Powell Saves The Week However Nothing Has Changed
Subscriber Data for Aug22 2025
As we anticipated Jerome Powell’s Jackson Hole speech was going to move the markets but we never know what the big guns that actually move things are going to do. There was a case to be made that no matter what, the markets would shed risk in anticipation to then reassert their bets post speech. Well the market has spoken and what had looked like a decent set up to roll things over, once again was just another opportunistic stick save.
The risk markets rose, yields fell and the US Dollar was weak in anticipation of a clearer path to rate cuts moving forward. This was always our base case and now it seems that no matter where the NFP report comes in at in a few weeks, we are going to put our base case cut to 50bp. The writing is on the wall and Powell has clearly moved away from targeting interest rates and looking for a more balanced approach focusing equally it seems on employment.
Wow go figure, wonder why he’s concerned, he stated,
While the labor market appears to be in balance, it is a curious kind of balance that results from a market slowing in both the supply of and demand for workers.
- J. Powell Jackson Hole 8/22/25
So with that, we know what’s in store and the focus upon unemployment rising is well warranted at this time. Somehow the fact that lowing interest rates is a good thing is back in favor, yet we know that it portends to a slowing economy and we believe we will soon be hearing the battle cries of “soft landing” vs “hard landing” in no time!
Anyway lets first take a look at risk markets and the U.S. Yield Curve because this is where we will continue to see the bond market participants start to price in future rate cuts. Let’s first take a look at where things settled out on Friday and compare Friday’s yield curve to the high and low yield markers from the past that we have often highlighted:
So we have a situation now where the 2Y is down about 9bps from the 3/23 lows but the 30Y is +124bp in that same time…we suspect the yield curves will continue to exhibit this steepening fashion for some time now.
When we look at the U.S. Yield Curves together you can clearly see the yellow and red lines (2s30 and 5s30 respectively) blowing out, no doubt now the big bond houses are going to start reinforcing these moves now as the bank and institutions will play catch up once the FOMC does actually move rates down:
As far as the U.S. Govt 2Y we are still awaiting that breach of the 3.65% area to usher in the next phase of rate cuts:
Alright let’s now move to a couple of technical charts, first up the QQQ ETF where Friday was an absolute stick save technically and as we noted this one could have gone either way. For now the bulls can still manage to keep things afloat, although we do believe they are living on borrowed time now:
Moving to the Nasdaq and SP500 futures. The Nasdaq trend toward the long term trend slope is still in place. Please note our weekly support resistance areas as this is where the battle will be waged should these levels get hit:
The SP500 futures are also trying to reassert themselves into that upper trend channel but have failed thus far:
When we look at the spread between these two markets, the SP500 outperformed the last 2 weeks and with the markets running into ATHs once again, this doesn’t give us that warm cozy feeling like this move into higher highs will last. Usually the SP500 would be a laggard into new highs:
Our final chart is Bitcoin here and technically the bulls survived the $112k area this week, but it still remains the enemy level of the bulls moving forward:
So with the FOMC seemingly concerned and focused upon employment we will continue to err on the side of bullish caution because we have seen this play book time and time again and when we look at charts like this next one, well, you better pay attention:
We cannot stress enough the point here of focusing upon projected future returns given an investors starting point. When you look at the chart above, please, ask yourself is my investment horizon better served by staying in and fully invested, or does it make sense to be more patient, to assess ones overall goals and be prudent? What’s the next 10% gain worth? Is it worth risking 50%? Is it worth risking years of returns to only see the fundamentals deteriorate and destroy years of gains? What is time worth? These are responsible questions to ask yourself.
Ok we will now move onto our subscriber only section where we highlight all the daily data and trading trackers that we hope our investors use to compliment their own investment themes. We believe the way we structure our data, the way we present it to you, offers a unique advantage to follow along and learn how to trade and invest in a more global macro hedged format. We really put a lot of effort into trying to best convey the markets movements, the base case fundamentals that exist and then to extrapolate them into actionable processes. We believe that if you follow our work, start implementing some of the things that we present, you will not only improve your odds of winning but also gain an invaluable mindset to take through all facets of your life. So think about subscribing and becoming a supporting member, at the least share our work if you can!
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Magnelibra CTA Futures Market Trend Sentiment (Our proprietary commodity trading advisory futures market sentiment long/neutral/short market flows indicator) The portfolio is made up of the core futures markets we cover and the indicators are for single contracts of the futures market, whether long, short or zero neutral. The P+L is generated via the starting daily position and the ending daily settlement. This is considered a high risk alternative strategy. However most investors should leave a portion of their overall portfolio within a high risk basket. Some of the percentages of the overall portfolio dedicated to high risk should vary from 3% to 18% depending on ones overall time to invest and risk profiles. We added the Sharpe to our data now as well for those quantitative types!
NOTABLE CHANGES:
Move to “1” Long Bias: ZB, ZN, ZF, CL, RB
Move to “0” Neutral Bias: NY, S6, GC
The U.S. Bond Yield Curve (This is our daily graphic displaying the U.S. bond market yield curve changes. We follow the 2 year thru 30 year durations. Please note that bond prices work inversely to yield changes so for instance if bond prices are rising and moving upward, then their yields are falling or moving downward. We also track the relationship between the durations known as US Yield Curve Spreads, when we list it as 2s5, we are comparing the yield differential between the 2 year vs the 5 year with the positive/negative viewed from the higher durations perspective.
Daily Settlement Sheet (Magnelibra’s Futures and Cash bond market coverage of the daily settlement prices and dollar value of the contracts given move)
The 5 & 30 Day rolling changes with top 3 Winners and losers (The last 5 trading days and 22 trading days net changes)
Magnelibra MEGA9s Portfolio Tracker (This is a synthetic long only portfolio of the Top 9 largest equities by market cap. We started this tracker because we understand Ai dominates the investment landscape and operates in a binary construct. What we mean is that it issues a buy or a sell and will do so in reinforcing mechanisms, meaning if alpha is rising it will add, if it is falling it well sell and remove. We also created a “hedge” for those that want a more active approach to tactically maximizing their long only static portfolio of equities)
We missed the hedge last week by a few cents once again and we will most likely target the 580 Calls this week and will have a better idea of this weeks hedge in tomorrows update. As far as the MEGA9s they gained $316bn with Tesla gaining 4.97% and Alphabet +3.26% the big winners Friday:
MEGA9s total market cap chart (This chart represents the total market cap of the MEGA9s and lists the 21pMA in pink along with the 50p and 200p MA)
The MEGA9s 21pMA has proven its worth again as the market has rallied off of this level for now:
Strategy Inc / BTC Trading Tracker (Bitcoin vs MSTR equity, Our Strategy Inc. Covered Call Portfolio Tracker, Long 100 shares MSTR and short 1, 4% to 10% out of the money call on Monday’s open each week)
The MSTR call strategy short this week is the $380Call at $4.00 closed OTM or out of the money. One thing we need to stress is if you are following along this strategy, you have to be diligent and have to do it week in week out. What we are demonstrating is that it is more advantageous to play MSTR this way as opposed to just simply owning it outright and subject to directional risk:
New metrics are now BTC/MSTR shares = 0.1904%, total BTC owned = 629,376 and the dollar cost average = $73,320 with the premium metric settling today at 1.61x just collapsing. (was over 1.90x on recent highs). These metrics continue to paint a difficult picture moving forward here for Strategy:
Thank you guys, appreciate all the support and thank you for reading our work and hopefully your gaining valuable insight and improving your own techniques and improving your non linear thought processes.
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Link: https://proinvite.kraken.com/9f1e/11l9bp1z
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