Last week's recap
A few good trades. The yen continued its move and worked both long zones nicely. A short was caught on WTI — closed partly in profit and partly at breakeven to avoid weekend shakeouts. On gold the Limit Driver zone got broken, but the zone worked well from the other side and covered the losses. Not the most active week, but a profitable one.
The week ahead — context
Oddly, the calendar sites are ignoring Warsh's testimony scheduled for July 14 at 10:00. For this plan it is the second most important event of the week after US CPI — and nearly equal in weight, because he speaks right after the inflation data lands. So Tuesday won't just be CPI shaking the market, but the testimony too, and the move that starts on Tuesday is set up to run through August 7.
The fork: if inflation steps to 4.5% or higher, a September hike gets priced at 100% and the dollar goes up. If they paint 4% or less, the dollar falls and everything else rises against it. Either way, the moves should be good ones.
EUR
On the euro options, one participant and one portfolio have shown up. In the Asia session, one option is to try sells off the zone where P/F, Renko, Key and Limit Driver all lined up, targeting the zones below — and from there, buys become interesting. A strangle is open as an expectation into August 7, with a hedge below it and the expectation of a strangle and straddle. Given how long the bulls and bears have fought at one point — two weeks — the spring is going to uncoil very fast.
JPY
Watching the strangles with puts in the weekly zone: the path where the yen gets poured down there is exactly where the Bank of Japan and the US Treasury would step in with interventions and carry everyone up to the upper zones. Mapped onto spot, that's 165 and 167 again. The key is that Monday doesn't spill it to 158–159 — hold it until CPI, then on Warsh, or Wednesday after clearing, the bears can be carried out.
GBP
The pound did none of what was expected; buys off the nearest zones remain in question. The weekly zone above sits cleanly on the monthly zone, but if the euro trades down, the pound can't rise alone. A drop straight to 1.2915 looks too big — the euro has strong spot support at 1.1185 — so a dip to 1.3250 and then a correction is the likelier shape. No clear picture; the options didn't highlight anything worthwhile either.
NQ & SP500
On NQ, buying back is still a consideration, though CPI Tuesday is exactly what could spill it to 29530. A beautiful butterfly went in, and the weekly zone lined up with it — shorting there is comfortable, and as a target it looks great too. On the SP500 the situation is similar: a calendar butterfly at the 7850 strike, so a push there is a short. Buys — to be reconsidered after the open.
Gold & Silver
On gold they're now trying to buy it back, and there's no arguing with that — though lower would have been nicer. If they gap to 4230, sells there first, then a buy-back toward 4300. The active rollover into the December contract has begun; that zone is interesting as a target to take profit into with counter-sells. Key caveat: if the open goes for a new low, no buy-backs. And the butterfly on the October contract is back — its far wing is the most interesting part to work.
Silver: no ideas for now — options highlighted nothing and liquidity is thin. If the open breaks 62 upward, buys off 60.210 on the pullback. Off the upper weekly zone — where a lot has converged — sells, with 60.21 as the pullback reference. On a spill from the open, no entries before 52.80–52.
WTI
Oil was closed at a breakeven fix, and they turned it further down anyway. Iran is still playing games with the US. The long-running range for a couple of months is 59–82.50, with a decent chance price just hangs in the 69–74 balance until the next Iran headlines. Oil doesn't depend much on inflation — rather inflation depends on oil, and strongly. The reserves will eventually show their bottom, and refilling them without Hormuz open would carry price up cheerfully.
The plan, in one line
These are zones and scenarios being watched — the market decides, not the trader. Let price come to your levels and let the confirmations line up before you act. New to the terms? The glossary covers every structure named above.