To The Moon

Weekly Outlook Summary

The central view this week is as follows: After weaker U.S. employment data, expectations for further rate hikes eased, temporarily supporting U.S. equities and risk assets.

However, the rebound in oil prices, the renewed repricing of inflation, and rising Treasury yields are weakening the fundamental support for further gains in high-valuation U.S. equities. In the near term, the market may again become range-bound. The strategic focus should therefore shift from outright directional positioning toward capturing a rebound in volatility, collecting option time value, and implementing strict risk controls.

Policy expectations remain the primary market driver. Following the release of the nonfarm payrolls report, market expectations for another Federal Reserve rate hike in September declined significantly, with the prevailing view shifting toward a possible postponement of policy adjustment.

However, elevated oil prices could make it difficult for inflation to continue falling. If rate-hike expectations are subsequently repriced higher, the U.S. dollar, Treasury yields, and risk assets could all undergo sharp adjustments. Revisions to the nonfarm payrolls data also represent a potential volatility amplifier.

The gap in S&P 500 futures is regarded as a short-term dividing line between bullish and bearish market conditions. If the gap holds, the bullish structure remains intact; however, with the index close to historical highs, the remaining upside appears limited. High valuations among AI-related technology stocks, the absence of a meaningful increase in institutional leverage, and the United States’ enormous debt burden and interest costs mean that any rise in Treasury yields could compress equity valuations. In terms of capital rotation, traditional industries, the Dow Jones, and the S&P 500 are showing greater resilience than technology stocks.

Oil prices are a key transmission mechanism linking inflation expectations and equity-market risk. Geopolitical tensions have given oil both catch-up potential and a tendency toward sudden volatility. If the gold-to-copper-to-crude asset-rotation sequence continues, higher oil prices could once again lift inflation expectations and drive the two-year Treasury yield higher, thereby increasing the probability of a pullback in U.S. equities from elevated levels. Accordingly, crude oil is more suitable for intraday or range-bound trading, and the volatility cost associated with holding positions should not be underestimated.

Gold is currently more consistent with a tactical rebound than a trend reversal. The earlier rebound in gold has already partially materialized. However, if spot gold fails to break decisively above the key downward trendline, the risk of a bullish trap remains. From a trading perspective, investors should not establish long-term bullish positions indiscriminately. Instead, they may consider short-term trades, entering in stages, and setting clearly defined stop-loss levels.

In the foreign-exchange market, the bias is toward relative strength in the U.S. dollar. With the dollar approaching long-term support and inflation constraining the scope for rate cuts, either renewed rate-hike expectations or higher Treasury yields could trigger a sharp, short-term appreciation in the dollar. Non-dollar currencies, including the euro and the renminbi, face relative depreciation pressure. However, such trades should be initiated primarily in response to changes in policy expectations.

In a range-bound market, options strategies and risk controls should replace outright directional speculation. For equity indices, investors may consider selling puts on a rolling basis below key support levels to collect time value. When the VIX is at low levels and an index breaks below its trading range, a small long straddle or strangle position may be used to capture a rise in volatility. Regardless of the strategy adopted, stop-loss rules must be established in advance for breaches of the relevant index level, VIX level, or strike price. This is essential to avoid exposure to the seller’s tail risk and event-driven shocks.

Weekly Market Overview

The key development this week was that the indices advanced only modestly, while the rally broadened from technology stocks to energy, utilities, and defensive sectors. At the same time, the 10-year U.S. Treasury yield rose to approximately 4.7%, indicating that the constraint on high-valuation assets remains in place.

U.S. macroeconomic data were broadly weak last week, with both inflation and growth slowing. July CPI increased by approximately 0.1% month over month and 3.4% year over year, while underlying inflationary pressure continued to moderate. PPI was broadly unchanged month over month and came in below expectations. July retail sales declined by approximately 0.6% month over month, marking the largest decline in more than a year. In addition, nonfarm payrolls were revised down by approximately 23,000 jobs, further reinforcing expectations of economic cooling.

Against this backdrop, market pricing for another Federal Reserve rate hike in September contracted rapidly. Hawkish expectations that had emerged since Walsh took office have largely been absorbed.

However, the 10-year Treasury yield remained near 4.70%, close to its high range over the past year. This suggests that the market’s focus has shifted from “whether additional rate hikes will occur” to “whether long-term yields can decline alongside inflation.” This combination of easing expectations for additional short-term rate hikes and elevated long-term yields explains the narrowing gains in U.S. equity indices this week, as well as the rotation of capital toward energy and defensive sectors.

Market: Modest Index Gains, Energy Takes the Lead, Breadth Improves

From August 10 to August 14, 2026, the SPDR S&P 500 ETF Trust (SPY) gained 0.43%, rising from USD 773.26 on August 7 to USD 776.34 on August 14. Of the 11 S&P 500 sectors, nine advanced and two declined. Energy (XLE) rose 7.67%, utilities (XLU) gained 1.58%, and communication services (XLC) increased 1.51%. Consumer discretionary (XLY) declined 1.41%, while materials (XLB) fell 0.62%.

Compared with the previous week, SPY’s gain narrowed significantly from 3.51% to 0.43%, while the number of advancing sectors increased from eight to nine. This indicates a shift from the previous week’s strong, broad-based advance toward a pattern of “slower index gains with continued internal rotation.” Materials, which led performance the previous week with a 4.82% gain, declined 0.62% this week. Energy shifted sharply from a 3.44% decline to a 7.67% gain, while utilities moved from a 1.67% decline to a 1.58% advance. This suggests that capital has not exited risk assets across the board, but has instead been reallocated among technology, cyclical, resource, and defensive assets.

The most notable development last week was the change in leadership. The energy sector clearly led performance with a weekly gain of 7.67%. Utilities, consumer staples, and other relatively defensive segments also strengthened. Technology (XLK) continued to rise, gaining 1.03%, but its performance was significantly weaker than the 7.20% gain recorded the previous week. At the same time, consumer discretionary and materials weakened, reflecting a more cautious market assessment of growth and consumer-related assets.

$纳指100ETF(QQQ)$ $纳斯达克(.IXIC)$ $NQ100指数主连 2609(NQmain)$ $微型NQ100指数主连 2609(MNQmain)$ $标普500(.SPX)$ $标普500ETF(SPY)$ $SP500指数主连 2609(ESmain)$ $微型SP500指数主连 2609(MESmain)$ $道琼斯(.DJI)$ $道琼斯指数主连 2609(YMmain)$ $微型道琼斯指数主连 2609(MYMmain)$

Valuation: Technology Remains Expensive, Broad-Market Valuations Ease From Last Week

According to Worldperatio data, as of August 14, the information technology sector was trading at approximately 34.04 times earnings, remaining at the high end of sector valuations. The sector’s valuation also remained significantly above that of the broader market, indicating that its subsequent performance is highly sensitive to earnings delivery and changes in interest rates. Although the technology sector advanced another 1.03% this week, its gain slowed markedly from 7.20% the previous week, suggesting that the market is becoming more selective toward high-valuation growth assets.

$SPDR能源指数ETF(XLE)$ $高科技指数ETF-SPDR(XLK)$ $材料ETF(XLB)$ $金融ETF(XLF)$ $健康照护类股ETF-SPDR(XLV)$

Based on the cross-sectional valuation structure presented in the previous report, technology, real estate, and industrials continued to trade at relatively high absolute price-to-earnings ratios, while communication services, financials, and energy remained relatively inexpensive.

As the energy sector advanced this week, capital may have rotated toward these lower-valuation sectors. At the same time, technology remained in positive territory, indicating that the market is not simply rotating from growth into value. Rather, it appears to be seeking a combination of earnings visibility, resource pricing power, and relative valuation in a high-interest-rate environment.

As of August 14, the S&P 500’s trailing price-to-earnings ratio was approximately 26.49, down from the 29.88 multiple cited in the previous weekly report, but still above its long-term central tendency of approximately 25 times earnings. Valuation pressure in the broad market has eased somewhat from the previous week. Nevertheless, with the risk-free rate near 4.7%, equities have not yet received meaningful valuation support from the interest-rate side.

Interest-Rate Constraint: Absolute Valuation Premium Remains Negative as Long-Term Yields Approach Highs Again

Compared with the approximately negative 1.34-percentage-point premium calculated in the previous report using a 29.88 price-to-earnings ratio and a 4.69% Treasury yield, the negative premium narrowed this week. The improvement was primarily attributable to the decline in the broad-market price-to-earnings ratio, rather than to a decline in long-term yields.

In fact, the 10-year Treasury yield rose to approximately 4.70% this week, close to its high range over the past year. This indicates that the marginal improvement in equity valuations has not yet been confirmed by the interest-rate market.

A negative value does not mean that equities must decline. It does indicate, however, that the static earnings compensation received by investors is below the risk-free rate. As a result, high valuations are increasingly dependent on earnings growth and falling interest rates. If long-term yields remain elevated or corporate earnings disappoint, valuation volatility could intensify.

Figure 4 | S&P 500 Earnings Yield Minus the 10-Year U.S. Treasury Yield (Monthly）

$20+年以上美国国债ETF-iShares(TLT)$ $美国2年期国债收益率(US2Y.BOND)$ $美国10年期国债收益率(US10Y.BOND)$

Community Views This Week

@程俊_Dream：Is the Broad Asset Rebound Nearing Its End? Focus on the Recent Performance of Key Assets

After the sharp correction and rebound during the previous phase, major asset classes have once again returned to a relatively calm state. However, some assets’ failure to make further progress is not necessarily a positive signal.If they fail to extend their rebound or establish new highs over the coming weeks, this may indicate that a new wave of declines is approaching.

The first asset to monitor is Bitcoin. Bitcoin is currently trading at approximately USD 63,000, less than 10% above its previous low of USD 57,800. If that low is breached, the market could face insufficient support below and a rapid decline. For bulls, Bitcoin would need to rise decisively above USD 67,000 and remain there in order to stabilize and open up additional rebound potential. Accordingly, the key range to monitor is USD 57,800 to USD 67,000, with particular attention to the direction of the breakout.

The second area of focus is the equity market. Compared with the stable and persistent strength of U.S. equities, whether Japan’s Nikkei can establish a new high and whether South Korean equities can return above 8,000 are both important points of focus.

$OSE小日经主连 2609(JMImain)$ $CME日元日经主连 2609(NIYmain)$

The final area is gold, which was a key focus last week. Gold futures declined after producing the ninth daily signal of the cycle, although the decline was limited and the market rebounded quickly. Spot gold, however, still failed to break above the downward trendline in place since the beginning of the year. This divergence in timing between futures and spot markets creates a risk of a short-term bullish trap.

At present, spot gold prices should therefore be the primary reference. A breakout above and sustained move over 4,450 would constitute a signal that the rebound is broadening. Conversely, a break below 4,311 would raise the risk of a retest of the 4,202/4,166 risk and resistance zone.

Macro Strategy Highlights

The previously established long euro futures position was entered at 1.1420. Following the recent commencement of the move, the stop-loss has been raised further to 1.1520. The targets remain unchanged at 1.1770 and 1.2420, with half of the position allocated to each target.$欧元主连 2609(EURmain)$ $欧元指数(EURindex.FOREX)$

For crude oil, the average cost of the existing long position is 75. Although the long position previously staged a strong rebound, it has not yet reached the first target. The short-term view remains range-bound. The existing plan will therefore be maintained for now, with a possible further adjustment to the stop-loss at a later stage. The current stop-loss is set at 60, while the targets are 95 and 115, with half of the position allocated to each.

The gold limit orders for this week will remain in place, subject to the following adjustments：Priority will be given to short opportunities. Place limit sell orders at 4,760 and 5,170, with half of the position allocated to each. The stop-loss is set at 5,275, and the target is 4,000.Place limit buy orders at 4,215 and 4,065. The stop-loss is set at 3,955, and the targets are 4,510 and 4,695.Both sets of limit orders will remain valid until cancelled.

Note: Once a trade reaches its first target, the stop-loss will automatically be adjusted to the entry price. Any subsequent adjustments after execution will be reported in future articles.

@Ivan_Gan: The Stop-Loss Level for a Bullish U.S. Equity Position Is Here

Since the nonfarm payrolls data came in above expectations, the probability of a Federal Reserve rate hike has continued to decline. The market may not form a new expectation until the next nonfarm payrolls report is released. This means that, before the next data release, overall market sentiment may remain optimistic. Even in the absence of a major trend, range-bound trading is more likely.

Because U.S. equity index futures trade for 23 hours a day, many market events are absorbed during the trading session. As a result, equity index futures rarely form price gaps. When a gap does appear, it is typically caused by a significant piece of news or a major event and can subsequently provide a strong basis for support or resistance. The gap formed in S&P futures on August 3 remains unfilled, indicating that market strength is still intact. Investors may use this level—7,500—as a stop-loss reference.

Although the probability of a Federal Reserve rate hike continues to decline, the probability of a rate hike by the Federal Reserve this year remains substantial, at above 50%. If a hike actually occurs, the market will likely revise its expectations for the rate-hike path in the opposite direction, because central-bank policy typically displays continuity. Once a rate-hike cycle begins, it may continue for several quarters.

If the market has overreacted, volatility could increase significantly. A rate hike could also strengthen the U.S. dollar by widening interest-rate differentials, causing the euro and renminbi to depreciate against the dollar. Therefore, establishing medium- to long-term positions that benefit from depreciation in the euro or renminbi against the U.S. dollar may represent a relatively stable profit opportunity in the fourth quarter and is worth monitoring.

Gold

Assessment of the market phase: The strong rebound in gold during July and August, anticipated in July, has already materialized. Gold is currently approximately 100 points below the preset rebound target of 4,600. However, this remains a rebound rather than a trend reversal.

Establishing long-term bullish gold positions is not recommended. For short-term trading, investors may participate by selling put options below 4,000, while monitoring the nonfarm payrolls report scheduled for early September in order to adjust the longer-term assessment.

Crude Oil

Crude oil remains within a broader downward channel, with average daily volatility of approximately 3 to 4 points. It is therefore suitable only for short-term intraday trading. If traded as a medium-term trend position, volatility decay would materially increase the cost of carrying the position.

Macro Strategy Highlights

This week’s market remained optimistic, consistent with the previous week, and there were no significant changes. The rolling index put-selling strategy generated a 1% profit last week, and new positions will continue to be opened on a rolling basis this week. However, the implied volatility of options declined rapidly this week, diluting returns. For the Nasdaq, investors may consider selling puts with strike prices more than 6% below the current price.

Owen: The Anticipated Pullback in U.S. Equities at Elevated Levels May Be Imminent

Crude oil is not only the lifeblood of the global economy but also a direct barometer of inflation expectations. The previous environment—characterized by lower Treasury yields and moderating inflation expectations as a result of broadly cooling macroeconomic data, including unexpectedly softer CPI and PPI readings and a significant downside miss in nonfarm payrolls—could be overturned by a rebound in crude oil virtually overnight.

Market pricing of inflation expectations can generally be understood as moving from gold to copper and then from copper to crude oil. After gold has already experienced a substantial rally, crude oil itself has strong catch-up potential. Crude oil volatility is currently high. On the one hand, oil has strong catch-up potential; on the other hand, its price can fall abruptly at any time because it remains vulnerable to developments in the U.S.-Iran situation.

The increase in inflation expectations is not merely a forecast; it reflects a repricing of capital in the market. The two-year Treasury yield, the most sensitive segment of the Treasury curve, has resumed its upward trend alongside the rebound in crude oil after breaking below a key resistance level. This means that the market is once again repricing the possibility of higher yields in response to the oil-price rebound.

Higher Treasury yields unquestionably place substantial pressure on U.S. equities currently trading at elevated levels. The outstanding stock of U.S. Treasury debt is expected to exceed USD 40 trillion in the near future, while debt-servicing costs remain high. Against this debt backdrop, U.S. debt-servicing costs over the past 12 months—most of which consisted of interest expense—have exceeded USD 1 trillion.

Against this macroeconomic backdrop, as long as the two-year Treasury yield continues to rise, U.S. equities are likely to face pressure to retreat from elevated levels. Accordingly, amid renewed inflation uncertainty and the constraint imposed by higher yields, the risk of a high-level pullback in U.S. equities is increasing. Over the short to medium term, the potential downside clearly appears greater than the potential upside.

Macro Strategy Highlights: Survival Rules for a Range-Bound Market

First approach: an option-selling strategy designed to collect time value.

If the market is likely to remain range-bound at elevated levels, systematically selling low-strike index puts is a relatively prudent choice. The gap created by the upside opening and the 20-day moving average may be used as references for strike selection. Puts may be sold near the neckline below these reference levels, using a rolling seven-day weekly strategy. A price near 685 may be considered.

If the market moves sideways or fluctuates modestly, the option premium can be collected as income. However, strict risk management is essential. If the index breaks below the upside gap or the 20-day moving average, or if the S&P 500 continuous futures contract falls below its 20-day moving average—the key short-term risk-control level—the short option position must be closed decisively and the option-selling strategy suspended.

Second approach: an option straddle strategy designed to capture a gamma squeeze.

The VIX has remained below 15, an extremely low level, for an extended period. Based on seasonality and historical patterns, after the VIX reaches a six-month low, it may remain stable for the first several weeks. However, one to two months before the midterm elections, it may often experience a sharp surge.

When the S&P 500 faces the risk of breaking below its trading range—for example, when the S&P 500 continuous futures contract breaks below the lower boundary of the range—a small straddle or strangle position may be considered. Purchase puts and calls with the same expiration date, generally more than 14 days away, and with the same or approximately at-the-money strike price. If the index experiences a meaningful decline that triggers fear, the strategy is intended to benefit from a short-term gamma squeeze that drives a sharp increase in the value of the put leg, thereby producing an overall profit.

However, this strategy must be accompanied by extremely strict stop-loss discipline:

• Monitor the VIX resistance level closely: If, after entering the straddle, the VIX fails to establish itself decisively above a key support level such as 14.8, or falls below that resistance/support level, it indicates that volatility has failed to rise. The position should then be stopped out immediately; investors should not remain in the trade.

• Guard against event risk: If unexpected remarks reverse expectations for rate hikes, or if Trump once again makes a “TACO”-level provocative statement regarding the U.S.-Iran situation and forcibly reverses the decline in equity indices, the straddle position should also be closed immediately.

Third approach: continue rolling low-strike short put positions in gold.

Using GLD as an example, investors may consider selling puts expiring in approximately six days, with strike prices below the 20-day moving average. Strike prices near 382 and 381 may be used as references. If GLD falls below the strike price, the position should be stopped out immediately.

Follow-Up on Last Week’s Weekly Report Strategies

Strategy Follow-Up: @程俊_Dream

The previously established long euro futures position was entered at 1.1420. Following the move last week, the stop-loss has now been raised to 1.1420, placing the position at breakeven. The targets remain unchanged at 1.1770 and 1.2420, with half of the position allocated to each target.

For crude oil, the average entry price of the existing long position remains 75. Although the long position previously staged a strong rebound, it did not reach the first target. The short-term view remains range-bound. The previous plan will therefore be maintained for now, with a possible increase in the stop-loss level at a later stage. The current stop-loss is set at 60, while the targets are 95 and 115, with half of the position allocated to each.

For gold, we also initiated several trades this week:Place a limit buy order at 4,085, with a stop-loss at 3,955 and a target at 4,475.Place limit sell orders at 4,760 and 5,170, with half of the position allocated to each, a stop-loss at 5,275, and a target at 4,000.Both limit orders remain valid until cancelled.

Result: The long euro and long crude oil positions remain profitable. The limit order to buy gold was not triggered.

Strategy Follow-Up:@顾明喆

Macro strategy highlight:

Gold trading strategy: Consider buying a call option expiring on August 19 with a strike price of 4,350, while simultaneously selling a call option with the same expiration date and a strike price of 4,500. The approximate risk-reward ratio is 3.27.

Result: The position is temporarily showing a loss, but the maximum risk remains controllable.

Strategy Follow-Up: @Owen_trading room

Strategy 1: Gold futures and options strategy

For gold, trading strategies may be considered from both the futures and options perspectives. In the futures market, the 20-week moving average of the gold continuous futures price, approximately 4,413, may be used as the reference level for establishing a bullish position. A break below this level would trigger a stop-loss, while the target is approximately 4,600. In the short term, attention should also be paid to the resistance posed by the 200-day moving average of the gold continuous futures contract. A sustained breakout above this level would provide a stronger basis for following the bullish trend.

Strategy 2: Using a straddle to capture a rebound in the VIX

Based on the average historical pattern over the past 20 years, the VIX is currently at a relatively low level, while its seasonal pattern is gradually improving. In a range-bound market that could experience a large move at any time, using an option straddle or strangle to capture a rise in the VIX may offer an attractive risk-reward opportunity.

For example, investors could purchase an at-the-money call and put on QQQ or SPY, with the same strike price and expiration date, both expiring two weeks later. If a large market movement occurs and the VIX rises sharply, the straddle or strangle combination would likely become profitable.

The advantage of this strategy is that overall risk exposure remains controllable and directionally neutral; it does not require investors to predict whether the market will rise or fall. The stop-loss condition is also clear: if the VIX falls below a key resistance level, demonstrating that volatility is failing to rise, the position should be closed immediately to limit losses.

Strategy 3: Rolling sales of low-strike index puts

In a market that is bullish but range-bound, or broadly range-bound at elevated levels, selling out-of-the-money puts is an effective way to capture time value. Investors may select U.S. equity indices such as the Nasdaq or S&P 500 and sell weekly puts with strike prices approximately 7% below the current index level.

If the index moves sideways or rises modestly, the premium can be retained as income. If the index undergoes a gradual correction, the position still has a relatively wide buffer. The stop-loss rule is to close the position immediately if the index falls below the strike price.

Result: The long gold futures position is temporarily profitable. The option straddle strategy was stopped out at its designated stop-loss level. The deeply out-of-the-money index puts sold under Strategy 3 have generated a profit, with the full option premium collected.

Strategy Follow-Up: @Ivan_Gan

Strategy 1: Sell periodic puts on gold below 4,000. If gold falls below the strike price, exit the position at a stop-loss.

Strategy 2: The gap at 7,500 in S&P 500 futures from last week is an important level to monitor. Unless the index breaks below this level, a bearish view is not warranted. Investors may use futures positions equivalent to 10% of the portfolio to track the index or index-related ETFs. With respect to options, the rolling index put-selling strategy remains valid. This week, Nasdaq puts with strike prices approximately 7% below the current index level may be sold. If the index falls below the strike price, exit at a stop-loss.

Result: Both strategies were profitable, and the full option premium was collected.