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Market Review

Who Is Paying the Price for an Agreement That Hasn’t Even Been Reached?

The U.S. is currently facing three challenges simultaneously: First, the conflict with Iran has driven oil prices up 46% so far this year, yet virtually no ships can pass through the Strait of Hormuz normally. Second, there is no consensus within the Federal Reserve on whether inflation is transitory, and opinions vary widely on how many times and when interest rates should be cut; third, the Federal Reserve Chair is set to be replaced on May 15, but the appointment process for the new chair has stalled.

(1) The IRGC’s power grab was last week’s most underestimated tail risk; the initiative in negotiations has shifted

Over the past two days, Ahmad Vahidi, commander of the Islamic Revolutionary Guard Corps (IRGC), has wrested control of Iran’s negotiating stance from the diplomats.

- IRGC speedboats have fired upon oil tankers, and Iran’s Deputy Foreign Minister has stated that a date for the next round of negotiations has not yet been set.

- This suggests that the market’s optimism this week regarding the imminent success of the negotiations may be built on sand.

- Commentary: If the IRGC continues to dominate and pragmatic negotiators are sidelined, the narrative of a temporary energy shock will be forced to shift. WTI oil prices could rebound far beyond current levels, and the Fed’s rate cut path would be delayed.

(2) Trump’s words should not be taken at face value; he has a systematic habit of exaggerating his achievements, and the market should not treat his statements as reliable signals

- During the May 2025 U.S.-UK trade negotiations, Trump called it a “historic victory,” but in reality, British cars continued to enjoy low tariffs, and the digital services tax remained unchanged. By December 2025, The New York Times reported that the agreement’s implementation had encountered major difficulties. This time, he claimed Iran had agreed to hand over enriched uranium, but Iran immediately denied it.

- Commentary: Trump’s statements cannot serve as a reliable basis for assessing the progress of negotiations. If the market continues to use Trump’s statements as a pricing anchor, it will continue to bear the volatility premium resulting from information revisions.

(3) There is significant disagreement within the Federal Reserve regarding whether inflation is temporary

- Federal Reserve Governor Miran stated that rising energy prices are merely temporary and that there could still be three rate cuts this year; However, Chicago Fed President Goolsbee described this as a “stagflationary shock” (a simultaneous occurrence of economic deterioration and rising prices), suggesting rate cuts might be pushed back to 2027; Board Member Waller noted that when one temporary shock follows another, inflation ceases to be temporary.

- Commentary: With three voting officials offering conflicting views, market expectations regarding the timing of rate cuts will become even more volatile.

(4) The appointment of the next Fed Chair is stalled, and a leadership vacuum may emerge after May 15

- Trump nominated Kevin Warsh to succeed current Chair Powell, whose term expires on May 15.

- However, some investments in Warsh’s financial disclosure documents were not fully disclosed due to confidentiality agreements, prompting 11 Democratic senators to request a postponement of the April 21 confirmation hearing;

- More critically, Republican Senator Thom Tillis has stated that he will not vote in favor of Warsh unless the Department of Justice halts its investigation into Powell.

- With the Banking Committee composed of 13 Republicans and 11 Democrats, Tillis’s single vote could block Warsh’s confirmation.

- Commentary: A leadership vacuum at the Fed will significantly increase the premium for policy uncertainty, placing additional pressure on long-term U.S. Treasuries

(5) The U.S. job market appears robust on the surface, but Waller says it is already walking a tightrope

- ADP data shows 39,000 new jobs were added this week, with 207,000 initial jobless claims — which looks decent.

- However, Waller pointed out that due to reduced immigration and an aging population, growth in the U.S. labor supply is virtually zero, meaning only a small number of new jobs are needed to keep the unemployment rate stable.

- Commentary: This implies that at the first sign of trouble (such as layoffs driven by rising energy costs), the unemployment rate could spike rapidly, with far less of a buffer than in the past.

(6) March price data looks good, but April and May will be the real test

- In March, core Producer Price Index (PPI) rose only 0.1%, and import prices rose just 0.8% (market expectations were 2%), The data looks good. However, these figures reflect costs prior to the sharp rise in energy prices.

- The Fed’s Beige Book has already indicated that oil-related costs — such as freight, plastics, and fertilizers — are rising, squeezing corporate profits.

- Commentary: The positive aspect of the March PPI data reflects the cost structure before the energy shock; the data for April and May will truly reflect the impact of the energy shock.

(7) Stock markets have surged, but the actual situation is not as optimistic

This week, the S&P 500 rose 4.54% and the Nasdaq rose 6.84%, a very strong performance. Oil prices fell 13.17%.

- However, at the same time, virtually no ships are able to pass through the Strait of Hormuz normally; approximately 20 merchant ships turned back after being intercepted or fired upon by Iranian speedboats.

- The decline is driven by expectations of successful negotiations, not an actual resumption of oil supplies

- Commentary: Oil prices have fallen because the market believes negotiations will succeed, but in reality, the Strait remains blocked. If negotiations fail to take place as scheduled in Islamabad this week (starting April 20), risk assets will face significant downward pressure

(8) Long-term U.S. Treasury yields are unlikely to fall sharply

- The yield on 10-year U.S. Treasuries fell by only 0.05 percentage points to 4.26%, a relatively small decline.

- The measure of the additional risk premium demanded by investors (term premium) remains at a high level (0.70% according to the ACM model, 1.18% according to the CR model).

- Commentary: Uncertainty surrounding Warsh’s appointment, fiscal deficit pressures, and internal divisions within the Federal Reserve — these three factors are all supporting this elevated risk premium, making it difficult for long-term Treasury prices to rise significantly.

Market Scenarios

$166 billion Tariff Refunds Disbursed, Warsh Speaks, Tesla Reports

April 20 | U.S. Tariff Refunds Commence

U.S. Customs has launched the $166 billion tariff refund program, with the first batch of funds flowing to large retail and manufacturing companies. If refunds are disbursed smoothly, they will improve liquidity and boost market sentiment; if delayed or stalled, they will dampen market sentiment.

- Market Base Case: Refunds are disbursed smoothly as planned.

Better-than-expected (extremely fast refund process, funds disbursed): Rapid tariff refunds will significantly improve corporate cash flow, driving increased investment and operating expenditures, which in turn will boost earnings expectations and stock market performance. At the same time, increased liquidity may intensify inflation expectations and push up U.S. Treasury yields.
Below expectations (system glitches, delayed refunds): If the refund process is delayed due to technical or policy reasons, the market will reassess the timeline for liquidity improvement, potentially leading to short-term stock market consolidation and reduced volatility in the bond market.

April 21 | Wosh Hearing & Expiration of U.S.-Iran Ceasefire

Federal Reserve Chair nominee Kevin Wosh is scheduled to appear at a Senate Banking Committee hearing. The market is focusing on his stance on monetary policy, but Democrats have called for a postponement, and it remains uncertain whether the hearing will proceed as scheduled. Meanwhile, the U.S.-Iran ceasefire agreement is set to expire; failure to renew it could lead to an escalation of tensions in the Middle East.

- Market Expectations: The hearing may be postponed. Warsh is likely to maintain a dovish stance without signaling clear intentions for rate hikes or cuts; if postponed, the probability of a leadership vacuum at the Fed would rise significantly. The U.S.-Iran ceasefire is expected to be extended (50% probability of an extension, 40% probability of using military pressure to facilitate negotiations).

More hawkish stance / Agreement Collapse: A hawkish stance would reinforce market expectations of further rate hikes, pushing up short- and long-term U.S. Treasury yields and weighing on risk asset valuations. A collapse of the ceasefire agreement would drive up oil prices, intensify inflation expectations, and further heighten market concerns.
Dovish Stance/Agreement Extension: A dovish stance would alleviate market concerns about rate hikes, driving up risk assets and lowering bond yields. An extension of the ceasefire agreement would reduce upward pressure on oil prices and ease inflation expectations.

April 22 | Tesla Earnings & Google I/O

Tesla releases its Q1 earnings report, with market focus on profit margins and delivery volumes; Google I/O may announce new OCS (Open Compute Services) technology, impacting sentiment toward AI and tech stocks.

Market Expectations: Tesla’s profit margins bottom out and rebound; Google’s OCS technology delivers impressive results.
Earnings Miss / Lackluster Tech: If Tesla’s profit margins fall short of expectations, it will dampen market sentiment — particularly confidence in high-valuation tech stocks — and U.S. stocks will come under pressure; if Google’s tech fails to meet expectations, it will weaken market optimism regarding the AI sector.
Profit Margin Rebound / OCS Commercialization: A rebound in Tesla’s profit margins will boost market confidence in the profitability of tech stocks, driving U.S. stocks higher; The unveiling of Google’s new technology will reshape the AI computing power market, benefiting related companies.

April 24 | Japan’s March CPI Release

Statistics Japan will release March CPI data, with the market expecting CPI to rebound to a level close to 2.8%. If the data exceeds expectations, it may trigger expectations of a policy adjustment by the Bank of Japan, which could in turn affect global capital flows.

Market Expectation: CPI rebounds to approximately 2.8%.
Above expectations (>2.8%): A higher-than-expected CPI reading will fuel expectations of an early rate hike by the Bank of Japan, leading to unwinding of yen carry trades, tightening global liquidity, and pressure on risk assets.
Below expectations (continued weakness): A lower-than-expected CPI reading will dampen expectations of a Bank of Japan rate hike, allowing yen carry trades to remain intact, easing global liquidity pressures, and providing support for risk assets.

U.S. Stocks

This Week’s Market Outlook:

1️⃣ S&P 500 Futures: High-Risk Zone — Surface Strength, Internal Triple Breakdown

Core Trading Zones:

- 7200–7250: The options market has erected a barrier at 7200, with a large volume of sell orders waiting here. There is no buying interest above this level; a breakout would find no buyers, making a false breakout highly likely. Do not chase the rally here; if you hold long positions, reduce your exposure.

- 6,900–7,200: Prices are currently fluctuating within this range. Bears are struggling, and bulls are reducing positions; both sides are wearing each other down with no clear direction. Trading here is a surefire way to lose money; wait for signals and keep your hands off the market.

- 6,600–6,800: This is where most traders’ actual buy costs lie, and it’s the final line of defense for moving average support. As long as prices hold here, the bullish logic remains valid; once it breaks, the market has completely shifted — regardless of what long positions you hold, liquidate immediately.

2️⃣ Nasdaq 100 Futures: More dangerous than ES — its strength is more extreme, its internal structure is more hollow, and its funding sources are more artificial.

Core Trading Zones:

- 27,000–27,500: The current price of 26,825 has entered the tail end of a vacuum zone, with no support from open interest above. This is a pressure zone for market makers’ hedging (option data pending to confirm the precise upper boundary). Do not chase longs if it surges here; reduce long positions if held.

- 25,500–27,000: The upper boundary of the value zone (25,500 to current price) is a high-frequency battleground between short squeezes and institutional position reductions. Any minor fluctuation in major stock prices will trigger violent volatility here. Keep your hands off and wait for a clear direction.

- 24,000–25,500: The most densely traded value zone (POC 24,300–24,400) + weekly MA20 support (25,400) + offset price anchor zone. As long as prices hold here, the bullish logic remains intact; once 24,000 is breached, the cost zone for institutions’ 1 million lots of long positions will be completely breached, triggering a stampede-style sell-off — liquidate immediately.

Market Analysis

(1) Prices are rising, but no one is really buying

All three major indices have hit new highs, with moving averages trending perfectly upward, yet trading volume is 17% below average. The 20-day breadth of SPY, QQQ, and IWM has surged to around 80%, entering an extreme overbought zone. This indicates that the vast majority of stocks in the market have been indiscriminately driven higher over the past three weeks, and short-term liquidity has been fully exhausted. The reality behind this rally is that short sellers could not withstand the pressure and were forced to liquidate their positions; the price was not driven up by new money or genuine capital inflows.

(2) The Nasdaq has surged the most, but is the most hollow internally

QQQ looks red-hot in the short term, with 80% of stocks rising. But looking at the longer term, half of the Nasdaq 100’s stocks are still lying below their moving averages, completely stagnant. To put it bluntly, this rally is being propped up by giants like NVIDIA, Microsoft, and Apple, while the other half of the components haven’t participated at all. Once these giants start selling, the entire Nasdaq will collapse like a house with its pillars pulled out.

(3) Even small-cap stocks are surging wildly, indicating the market is nearing its peak

IWM (small-cap stocks) has the most balanced breadth data and appears the healthiest among the three major indices. But this is precisely the most dangerous signal. Historical patterns tell us: when even small-cap stocks with the weakest fundamentals are being universally driven up, it means market funds can no longer find better targets and are reduced to picking up cigarette butts off the ground — this is the final stage of a liquidity frenzy, not the beginning of a new bull market.

Sentiment

The overall index is 28% away from triggering a crash alert, but this sense of safety is an illusion masked by averaging; the underlying structure has already fractured. The current high levels of the index are entirely driven by existing leveraged capital within the market playing with itself. Real capital from outside the market is not flowing in, retail investors are not stepping in to catch the falling knife, and speculators have become the only buyers in the market.
Call-to-put ratio ~25%. Sentiment in the options market is subdued; retail investors are afraid to chase rallies, and buying interest in call options is shrinking.
Retail investor sentiment (bullish/bearish) ~12% (<20% indicates extreme panic zone). Retail investors are extremely risk-averse and refuse to enter the market to catch the falling knife.
Correlation between constituent stocks ~45% (neutral range). There is no systemic resonance of stocks rising or falling in unison; risks have not yet concentrated to trigger a collapse.
Composite capital flow ~5% (<20% indicates extreme depletion zone). This is the most critical signal! Real external capital has virtually dried up, and the market has lost its lifeblood.
Net Speculative Positions ~90% (≥90% Extreme Crowding Zone). Leveraged positions are maxed out; bulls have no more ammunition to add.
Market State Index ~55% (Neutral Zone). In a chaotic transition phase at the tail end of a trend; direction remains unclear.

Market Sentiment

S&P 500 Futures: The short squeeze hasn’t ended yet, but the ceiling is only 39 points away; 1 million institutional long contracts can’t find buyers.

1️⃣ Moving Averages and Support Levels: The technical picture is flawless, but prices have soared over 600 points from the bottom — with a vacuum above and a cliff below.

- Both daily and weekly charts show a perfect upward formation: “Price > Short-term MA > Medium-term MA > Long-term MA,” with no moving averages dragging the market down

- Current prices are far above all moving averages; the moving averages will continue to curve upward and will not become resistance in the short term

- The actual buy costs for the majority of market participants are concentrated in the 6,350–6,800 range. The current price of 7,161 has soared directly above this cluster of buy costs, with virtually no trapped positions weighing on the upside.

- Both daily and weekly trading volumes have broken above their moving average volume lines, indicating that capital continues to push prices upward with intense momentum in this resistance-free zone.

2️⃣ Options Momentum : The ceiling is right overhead, with only 39 points remaining

The current price is 7,161, just 39 points away from the ceiling. Continuing to go long at this level is like jumping up in an elevator that’s almost at the top — there’s not much room left.

3️⃣ CFTC Analysis : Big fish are crushing small fish, but the big fish are trapped themselves

There are currently two groups clashing in the market:

Large Institutions (Big Fish): They’ve bought 1 million long contracts and added another 62,000 last week. The more it rises, the more they buy, piling positions to historic highs.
Speculators (Small Fish): They’re doing the exact opposite by shorting the market, opening 150,000 new short contracts in one go last week to bet on a decline.
Total Open Interest: Increased by 30,000 contracts in a single week. Both bulls and bears are adding to their positions; this is a genuine battle, not a rally driven by short-sellers covering their positions.

The result is that the big fish is pinning the small fish to the ground and grinding it into the dirt, forcing prices higher. As long as the small fish’s short positions haven’t been liquidated, the big fish will keep pushing.

But there’s a fatal flaw here: Who will the big institutions ultimately sell their 1 million long contracts to?

New capital from outside the market has virtually dried up (only 5%), and retail investors dare not enter. Major institutions are sitting on a massive pile of positions at high levels but can’t find anyone to take them off their hands.

Nasdaq 100 Futures

A few tech giants are propping up the entire Nasdaq with colossal amounts of capital, but with no new money coming in from outside and half the stocks stagnating internally — the higher this sandcastle is built, the faster it will collapse.

1️⃣ Moving Averages and Break-Even Points : Rising even more aggressively than the S&P, but even more hollow

Daily and weekly charts show perfect upward trends; prices have left all moving averages far behind with no resistance
The current price of 26,825 is far above all cost anchor points; moving averages will continue to curve upward, providing support rather than drag in the short term
The vast majority of investors’ buy costs are concentrated between 23,800 and 25,500. The current price has soared into a 1,300-point vacuum zone above this cost cluster — there are no trapped positions above, but it’s a sheer cliff below
Both daily and weekly trading volumes have surged dramatically, indicating that someone is pumping massive amounts of capital into the market regardless of cost. A volume-driven rally sounds healthy, but when combined with previous breadth data — half of the stocks in the Nasdaq 100 are still lying dormant below their moving averages — it becomes clear that this massive capital is being poured exclusively into super-giants like NVIDIA, Microsoft, and Apple.

2️⃣ CFTC Analysis : The same script as the S&P 500, but even more extreme

Large Institutions: Net long positions of 77,000 contracts, with an additional 18,000 contracts added in a single week — firmly bullish. They’ve sold off other stocks to concentrate their bets on the few heavyweight giants in the Nasdaq. This is a form of “robbing Peter to pay Paul” internal short squeeze — no new external capital is flowing in; existing funds are simply being piled higher and higher into a concentrated few.
Speculators: Net short positions of 58,000 contracts; even as the Nasdaq climbed to 26,800, they continued to increase short positions against the trend, stubbornly holding their ground.
Total Open Interest: Surged to 276,000 contracts, with a weekly increase of nearly 18,000 contracts. Both bulls and bears are ramping up their positions — it’s a full-scale, no-holds-barred battle.

The outcome mirrors that of the S&P: the big fish eat the small fish, and speculators’ short positions have become the fuel driving the rally.

U.S. Treasuries

This Week’s Price Projection:

2-Year U.S. Treasuries: Moving averages continue to provide short-term support, but without fresh buying momentum, a pullback after high-level consolidation is highly likely.

The candlestick chart is the only bullish indicator; all five other metrics with available data are flashing red — yield curve structure under pressure, weakening auction demand, fully priced-in rate cut expectations, and smart money exiting. Overall bias is bearish.

(1) The candlestick looks bullish, but the drivers behind the rally are quietly exiting

Prices hit new highs, but speculators reduced their positions by 103,000 contracts. This bullish candle may look green on the surface, but it’s filled with exit orders.

(2) No buyers in the primary market, yet prices are rising in the secondary market

Auctions are lackluster, and buyers are forced to step in, yet bond prices are rising. This is because short sellers are covering their positions, not because genuine bullish investors are entering the market. Once short sellers have fully covered their positions, this rally will end.

Core battle zones:

100'20'0 and above: The ceiling where trapped positions and short sellers congregate; any attempt to break through will be met with selling pressure.
99'55'0–100'20'0: The current consolidation zone, where bulls and bears are locked in the fiercest battle.
99'20'0–99'55'0: The final line of defense for moving averages; a break below this level would spell the end of the bull narrative.

10-Year U.S. Treasury: Weekly chart resistance + negative option skew + sustained short-side accumulation

(1) Candlestick resistance, yield spread under pressure, dismal auction results, dangerous option dynamics, no end in sight for rate cuts, and sustained short-side accumulation. These are overwhelmingly bearish signals; there is no dimension supporting the bulls.

(2) 111.0 is this week’s most critical make-or-break level; a break below it will trigger gamma acceleration with no room for recovery.

Core Battle Zone Breakdown:

99.990–101.160: The trapped capital zone between the two major weekly moving averages. A large amount of trapped capital is waiting to unload here; any rally will be met with selling pressure.
Around 111.0: The most densely concentrated life-or-death line for options positions. A break below this level will force market makers to automatically sell, triggering a death spiral.
98.04.0: The final line of defense on the daily chart. A break below this level will eliminate even the last remaining support, accelerating the decline to new lows.

Bond Issuance

The number of genuine buyers at this auction has decreased, and the market was ultimately propped up by designated buyers.

1️⃣ The buying frenzy has cooled.

The bid-to-cover ratio of 2.77 is below the average of 2.86. Fewer participants indicate that investors are beginning to hesitate about whether buying short-term U.S. Treasuries is currently a good deal. No one can say for sure whether the Fed will cut rates or when it will do so, so it’s better to wait and see.

2️⃣ Foreign buyers are pulling back

Overseas institutions accounted for 56.7%, below historical levels. Major buyers like foreign central banks and sovereign wealth funds are typically the most stable purchasers of U.S. Treasuries.

Their declining share indicates that dollar-denominated assets are no longer as attractive as they once were.

Global investors are reevaluating whether it’s more profitable to park their money in U.S. Treasuries or elsewhere.

3️⃣ Designated buyers are being forced to step in

Primary dealers are underwriting 35.6% of the bonds — more than one-third. This isn’t because they’re bullish, but because there aren’t enough natural buyers.

Yield Curve

Long-term Treasuries are trying to attract buyers by offering lower prices, but the market isn’t buying it, and the dollar continues to depreciate in tandem.

This is not a healthy sign of economic recovery; rather, it reflects a triple whammy of fiscal overspending, inflation concerns, and tightening liquidity all hitting long-term U.S. Treasuries simultaneously.

(1) Bear Steepening Confirmed

Spreads across 2s10s, 2s30s, and 5s30s have widened across the board. The short end is being firmly held down by the Fed and remains virtually unchanged. On the long end, with no one willing to buy, yields are being forced higher and higher. Government bond supply is flooding the market; no one is scrambling to buy long-term Treasuries, so the government is forced to keep raising interest rates to attract buyers. This is a rise in yields driven by oversupply, not an economic recovery.

(2) Squeezed Arbitrage Margins

Only the 10Y-3M spread narrowed by 9 basis points. Institutions relying on borrowing short-term funds to buy long-term bonds (borrowing cheap 3-month short-term money → buying 10-year bonds to earn the spread) are seeing their profit margins squeezed ever thinner. Once they can no longer sustain this, a collective sell-off will trigger a stampede-style liquidity crisis.

(3) Simultaneous Weakening of the Dollar

Interest rates are rising while the dollar is falling, indicating that the market’s real concern is not economic overheating, but rather the return of inflation, excessive money supply, and the dilution of the dollar’s purchasing power.

Sentiment

(1) Rate cut expectations pushed back by a full year and a half

The market has completely abandoned the fantasy of rate cuts in 2026; the earliest possibility is now September 2027. This gap of one and a half years in expectations is the fundamental cause of the recent sustained decline in U.S. Treasury prices.

(2) May expectations fully priced in; positive catalysts exhausted

The market has already priced in a 96% probability that rates will not be cut in May. Even if rates do not actually drop, it will not drive bond prices higher. On the contrary, if inflation data exceeds expectations, the remaining 4% probability will instantly vanish, triggering a sharp decline in short-term bonds.

(3) Short-term yields are locked in, while long-term premiums are catching up

Short-term bond yields are firmly pinned at high levels by expectations of “no rate cuts for the foreseeable future,” while long-term bonds remain under pressure due to market concerns that persistently high interest rates will eventually cripple the economy and trigger a fiscal interest payment crisis. With both ends trapped, the bond market is caught between a rock and a hard place.

Market Sentiment

2-Year Treasury: Technical support holds, but momentum is running out

Moving average support remains strong, but CFTC data suggests buyers are drying up. Next week, the 2-year Treasury is expected to rally on inertia before consolidating at elevated levels. A truly safe entry point will only emerge once prices pull back to the 99'20'0–99'55'0 range.

(1) Candlestick Chart: Solid Foundation

Prices are trading above all moving averages, and the cost basis of these averages is significantly below current prices. This implies that moving averages will continue to track prices upward, forming a natural support level. Whenever prices pull back to these averages, technical traders will automatically step in to buy, making this support genuine.

Although volume data hasn’t yet reflected this, the fact that prices remain above the 20-day moving average (MA20) and well clear of the overbought zone indicates that bulls hold absolute control of the market.

(2) CFTC Analysis: Prices Are Rising, but Smart Money Is Quietly Exiting

Prices have risen, yet speculators’ net long positions have decreased by 103,000 contracts, and total open interest is also shrinking. The rally is not driven by new buyers entering the market, but rather by existing longs selling at higher prices. The buyers are passively allocated institutions, not actively bullish funds. This type of rally lacks staying power.

10-Year U.S. Treasury: Weekly Resistance, Negative Option Skew, Short Position Accumulation

Next week is highly likely to see a large bearish candle with heavy volume breaking through support. 111.0 is the critical threshold; a break below it will trigger an accelerated decline with no buffer.

(1) Candlestick Charts: Daily support is beginning to crumble; weekly charts face two massive resistance levels

On the daily chart, the cost anchor of the 20-day moving average (MA20) is virtually touching the current price, indicating that the moving average has completely lost its directional bias and will reverse at the slightest price movement. The only line still providing support is the 60-day moving average (MA60), but its support is already very weak.
On the weekly chart, both major moving averages (MA20 and MA60) are positioned above the current price, and their cost bases are at 99.990 and 101.160, respectively — these price levels have trapped a massive amount of capital. Every time the price rebounds to these levels, trapped investors rush to sell, pushing the price back down. The rebound potential is firmly locked in.
Although there are signs of a bottom forming on the daily chart, the downward pressure from the weekly trend is extremely strong. This is a classic “correction within a downtrend channel,” where the potential for a rebound is effectively capped by the weekly price resistance.

(2) Options: A break below 111.0 is a cliff

The current price has already fallen below the options safety line (111.5), and the options market is skewed toward the short side (negative skew).

The greatest danger is that the price level around 111.0 is heavily congested with open interest. Once it breaks below this level, market makers will be forced to automatically sell futures to hedge their positions. Price drop → forced selling → further price drop → more forced selling — creating a death spiral with no room for recovery.

(3) CFTC: The rally is a trap set by short sellers

Although prices rose this week, short sellers increased their positions (56,500 contracts) more aggressively than long positions (52,500 contracts). This rally does not reflect genuine bullish sentiment; rather, short sellers are taking advantage of the price rebound to establish more short positions at higher levels. The higher the rally goes, the more ammunition short sellers have to fire.