To The Moon

Weekly Overview

1. Treasuries are the market’s pricing anchor. With the 10-year Treasury yield above 5%, equities, gold, and crypto assets all need to be reassessed in light of high-rate pressure. The Treasury Department’s earlier buybacks failed to reverse the trend in long-dated bonds.

2. A peak in yields still needs confirmation. If oil remains range-bound, and with the two remaining rate hikes expected this year already priced in, the rise in yields may slow. But an escalation in U.S.–Iran tensions or more hawkish statements from the Fed could change that assessment.

3. The conditions for a bond rebound are building. CTAs’ positioning in 10-year Treasuries is low, while speculative net positions in 10-year Treasuries have moved from deeply bearish to neutral, increasing the possibility of a bond-market rebound. A decline of 18 basis points in the 10-year Treasury yield, followed by a move below 5%, provides two reference points for watching for a turn in bonds.

4. High yields do not necessarily mean a U.S. stock-market crash. If bonds and other leading assets continue to weaken, U.S. equities may remain under pressure. Still, growth at AI companies can support stocks, making a near-term crash highly unlikely.

5. Watch the dollar and yen separately. The U.S. Dollar Index is nearing weekly-chart resistance at 101.6. Yen weakness and pressure on Treasuries appear potentially linked; if the yen continues to fall, the strain on bonds also merits attention.

6. Stay measured on gold in the near term. Gold has broken below its previous weekly low, increasing downside risk. If gold futures approach $4,000, a short-term rebound may be worth watching, but it should not automatically be treated as the start of a new uptrend.

7. Bitcoin is one risk signal. Watch $83,000 first. A further break below $74,925 would materially increase the risk of another leg down.

8. Geopolitics continues to support oil. U.S.–Iran talks have produced no substantive outcome, so oil may remain range-bound. If an escalation pushes oil higher, inflation and Treasury yields could come under renewed upward pressure.

9. Favor short-dated strategies and risk control. Possibilities include selling equity-index puts at lower levels and an oil calendar spread. If the 10-year yield falls below 5%, a small position in TLT could also be reassessed. Option premiums are not risk-free income: position size and stop-loss plans must come first.

$标普500(.SPX)$ $标普500ETF(SPY)$ $SP500指数主连 2612(ESmain)$ $纳指100ETF(QQQ)$ $纳斯达克(.IXIC)$ $纳指三倍做多ETF(TQQQ)$ $NQ100指数主连 2612(NQmain)$ $道琼斯(.DJI)$ $道琼斯指数主连 2612(YMmain)$ $微型道琼斯指数主连 2612(MYMmain)$

This Week’s Report

On September 16, the Federal Reserve raised its target range for the federal funds rate by 25 basis points to 3.75%–4.00%. During September 21–25, markets continued to digest that decision. Fed officials’ remarks about further tightening reinforced expectations of additional hikes. Long-term Treasury yields remained elevated, becoming an important variable for U.S. equity valuations and the relative appeal of stocks versus bonds. The next question is whether inflation data and policy commentary will change the direction of rates.

Sector performance: Tech leads; energy and utilities fall

According to WorldPERatio data, the S&P 500 rose 1.21% and the Nasdaq Composite gained 2.06% over the period examined. By sector, technology gained 3.10% and health care rose 1.57%, while energy fell 3.07% and utilities declined 3.04%. Technology’s lead despite rate pressure shows that growth expectations are supporting share prices, though further gains will depend more heavily on actual earnings delivery. Lower oil prices weighed on energy, while weakness in utilities shows that even defensive sectors face pressure when rates are high.

Valuation: Index near its mean, sectors diverge

Valuation pressure at the index level has eased, but sector differences remain pronounced. Technology (XLK) trades at 34.59 times earnings and health care (XLV) at 30.34 times. Real estate (XLRE), at 29.74 times, nevertheless looks relatively inexpensive against its own five- and 20-year history. Energy (XLE) stands at 17.18 times but is marked as expensive on a five-year comparison. Beyond absolute multiples, each sector’s earnings cycle also matters when assessing valuation.

The S&P 500’s trailing P/E is 24.82, close to its 10-year average of 25.2 and down from the elevated 27–28 range seen in 2024–2025.

Equity–bond yield spread: A wider negative reading awaits the earnings test

According to MacroMicro data, the S&P 500 earnings yield is 3.79% and the 10-year Treasury yield is 5.217%. The difference is approximately −1.43 percentage points, a further widening from the previous reading. On this static measure, Treasuries yield more than equities, compressing the return compensation offered by stocks relative to bonds.

This spread is a static measure: the S&P 500 earnings yield is calculated as the reciprocal of the P/E ratio used, and subtracting the 10-year Treasury yield does not directly predict future returns. As the new earnings season unfolds, stronger earnings could lift the earnings yield; if Treasury yields also stop rising, the negative spread could narrow. Conversely, persistently high rates or disappointing earnings would continue to weigh on equities’ relative appeal.

Overall, U.S. equities gained this week despite expectations of further rate hikes and elevated long-term yields, but sector performance and valuations diverged. Technology led while trading at a relatively high valuation, so further gains will need earnings growth to be borne out in company reports. Declines in energy and utilities also highlight that sectors respond to different drivers. Although the S&P 500’s overall valuation has returned to around its historical average, the equity–bond yield spread remains negative; the case for allocation still depends on the evolution of earnings and rates. Looking ahead, the key questions are whether the new earnings season improves the earnings yield and whether inflation data and Fed remarks help bring Treasury yields down. If earnings deliver and rates stabilize, the current negative spread may narrow. Otherwise, investors should be alert to volatility in richly valued sectors.

Community Views This Week

@Ivan_甘灿荣:Policy Shift Before the Midterms? 3 Ways to Position for Market Opportunities💰

I had previously urged readers to watch for opportunities arising from depreciation in the euro and renminbi, and both calls have now played out. The euro has fallen 2% against the U.S. dollar since I first flagged it—a good start—but medium- and long-term investment targets will take more time. The broader target is around EUR/USD parity, so there is still room to move; investors can wait for a euro rebound before entering. The renminbi, meanwhile, is at the beginning of a cyclical shift, and its depreciation phase is likely to last some time. Investors can gradually position their portfolios accordingly. Those interested can also trade renminbi futures. Renminbi forward futures still price in appreciation, making those contracts a more attractive way to express the view.

$欧元主连 2612(EURmain)$ $欧元ETF-ProShares两倍做空(EUO)$ $HK人民币主连 2612(CNHmain)$ $小型HK人民币主连 2703(MCNHmain)$ $SG人民币主连 2612(UCmain)$ $小型SG人民币主连 2612(MUCmain)$

U.S. equity indexes and oil remain relatively strong

For now, a strategy of selling short-dated calls or puts on U.S. equity indexes can still be rolled forward. But I would not recommend selling options with longer maturities—more than two weeks—as unexpected events could cause losses in the account.

$标普500(.SPX)$ $标普500ETF(SPY)$ $SP500指数主连 2612(ESmain)$ $微型SP500指数主连 2612(MESmain)$$纳指100ETF(QQQ)$ $纳指三倍做多ETF(TQQQ)$ $纳指三倍做空ETF(SQQQ)$ $NQ100指数主连 2612(NQmain)$ $微型NQ100指数主连 2612(MNQmain)$

Gold and silver remain range-bound

With the U.S. dollar’s rate-hiking cycle only just beginning, precious metals are unlikely to perform well. A choppy, back-and-forth market is better suited to short-term speculative trades. If New York gold falls toward $4,000, a small purchase on weakness may be worth considering. But that would be a trade on a short-term rebound only, and the rebound is unlikely to match the size of August’s move. Investors should decide whether to participate based on their own circumstances.

$黄金主连 2612(GCmain)$ $黄金ETF-SPDR(GLD)$ $微黄金主连 2612(MGCmain)$ $1盎司黄金主连 2612(1OZmain)$ $白银主连 2612(SImain)$ $Silver Miners Etf(SIL)$ $微白银主连 2612(SILmain)$ $100盎司白银主连 2612(SICmain)$

Macro strategy takeaways for this week

This is nonfarm payrolls week, and it coincides with China’s National Day holiday. Historically, that combination can bring heightened volatility, so pay attention to risk controls.

1. Last week’s equity-index put-selling strategy continued to generate a steady 1% profit. The approach remains the same this week, but the Nasdaq short puts should expire on September 30 to avoid covering the nonfarm payrolls release if possible. Sell puts with strikes more than 6% below last week’s closing level—below 29,000. The short time to expiry necessarily means a smaller return, but safety comes first.

2. In currencies, the renminbi has bottomed and a depreciation cycle is very likely confirmed. Keep the core position and consider adding modestly, while keeping the total position below 15%. My view on the euro is unchanged: continue holding it.

3. If New York gold falls below $4,100 this week, around the release of nonfarm payrolls, a short-term purchase on weakness may be considered. The rebound target is $4,300–$4,400; stop out if it falls below $4,000.

@程俊_Dream: Stocks and Treasuries Diverge: How to Position Ahead of a Market Turn?📈📉

$CME比特币主连 2610(BTCmain)$ $BlackRock Multi-Sector Income Tr(BIT)$ $以太币ETF-Fidelity(FETH)$ $以太坊ETF-iShares(ETHA)$ $微型10年美债收益率主连 2609(10Ymain)$ $30年美债主连 2612(ZBmain)$ $10年美债主连 2612(ZNmain)$ $微型30年美债收益率主连 2610(30Ymain)$

The focus now is whether the Trump administration will take short-term steps to manage Treasury yields ahead of the midterm elections. The U.S. Treasury’s last intervention, however, has already proved ineffective. In any event, the bond market’s direction has already affected existing positions and the logic behind future trades. If other leading indicators subsequently move in the same direction, we will need to reduce exposure to risk assets further.

After gold broke below its previous weekly low early this week, a bearish break from an inside-bar pattern took shape. The risk of continued short-term declines—or even medium-term weakness in precious metals—has risen markedly. Bitcoin is another key reference point. Although it is still hovering near its recent highs, its high volatility means a reversal is possible. We can use $83,000 as an initial reference level; the more important turning point is $74,925. A break below the latter would signal the start of another leg down.

$黄金主连 2612(GCmain)$ $黄金ETF-SPDR(GLD)$ $微黄金主连 2612(MGCmain)$ $1盎司黄金主连 2612(1OZmain)$ $白银主连 2612(SImain)$ $Silver Miners Etf(SIL)$ $微白银主连 2612(SILmain)$ $100盎司白银主连 2612(SICmain)$

The final instrument worth continued attention is the yen. After repeated unilateral and coordinated interventions, its weakness has eased to some extent, but the core macro fundamentals have not changed. Over the past quarter, yen weakness and Treasury weakness have also seemed to move together. If the yen continues toward new lows, bonds and other markets will be directly affected.

$日元主连 2612(JPYmain)$ $日元ETF-CurrencyShares(FXY)$

Macro strategy takeaways for this week

For this week’s strategy, the euro long position was filled at an average of 1.1472. The stop-loss is set at 1.1360 and the target at 1.18.

$欧元主连 2612(EURmain)$ $欧元ETF-ProShares两倍做空(EUO)$

Last week’s gold long was filled at 4,340 and stopped out at 4,270 early this week. As noted above, with that attempt unsuccessful, gold faces greater downside risk. For now I will not consider another long entry. As for a short, its entry price is too far from the market, so I have canceled the pending order and will wait for further developments.

$黄金主连 2612(GCmain)$ $黄金ETF-SPDR(GLD)$ $微黄金主连 2612(MGCmain)$ $1盎司黄金主连 2612(1OZmain)$

In oil, the long position entered at an average of 75 previously reached its first target of 95, and half the position was taken off for a profit. This week, I have raised the stop-loss further to 88. The next target is 115, where I will close the remaining position.

$美国原油ETF(USO)$ $WTI原油主连 2611(CLmain)$ $小原油主连 2611(QMmain)$ $微型WTI原油主连 2611(MCLmain)$

If the oil long is closed by the protective stop, I will place new buy orders: limit buys at 83 and 75, with the stop below 67 and a target of 115. The orders will be good till canceled (GTC).

P.S. If a trade reaches its first target, the stop-loss will automatically be moved to the entry level. Any adjustments after execution will be reported in subsequent articles.

owen: It All Comes Down to Rates: Are Hawkish Expectations Overpriced and Treasury Yields Near a Peak?

Here is the bottom line. For U.S. stocks, gold and Bitcoin—the risk assets readers follow most closely—the biggest point of tension, or the main anchor for price action right now, is what happens to Treasury yields this week. Almost every asset class is being pulled by this one factor. Oil is the biggest and most sensitive variable affecting Treasury yields. For now, though, that variable is constrained: with relations between Trump and Iran at an impasse, oil prices have been confined to a relatively narrow trading range. The oil calendar-spread options strategy we proposed last week was based on that view. A week later, the position’s profit reflects the fact that oil has indeed continued to fluctuate within this narrow range.

The calendar spread, along with most of the other options strategies we discussed last week, is now profitable.

But this matters far beyond the profit or loss on one options trade. Range-bound price action, with a ceiling and a floor, is gradually reducing the rate market’s sensitivity to oil-price moves. Put simply, Treasury yields may stay elevated while their upward momentum slows as oil oscillates, rather than continuing to surge.

An important distinction is needed here: even if yields remain high, U.S. stocks will not necessarily suffer a crash. A mild, gradual slide is still possible, but it would probably remain within the previous trading range.

$1.5倍做空NVDA ETF-Tradr(NVDS)$ $英伟达(NVDA)$ $美光科技(MU)$ $谷歌(GOOG)$ $亚马逊(AMZN)$ $特斯拉(TSLA)$

There are two reasons for this view.

First, a rising U.S. Dollar Index may confer a valuation benefit on dollar-denominated assets.

Following Warsh’s hawkish policy decision a few weeks ago, the implied probabilities of rate hikes in October and December have both risen. The U.S. Dollar Index has continued to make higher lows on the weekly chart and looks close to breaking above the key weekly resistance level of 101.6. If it breaks through, upward momentum may continue. A stronger Dollar Index is, in fact, positive for dollar-denominated assets such as U.S. stocks and Treasuries.

Second, forecasts for growth among leading AI-related technology companies suggest that a 5% 10-year Treasury yield may not put much pressure on their absolute valuations. Consider a recent Goldman Sachs research finding. With the 10-year Treasury yield now at a historically high 5.2%, Goldman’s analysis says that, for large tech stocks’ absolute valuations to remain unchanged—that is, for the gap between their future growth rate and the risk-free rate to remain unchanged—their overall return on investment would need to reach 15%. Goldman analyst Eric Sheridan estimates that Alphabet, Amazon, Microsoft, Meta, Oracle and SpaceX would need to generate $1.42 trillion in aggregate revenue during 2028–2030 to achieve a 15% return on their AI buildout in 2026–2027.

$微软(MSFT)$ $Meta Platforms, Inc.(META)$

That sounds astronomical. But there is another side to the calculation: Amazon, Microsoft and Alphabet, the three major public-cloud providers, already have a combined order backlog of $1.69 trillion. Goldman therefore calculates that converting about 59% of that existing backlog into future revenue would be enough to meet the 15% return hurdle for AI investment.

[Chart 26 in the original]

In other words, these leading AI stocks have considerable capacity to withstand a 10-year Treasury yield of 5.2%. With that in mind, we believe the risk of a major U.S. stock-market crash over the next two to three months is low, though a modest pullback of up to around 6% remains possible.

CTA funds’ positions in 10-year Treasuries are close to their lows of recent years, so the near- to medium-term potential is clearly skewed to the upside for bond prices. There is little room left for CTAs to sell or short Treasuries in the near term. If Treasuries rebound, the move could therefore be substantial.

CTA funds’ mechanically triggered trading is generally based on an asset’s volatility over a given period. In other words, CTAs will buy Treasuries when a rebound exceeds one or two standard deviations. Bank of America estimates the minimum threshold at 18 basis points: a drop of more than 18 basis points in the 10-year Treasury yield could trigger a Treasury rebound.

To be more cautious, I have set the reference point at the crucial 5% level. If the 10-year Treasury yield falls below 5%, buying Treasuries on weakness becomes worth considering, using TLT as the corresponding ETF. If it does not break below 5%, do not take the risk of trying to pick a bottom in Treasuries.

Once it does fall below 5%, I expect U.S. stocks and gold to rebound in the short term as well; positions can then be established in line with the move.

Macro strategy takeaways for this week

This week, I am sticking with selling equity-index puts at lower levels. Consider selling QQQ puts with strikes below the 685 support level and rolling the position weekly.

NVIDIA puts can also continue to be sold: consider strikes below its 20-week moving average, around 207.

The oil calendar spread mentioned last week, designed to profit from the difference in time-value decay while oil stays range-bound, remains a position to hold.

$20+年以上美国国债ETF-iShares(TLT)$

In addition, after the 10-year Treasury yield falls below 5%, a small position in the long-duration Treasury ETF TLT could be considered as a bottom-fishing trade.

Follow-up on the win rate of last week’s strategy report