If you are having difficulty seeing this email, you can view in your browser or click here to print.

Equity markets in the US are up on the US/China trade tensions easing.  No details of what was or if something was agreed to and it sounds like both sides are motivated to diffuse tensions.  It's unlikely either side will get all they want out of this but I will guess China will likely come out of this much similar to how they were before the tariff talk started.  Importing $100 billion more US goods isn't going to change much for China's 2025 "Made in China" policy.

The biggest macro catalysts right now are:  US dollar strength, Bond weakness, Crude strength, and political issues in Italy.  US Dollar strength has already sent shocks across the world especially in the most vulnerable Emerging Market countries.   Time will tell how Argentina and Turkey among others handle things going forward.  They don't have a great track record so it's likely only to get worse.  The weekly currency note will be out later and I greatly expanded it from the last one.  

As of right now, the equity markets are off highs and if they fail at these level something more significant to the downside as a sell the positive trade news.

Notable:
US Markets - Sentiment remains muted, sideways action continues.  Micro Cap Index has exhaustion signals starting.
Hedge Fund Telemetry Trade Ideas - Added CAT short 2.5%, Sold CMCSA long.  
European Markets - Upside exhaustion near in Euro Stoxx 50,  Italy continues lower. Italian yields and others are moving higher.  
Currencies - USD and Euro update
Crude Update
Gold and Silver Update
Nikkei Index - Upside exhaustion combined with extreme sentiment
Bond Update - A short lived stalling out of the yield upside will be followed by higher highs
DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600

Here's a link to the Hedge Fund Telemetry market sentiment page with 40 charts of sentiment including equities, bonds, currencies, and commodities updated each day.   

SPX bullish sentiment is at 42% and still around the midpoint of the range in the past month.  

SPY gapped up and is off the highs.  It still is in the middle of the range from the highs to the lows.  Use 270 as the first support and 276.61 as resistance

Shorter term 30 minute tactical has seen quite a lot of upside exhaustion and it's clear that 270 level is the support level to watch.  

Commitment of traders report still shows large speculators are set up very bullish.  In the last few years, the specs have taken down exposure starting in May

Nasdaq bullish sentiment is at 37% and at the low end of the past month's range

QQQ gapped up and also has faded off the highs.  Important support is at 165/164 and resistance is at 172.53

Dow Jones DIA gapped in a big way today on the China news. Boeing is nearly 1/3 of the total gain.  I will probably step aside on BA if tomorrow is up.  

Russell Micro Cap Index has been very strong yet there are some upside exhaustion signals now in play.  Red Sequential is on day 12 of 13 and pink Combo triggered on Friday.  I have a feeling there is a lot of "tourist" money now in this index chasing performance.  Tourist money will also exit rather quickly on any weakness and considering some issues are not the most liquid it could be a fast 5% drop.  

Trade Ideas:  Added CAT short again 2.5%, Sold long CMCSA +4.5%,

Euro Stoxx 50 remains on day 11 of 13 with its upside red Countdown.  Germany was closed today

Italy was open and continued down again with the concerns of the populist's taking Government.  They have softened some of their positions yet this is a big deal and could spread to other countries like Spain, Portugal and Greece.  

Italian 10 year yield continues higher and Spain, Portugal, and Greek yields are also moving up.  CDS markets are moving in sync too.  

US Dollar bullish sentiment is at 88% and remains in the extreme zone.  A pullback is due with these levels.  

COT data shows speculators just turning from very nominal short to slightly long.  There is a lot of fire power for a US Dollar upside move.  Seeing the differences in sentiment and positioning makes me believe a short term dip followed by a larger up move is probable.  

DXY US Dollar Index had a pink Combo late last week and is on day 9 of 13 with a red Sequential Countdown.  This is still in the 3rd up wave so a pullback would be wave 4 followed by wave 5 surpassing where ever wave 3 ends.  

Euro bullish sentiment is at 10% and is extremely oversold

COT data for the Euro shows speculators who have been overwhelmingly setup bullish are still decreasing long exposure.  An unwind here is the fire power I've been talking about

Euro has been straight down after the green Setup 9 and breaking that range.  The pink Combo triggered on Friday and this is on day 8 of 13 with the red Countdown.  

Late last year this was ripping higher in a blow off phase.  The last 14 weeks have seen choppy sideways action despite the better action in Europe, Japan, and US.  Its on day 12 of 13 with the upside Countdown.  Tomorrow could trigger the upside exhaustion signal

Crude bullish sentiment is at 80% and remains in the extreme zone but down from 91% seen late last week.  

COT data for Crude shows speculators set up very very long.  This has been a risk that has not played out yet when they start to unwind.  With both sentiment and positioning set up very bullish I have to believe there is limited upside in Crude.  Add in the positive seasonality starts to taper after May.  

WTI Crude Futures remains on day 10 of 13 with an upside Countdown.  

Bloomberg Energy  is composed of futures contracts on crude oil, heating oil, unleaded
gasoline and natural gas. It reflects the return of underlying commodity futures price movements
only and is quoted in USD.  Lot's of upside exhaustion signals of late

Gold bullish sentiment is at 18% and recently hit 10%.  It might spend a little time down here

COT data for Gold shows speculators decreasing long exposure again.  There is more downside to get to the last two years in May levels.  

Gold Futures is now on day 4 of 13 with a downside red Countdown.  I am neutral on Gold

Silver is holding the lower end of the range but I have no interest in being long Silver.  Sentiment in Silver is nearly identical to Gold.  

Nikkei bullish sentiment is at 80% and in the extreme zone

Nikkei Index had a red Sequential upside 13 exhaustion on Friday and a pink Combo 13 last night.  There should be a downside reaction within the next few days

Bond bullish sentiment is at 22% and slightly up from 15% the previous day

US 10 Year had a green Setup 9 on Friday and reversed lower.  I could see a little sideways action before higher.  

TLT has a secondary Countdown on day 8 of 13.  So there is risk to the upside in yields in order to fulfill this Countdown.  

Unsubscribe me from Hedge Fund Telemetry

Hedge Fund Telemetry LLC, P.O. Box 4675, Greenwich, CT 06861, United States