Stocks had their best week since April and gold printed its own record inside the same five sessions, so the scared money and the greedy money got paid off the same tape. One of them is wrong and hasn’t found out yet. My lean is with the indexes while they hold the shelf they built last week, and if that sounds like I’m just following the tape, correct.
The Week That Was
Monday opened the month with a rip and never really gave it back. Friday’s jobs report showed the economy lost 23,000 of them in July with unemployment at 4.1%, and the tape took that as good news, because a labor market going backwards makes it a lot harder to argue for another hike in September. Crude went the other direction all week after Washington called off the strikes on Iran and started talking about opening the shipping lane, and the war premium came out of the barrel in about two sessions. Gold ignored every bit of it and kept making highs anyway. VIX finished at 14.90.
ES opened the week at 7550 and closed Friday at 7778.25, spending Wednesday through Friday building value in a band it never lost. Value for the week settled at 7765.75 and the whole build sits above July’s high, so the entire prior month is underneath price now. Friday was a tight rotation inside 7743.50 to 7787.
NQ opened at 28565 and closed Friday at 29834, and the whole move happened Monday and Tuesday. Wednesday tagged 30074 and nothing has been back there since, which leaves a poor high sitting up top and July’s 30356.50 waiting behind it. Value for the week built at 29750 and Friday closed on the right side of it.
CL opened the week at 80.10, got taken apart Tuesday when the strike got called off, and bottomed at 74.44 Wednesday before crawling back. The week put its volume way down at 75.75 while Friday’s value rebuilt up at 77.54 to 78.44, so the recovery is real and it is standing on thin ground. It trades 78.72 tonight, back inside July’s value.
GC opened the week at 4083.40 and closed Friday at 4403.10 after tagging 4432.40. Value for the week centered at 4301 with a value area running from 4090.30 to 4363.60, which is what a market in full price discovery looks like on a profile. Friday built a tight shelf at 4393.30 to 4416.70 and it opened this week right back on it.
Cross-asset read: Equities and gold ran together all week, which means the market bought the growth story and the debasement story at the same time and did not feel weird about it. Crude was the only one of the four pricing a calmer world. Three charts at or near records and the fourth sitting back inside last month’s value is not a set of prices that all stay right.
Positioning (August 4 data): The trader crowd went into last week’s rip net short on both indexes, and on the Nasdaq they stacked on more shorts while barely touching the long side. Anybody leaning against this tape has been getting carried out. There is still fuel in that if it keeps running.
Vol: VIX closed at 14.90. That is priced for a quiet week, and last week’s range on all four of these says otherwise.
The Calendar
Monday: Bill auctions, nothing else. Light day.
Tuesday: NFIB small business at 5:00 AM CT, existing home sales at 9:00 AM CT, 3-year note auction at 12:00 PM CT.
Wednesday: CPI at 7:30 AM CT. Crude inventories at 9:30 AM CT, 10-year auction at 12:00 PM CT.
Thursday: PPI and jobless claims at 7:30 AM CT, Hammack and Barkin speak midday, 30-year auction at 12:00 PM CT. Applied Materials reports after the close.
Friday: Retail sales at 7:30 AM CT, Michigan sentiment at 9:00 AM CT.
No big tech reports this week. Wednesday 7:30 is the one that reprices everything.
What I’m Watching This Week
1. CPI Wednesday. The whole week is a coin flip until this lands. Every level below is a plan, not a prediction.
2. NQ 30074. Wednesday’s high, untouched for two sessions, and it went in without a taper. Poor highs get revisited before they get respected. July’s 30356.50 is the one behind it.
3. ES 7724.25. The floor of last week’s build. Everything above it is a market that broke out of July and held. Below it is a market that faded a breakout, and those two read very differently on Thursday morning.
4. CL 77.03. July’s value low. The bounce off 74.44 is either a real base or a dead-cat inside a broken market, and this is the line that answers it.
5. Gold’s 4301. Where the week did its business. Price is well above it and price discovery moves fast in both directions. Nothing structural until it gets back there.
The Week’s Plan
ES:
ES spent three sessions building a shelf and closed the week standing on top of it. 7765.75 is where the week did its business and the line the whole plan hangs on. Above it the first stop is 7787 Friday’s high, then 7813 week VAH, then 7820.25 the week high where the auction quit. Clear 7820.25 and there is nothing overhead but price discovery, because July’s whole range is underneath. Below 7765.75 the first catch is 7761 Friday VAL, then 7743.50 Friday’s low. Lose 7724.25 week VAL and the shelf is gone, and the slide runs into 7627.25 July’s high and 7615 July VAH stacked on top of each other. Under those two the real volume is at 7546 July POC, with 7541 the prior week’s high stacked right underneath it.
NQ:
NQ did all its work Monday and Tuesday and has been sitting still ever since. 29750 is the week’s volume and Friday closed above it. Above there 29960.25 week VAH is the first cap, then 30074, the high nobody has been back to since Wednesday. That print has no taper and no excess on it, so treat it as a magnet before you treat it as a wall. Clear it and 30311 July VAH and 30356.50 July’s high are the next two. Below 29750 fails and 29690 Friday VAL catches the first leg, then 29564.25 Friday’s low. Lose 29467 week VAL and there is air underneath down to 29300 July POC, then 28726 the prior week’s high and 28457.75 July VAL where the real volume sits.
CL:
Crude got taken apart Tuesday and has been rebuilding ever since, and it goes into the week standing on 78.12, last week’s value high. Above 78.12 it works to 78.50 Friday’s high, then 80.65 the week high where the breakdown started. Through 80.65 and the real target is 82.18 prior week VAL, then 84.50, where both July and the prior week parked their POC. Below 78.12 fails and 77.54 Friday VAL is the first catch, then 77.03 July’s value low. Lose 77.03 and 75.75 week POC is the magnet, with 74.73 week VAL and 74.44 the week low underneath it.
GC:
Gold is in price discovery and there is nothing above it except the number it prints next. 4363.60 is last week’s value high and the line that keeps this thing vertical. Above it Friday’s 4416.70 value high is the first shelf, then 4432.40, the week’s high and the record. Over 4432.40 there is no structure at all, only whatever the auction decides to build up there. Below 4363.60 fails and 4301 week POC is where the volume actually sits. Under 4301 it gets fast, because the week’s value area ran all the way down to 4090.30 with almost nothing in between, and the first real structure is 4253.20 July’s high, then 4148.70 July VAH.
The White Van Stuff
The book on the S&P is sitting at the top of its one-year range and the Nasdaq is not far behind it, so positioning is stacked heavy enough to pin these things until something big enough shows up to move them. Bonds are carrying almost none of that, down near the bottom of the year. Gold, silver and crude are all sitting mid-range, which means the metals move is running on actual buying instead of positioning.
ES: The cap is way up at 7900 and the interest between here and there is stacked thick, so the path higher is heavy without being blocked. Underneath, the book thins out fast. The next real shelf below price is the magnet at 7605.
NQ: The put floor is 29750, which is exactly where it closed the week, so the whole book is balanced on the line price is standing on. The cap is far away at 31000 and the interest thins out badly above 30250. Below 29750 the next real shelf is 29200.
CL: Crude is parked right on its magnet at 78.50, which is the most honest thing on the chart tonight. The band runs 74.34 to 79.82 and the cap is still up at 85, so the book has not written off a move back up. The floor is 74.
GC: The cap is 4510 and price is already inside reach of it, which tells you how fast this move outran its own book. The floor at 3900 is a leftover from a different price and does nothing this week. The live line underneath is the magnet at 4340.
Let’s work the problem, people.
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