The first week of August is formally here. In terms of how the calendar falls, the opening week of a month tends to have an outsized effect on volatility in US trading, chiefly because the US non-farm payrolls report — the release markets watch most closely — lands early in the month. In a market as rate-sensitive as the current one, payrolls feed straight into rate expectations and therefore into a wider trading range. On top of that, the weekend's US–Iran flare-up has left the progress of the “so-called” 60-day negotiation window genuinely hard to read, and that is another source of instability in the market right now. A market like this, however, is actually easier to profit from — provided you approach it with a relatively short-term mindset.
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US Equity Indices: Rebound or Reversal? And Can It Last?
Last week the US halted its strikes on Iran, and the market used that as grounds for a sharp rebound. This pattern — where any meaningful drop in US equities is met by Trump coming out and doing the TACO — makes it genuinely difficult to find trend-following opportunities in the US index space. Technically, last week's bounce still left the Nasdaq below its 20-day moving average, so it cannot be classified as a trend reversal; anyone looking to go long can wait for a breakout before stepping in. Should the payrolls headcount come in above expectations, it would likely raise the odds of a September hike considerably, and US equity indices may well not react kindly. Better, then, to trade off the technical indicators — it makes risk-control standards far easier to set. If hike odds do rise, the impact on the Nasdaq would be the larger one (higher corporate funding rates, higher buyback costs), but the effect on traditional-sector indices need not be a negative at all (a still-improving economy, with a recovery in the old economy priced in). So for those constructive on US indices, it may be worth widening the field of view to the S&P, the Dow and the Russell — diversifying may well ride smoother.
Crude Without Direction, Gold Without a Surge
The 60-day negotiating period, in theory, expires at the end of August. Oil's swings through August will turn entirely on headlines from outside the room; we have no way of knowing what is genuinely happening inside the talks, so any current call on crude carries no real certainty. Tracking it short-term is the easier way to make money — buy the strength on good news, sell the break on bad news, and keep the stop tight. Gold, meanwhile, remains relatively weak under the weight of rate-hike expectations, but the 20-month support is still intact and the basis for a rebound has not disappeared; it has simply been a good deal slower in coming than we had anticipated. From August, the support price on that 20-month moving average moves up to around 3,900. We expect payrolls to give gold a short-term direction, and the thing to do is wait. On near-term technicals, gold is still sitting alongside its 5-week and 20-day moving averages, and we would not advise being excessively bearish: even if a headline drives it briefly below 4,000, a V-shaped rebound on a modest piece of good news is readily available around 3,900. If it does print a new low, one strategy worth considering is buying call options to play that V-shaped bounce — upside to attack with, and a capped loss on the way out.
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