Hi YXI friends,

Another day of rally for bonds and equities have improved investor sentiment at the expense of gold. Will this trend continue?

The market is now at an important junction with potential near-term resistance overhead. China has denied trade talks with the US, which is unsurprising.

In the latest tariff war, while involving nearly all of the countries globally, US is really targeting China by forcing their trade partners into the US camp. Trade talks begin with low level staff first and can take a long time before the bosses (Trump and Xi) directly face off each other.

There is also potentially less interest this time round for direct negotiations. Back in 2019, while China promised to purchase more US goods, they hardly actioned on them. Instead, China rerouted exports through Southeast Asia and South America. In short, trade talk outcomes are not directly enforceable for the subsequent years.

At the same time, while Xi’s own position within China appears immutable, Trump has the mid-terms to think about next year, with his own term limit expiring in less than 4 years. This may make trade negotiations too strenuous for quick results.

Overall, the trade war development and impact remain complex even as Trump switches tactics on the tariffs.

Now, let’s look at all the key markets across SPY, QQQ, TLT, BTC and Mag-7

Since the launch of our Model Signals, we have enjoyed a 11% return in BTC and 10% in TSLA. For those looking for the Model Signals directly, you can find them in our dedicated morning note on TSLA (free), AAPL, BTC, and TLT. We also show them in the main content below.

Table of Contents

• 1. YXI Daily Dashboard

  • Observations from today

  • SPY and QQQ Charts

• 2. TLT

  • FOMC Projections

  • YXI TLT Model Strategy Signal

  • TLT Technical Analysis

• 3. Bitcoin

  • YXI BTC Daily Signal

  • BTC Technical Analysis

• 4. Magnificent 7

  • Apple

  • Amazon

  • Alphabet

  • Meta

  • Microsoft

  • Nvidia

  • Tesla

  • YXI TSLA Daily Signal (New)

• 5. Trade Updates & Monitoring

• 6. 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 Daily Dashboard

Observations from today

1. Fed Liquidity is now back to flat versus 1 month ago. This is thanks to rising Treasury General Account balances, taking cash from the bank reserves and parking it at the Fed. On the margin, this is negative for liquidity and supportive of yields moving higher.

2. Gold / GLD sold off 2.4% yesterday, which had a Z-score of 2.5 against the past 1-year daily moves. In contrast, Bitcoin, Bonds and Equities were modestly up.

3. Amazon led the rally in the Mag-7s on a volatility adjusted basis. TSLA was up 5% with a poor set of earnings print, in a typical “sell the rumour and buy the news” fashion.

SPY and QQQ Charts

SPY (https://www.tradingview.com/x/Kkd3CYbs/)

We keep our analysis as simple as possible here. As long as SPY does not break above the trend line and the April 9 high (red dotted line), the near-term pressure remains down.

While it may look simple, the bulls have a lot work to do. There is a significant volume supply in the $555-565 region, right below the 200 EMA at $570. Getting past all of these hurdles will be a real test.

QQQ (https://www.tradingview.com/x/PGEUpyE5/)

QQQ peeked above the trend line in intraday, but ultimately closed below it. It remains below its April 9 high of $468, when Trump announced the 90-pause on tariffs.

There is also significant volume of potential supply in the $470-480 region, before the 200 EMA at $490.

In short, bullish expectations are a “show-me” story.

2. TLT

FOMC Projections

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

Fed Funds futures are largely unchanged overnight. The market continuing to expect 4 cuts in the next 12 months.

3-month SOFR Futures Yields

YXI TLT Model Strategy Signal

For greater explanations on how the model strategies work, please see my separate morning note dedicated to the Daily Model Signals (TSLA signals are free).

We employ individual proprietary quantitative models for each name we cover to outperform the Buy-and-Hold strategy. The model examines the various macro drivers and asset specific factors against an asset’s historical performances, taking positions when the conditions are favourable and moving to cash when they aren’t. It is a long-only strategy without leverage.

In interpreting the signal, there is no “minimum” holding period when the signal shows 1 (“position on”). The model strategy simply holds the asset until the signal turns to 0. This could be after 1 day, 1 week, or longer.

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