One storyline ran the board this week, sending the indices and commodities in opposite directions. Another “possible draft to begin negotiations on maybe a peace deal that one side or the other could be completely making up” (yes, the abiguity is only a half joke) to reopen the Strait and pull the sanctions off Iran knocked the war premium straight out of crude, which closed the week on its lows, and gold kept bleeding the safe-haven bid it leaned on all spring. Equities took the other side of the same tape and firmed up, soft core inflation Wednesday handed the buyers the rest of the excuse, and NQ closed right back at the highs. FOMC WEEK so mark your levels and let the man talk. Father’s Day week and the Fed has a new Daddy. Also the USMNT may have something in the World Cup.
The Week That Was
ES spent the week clawing back the prior week’s losses, dipped to 7247 early, then built its value back up at 7415 and closed at 7433. The week POC stacks right on the 7420 May POC, which is the shelf the dip-buyers chose to defend. First close back in striking distance of the value it lost, but the bounce stalled the second it hit the old floor.
NQ was the V. It dipped to 28227 early, then climbed back through all of the prior week’s damage and closed 29677, above the 29476 week VAH and a stone’s throw from the 29848 week high. It is the strongest of the four, the one the buyers chased hardest. The short crowd that pressed the lows got run over the whole way up.
CL was the holdout that finally cracked. It ran the early week near 92, then unwound the entire back half on the agreement headline and closed 84.30, sitting on the 84.13 week low with the whole week’s volume stranded up at 91.30. The war premium that held it up for three months is coming out a barrel at a time.
GC flushed to a fresh low at 4072 then clawed back to close 4231, holding above the 4175 week POC. The freefall paused, but the metal is still under every bit of May’s value and trading straight inverse to the ten-year. It is a rates bet now, nothing more, and it is waiting on Wednesday like everyone else.
Cross-asset read: One story did all of it, and it pointed the opposite way from last week. Soft inflation and a draft to bring the barrels back flipped the same dominoes in reverse, stocks ripped and the safe-haven bid kept bleeding out of gold because rising rates are the one thing it cannot fight. Crude got monetized as the supply-is-coming-back trade while the indices got bought as the war-risk-is-leaving trade. The equities recovered on rates, the metal sold on rates, and the only one in true free-fall is the contract with a signature pointed at its throat.
Positioning (data through midweek): Read the latest print as the book going into the bounce, not after it. The trader crowd fought the entire melt-up from the short side and was still leaning that way into the flush, and this V is exactly what a stranded short book does when it has to cover into strength. The fuel that drove the rip is mostly spent now, but a book that is still short is two-sided ammunition into Wednesday either way.
Vol: The fear gauge is back near the lows. The downside protection that paid on the way down got sold into the recovery, so it is cheap again right at the highs going into a new chair’s first meeting. Crude vol never came down and gold vol is set to expand the move, not dampen it. A market positioned for calm right into the one event that can break it is the part that bites. Size for a two-sided Wednesday.
The Calendar
What I’m Watching This Week
1. FOMC Wednesday 1:00 PM CT. A brand new chair’s first meeting and the override on every chart. No move is the base case, so the projections and the press conference are the whole event. Mark your levels cold and do not try to predict the man.
2. NQ round-tripped the flush. It closed back above the 29476 week VAH and never looked back. While it holds that line the path points at the 29848 week high and the broken value overhead. Lose 29240 and the V starts to look like a lower high instead.
3. ES stalled at value. The bounce ran straight into the 7415 week POC stacked on the May POC and stopped cold. Above 7470 the recovery has room toward the broken 7524 value. Under 7385 the week gets heavy in a hurry.
4. Crude is in free-fall on the agreement. It closed on the 84.13 week low with the whole week’s volume stranded overhead and nothing recent underneath. A signed deal gaps it lower on the open. The only thing that reverses it fast is the talks falling apart.
5. Gold is a pure rates bet. It bounced off the 4072 flush low but everything from May is overhead supply. Wednesday moves it as hard as it moves the indices. 4175 holds the bounce, 4284 gets it back into the broken range.
The Week’s Plan
ES:
ES dug out of the hole all week and ran the bounce straight into the 7415 week POC, where the May POC sits on the same tick, and stalled. Reclaim 7443 Friday VAH and 7470 week VAH and the recovery has room to the 7491 week high, then the broken 7524 prior week value, with the 7624 prior week POC the wall where the whole melt-up’s volume now sits as supply. Lose 7385 June VAL and the week turns heavy again, with 7366 the Friday low and 7338 May VAL the first real shelf under it. Below 7338 the air opens to 7326 week VAL, then 7247 week low, and 7199 May low is where the month actually built its volume.
NQ:
NQ acted like nothing happened. It reclaimed the 29476 week VAH on the way back up and closed leaning on the 29760 Friday high. Hold 29476 and the 29848 week high is the gate, and taking it opens the 29948 prior week VAL and the long climb back to the 30590 prior week POC, the floor that broke and is a ceiling now. Lose 29240 May POC and the bounce loses its footing, with 28974 the prior week low, then 28600 week POC where this week built its base. Below 28600 the 28465 week VAL and 28337 May VAL stack close, and losing them reopens the vacuum to the 27614 May low. There is almost nothing between the week base and the May value.
CL:
Crude closed the week dead on the 84.13 low with the entire week’s volume stranded up at the 91.30 POC, which means price fell clean out of its own value and never looked back. The reclaim that matters first is 86.35, the May low that held all last month and is overhead resistance now, then 87.38 week VAL gets it back into the week’s range. Above that the 90.86 prior week VAL and the 91.30 week POC are the distant overhead and the bounce is pure headline. Lose 84.13 and there is no recent volume to lean on, it is price discovery down to the spring’s old value at 82.58 April VAL, and below there the 77.21 April low is the only structure left.
GC:
Gold bounced off the 4072 flush low and is hanging just above the 4175 week POC, the line that defines whether the bounce has legs. Reclaim 4256 Friday high and 4284 week VAH and the next step is 4338, the prior week low that is resistance now, then 4439 prior week VAL into the 4500 prior week POC and 4532 May POC, where the long crowd keeps trimming every rally. Lose 4175 and the 4073 week low and flush low come right back, and below there it is fresh price discovery with no volume to catch it.
The White Van Stuff
The book flipped back this week. The crowd that loaded downside protection on the selloff dumped it into the rally, so the pin is back on stocks and the amplifier got switched off on the indices. It stayed on for crude, where the book is still loaded for downside and every leg lower greases the next.
ES is back inside the long-side pin it gave back on the flush, with the book leaning slightly to the call side and protection cheap again. The cap is up at 7550, the magnet sits below at 7360, and price is parked in the dense heavy-interest shelf between them. That is a setup that wants to grind sideways, right up until Wednesday’s print blows the pin apart.
NQ already cleared the structural call line it lost on the flush, so the overhead that matters now is the old value shelf up at 30200 to 30500 and the expected high near 30112. The magnet still sits way down at 28950, which tells you how far value ran from price on the V. It is the most call-heavy book of the four, and that is its own kind of risk into a hawkish surprise.
Crude is still trading with the amplifier on, the book loaded for downside and the vol fattest on the board. It lost the 85 floor and there is nothing but heavy-interest air down to the 82 expected low. The 91 magnet is a different zip code now, which is exactly what a contract in free-fall looks like on the book. Do not trust a single poke through either edge with vol this fat.
Gold is pinned under a stack of heavy interest from 4250 up to 4300, with the magnet at 4345 capping every bounce. The book is still tilted to the put side and the long crowd keeps feeding rallies into that 4345 line. The floor is a long way down at 4000, so the whole fight is in this tight band at the lows.
The protection is cheap again, the book is long again, and the calendar has a brand new chair running his first meeting on Wednesday. There is a line from Rounders that fits the week. If you can’t spot the sucker in your first half hour at the table, then you are the sucker. Mark your levels and know which side of the table you SHOULD be sitting on. Personally? My vibes going into this week are as follows:
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