little bit and yeah, do the work that's necessary behind to gain a better view if you want to short this market right Just a little bit of a reminder what will come up the next months.

[00:21:29.01] - Speaker 1
Yeah I also look a little bit in single names the yeah. Last the next weeks with earnings. Pretty excited if we can pull something cool out maybe with the five day swing model that we have. So if you want to know something about it. Yeah just let the guys know if you're the community, throw it in the discord. You can look at this stuff a little bit more in detail. So the last but not least, this is slide six. We have eight slides today. Yeah. China fxi. If you have followed my book a little bit I don't know if we have frequently listeners here or viewers. I'm always a friend of shorting the FXI in China. Especially when we have those squeezes like last year in May and in October I guess always a trade that plays out a little bit. I'm asking myself today if it's maybe a little bit different in the summer. That's the reason why I yeah brought this topic up for today. Usually this stuff if I want to trade this. I mean it's of course depends on my view and what's my idea behind this trade but looking at this stuff yesterday or today I would probably set up a trade here like on a one month time frame, 30 days with options of course.

[00:23:01.13] - Speaker 1
And so I decided to yeah take you with me and looking over the first stuff I do if I want to do this trade. Obviously there is an ID behind it. Right. Why long shiner? Why not? It's not like I'm seeing something in a chart a pattern or something like that and then I have alert on and it says me well Tim, you should buy FXI now or you should. Yeah. Short wall FXI now. No, it's always born out of research, born out of idea I've had and yeah I've read some stuff a little bit China they also reported industrial numbers I think it was yesterday after the close. I think it was 9pm EST. I guess always a little bit confused with the time zones because I'm in Europe but yeah nevertheless the numbers were kind of decent I guess And I can also imagine that the Nvidia news from today brought up the FXI today a little bit because the close yesterday of FXI was sub 37 and we kept up nearly to 4750s in the morning. But yeah, let's go over it. Usually when I play other countries outside from the US which is to be honest kind of rare I mostly trade stuff that the underlying has the USA is country I start With a overview what is weak, what is strong.

[00:24:42.19] - Speaker 1
That's the reason why you're looking at this chart over here with the SPX in orange, the EAV in. Yeah Lillac this is the European MSC Index Fund, the EWJ for Japan. This is the other Lilic. Sorry, I see two lilacs. Doesn't work that pretty much. Yeah but it's the chart closer to the spx the dark leg one and yeah then the MCHI China which is the red one. This chart is from January 25th and yeah we are seeing not just the tremendous outperformance of the spx we are also reaching the a very important high that we are will look into a little bit later. But that's always stuff how I start those ideas when it comes to charting and set up the technical stuff and yeah something like that. I mean it's not much work. Right. You can simply put in SPX then search other peers, other countries then build a chart like that. Be sure all the scales are tilted on the right side that you are not doing a chart prime and yeah from high time frame to a lower time frame. This basically how the idea gets born over there. And if you have some data, if you are a customer of Mentor Q this should be pretty easy to pull off because it's.

[00:26:18.11] - Speaker 1
All the stuff is located in the dashboard and I have to say we have a lot of stuff we have to build a little bit a process behind it and what is it usually from my side it's not in a particular order right now but I usually look at skus one month. Right. Because I mentioned already earlier my time frame for this stuff is usually one month. So I want to know do we have expensive or cheap SKU already and how is the performance in the chart? So you so called price action compared to this queue over there. It will change today with the skew I'm pretty sure because we have this kind of big upsize with the opening. Right. But it's on the list checking skew what has changed over there. Usually you should go more to call buyers I guess right. If there's no change in sku if the SKU does not get more expensive with this move in the underlying it's kind of suspicious. Right? Should also overthink this a little bit below momentum versus price. It's kind of the quote unquote newer models on Mento Q you can also look at this stuff in comparison the price action and the momentum.

[00:27:42.11] - Speaker 1
And yeah as you can see the momentum score is you have basically pinned. Yeah four. Is it four? Yeah, it is four at the spot. Price is as I told you, 37 this morning, 3750. Usually this stuff would be way, way more cooler if you can front run a move like that that we had today. But since I was just aware of the story since yesterday in the evening, it's yeah, kind of a little bit of a retrospective here. But momentum versus price always important guys, right? It's the same like pulling up a naked chart without volume or yeah. Without enough space. On the left side you see the price but that's the only information. Okay. Price is just time and the candles momentum gives you also a clue behind the move is. Yeah. Is to move fast or is the move slowly? Right. I would be very suspicious if we have a big, big expansion in price here on fsi. But the momentum is not keeping up. Really? Then you have already two decisions to make. Is it more expensive or cheap to short this move? Because the momentum is not picking up. And if the momentum is picking up, is it already too expensive?

[00:29:04.28] - Speaker 1
Right. Because if the momentum models are picking up also the prices for the optioning for the options will pick up. Right. Because that's part of the momentum model options pricing and as you guys all know, options pricing, implied volatility, you have to time this stuff, right. If implied volatility is already high, the trade is expensive. We can also circle back to this view over there. It's all kind of connected as you can see. And next thing would be positioning. I run a little bit out of spacing over here. That's the reason I have this little crop chart on the right upper hand positioning with the Netgex levels that the Mentor dashboard can give you. Obviously keep it kind a little bit simple. Pulling out the chart strikes that are looking crowded or where much, much of positioning is over there. Then draw your conclusion. What will happen over there if we have negative gamma, if you have positive gamma over there, what happens if we are reaching those levels faster than expected or. Yeah, slower than expected. You can also divide those charts in export expirations. I think we have four expirations for the stuff most of the time.

[00:30:31.07] - Speaker 1
So what is flow out or. Yeah, what is more in the time frame I want to trade if you just want to hold a few days. And what has proven a pretty, pretty good deal for me the last months is the five day swing model. Right. That's the reason we have this little fella on the right side down here. What I usually do, I just. If I have not a trade open, right. If I wanna prepare the trade. I usually map out the lower and higher bands, compare the stuff with price action and then I set alerts right in Trading View. So then I'm always aware, okay, the five day swing model gave out this or that alert in the stuff I want to trade. And then Trading View tells me, hey Tim, it's time to act, time to do some stuff. And yes, and of course and this stuff is always a little bit to your gusto how you are working. This is basically how it looks from my side. There's nothing big big to you know, tell about technical analysis. I'm not doing it at that extent. I'm just watching volume, price, what happens there in comparison.

[00:31:51.14] - Speaker 1
It's kind of the same like momentum in price. What I showed you in the model from before. I always want to see at least corresponding volume to a extended move in price. On the other hand, if this would be the top for today in fxi. I don't have Trading View open, but can check it pretty fast. It's trading at 3730s right now and the high was 3743. What I'm not want to see here is like a big red candle today with high volumes. Right. Because someone kept this price movement right, right below the G1 level which is 3750. And as you can see already that's the reason why on the left side I labeled this with former highs. Sometimes those levels are corresponding with also levels born out of. Yeah, technical analysis. Because I think we can agree someone who does technical analysis on this chart or the 30s, 3750 would be important for him too. It also seems it's important for the option market as well. Because it looks like there's big pig exposure over there. It's now a little bit of guessing are people long, are people short over there? You have to map the stuff always out a little bit with other approaches.

[00:33:28.15] - Speaker 1
Because it can also be that some people sold options over there. And if Spot is not pushing through then with a violent move they will make money when the underlying is declining a little bit. And what I also have in my charts like the FXI over here is always volume profiles for ETFs like the FXI. I know it's a little bit dodgy, sometimes work with POCs or volume profiles. But the POC is the main reason I have the stuff in here because I want to see where the most of the stuff has traded and if there is a trend. Right. Because as you can see roughly the area I put in the profiles POC question mark text. The POCs are declining a little bit down to. Yeah. 36 which is HPL from today. But then the stuff keeps up and keeps on rising again. Not that shows you corresponding how the price is going down. Also the point of controls are going down. So yeah, sellers on control, quote unquote for this. Yeah. And last one then the kicks levels. So put them daily onto here if we are trading in this area. Yeah, like today 37, 37.50. That's 50 cent move for FXI.

[00:35:02.05] - Speaker 1
This is kind. Yeah, that's kind of normal for FXI. Right. So what I usually would do, I would set our alarm now 37 but also 3750 and yeah, just wait if it get triggers today. So no trade here. And if we are hovering around this 35, 7 for the next days I would probably yeah short it again. On the other hand, if you're seeing a nice pullback over here, buying the downside around 37. Yeah, 37, something like that. So you can map out some sort of range where you want to take action. And the only thing yeah that you have to do after this stuff is basically watching how the models are changing. Right. You can also do this a little bit in your options trading platform. I don't know if you guys are familiar with the functions that you have over there but yeah, usually it's better to have this stuff all in place and yeah work with the models I showed a little bit earlier and I think we are done for today. Yeah.

[00:36:23.24] - Speaker 2
Thank you Tim, this was great. Thank you so much. And let us know guys if you have any questions. And as always, if you want to reach out to us please check [email protected] you can find all the models that Tim showed you and if you want us to cover anything in particular, just send us an email at infoentorq and we'll reply to you as well. But for now, yeah, thank you so much and see you. See you again next week, Tim.

[00:36:53.20] - Speaker 1
Yeah, thank you guys and nice weekend.