Market Outlook #83

This blog references an opinion and is for entertainment and informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

In this 83rd edition of the Market Outlook here at Ostium Insights, we'll be taking a look at the week ahead in markets, looking at price-action, positioning and event risk for SPX, Gold, EUR/USD, NVDA and XLE.

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Let's first take a look at the relatively quiet week ahead on the macro calendar: 

WEDNESDAY: US FOMC MINUTES

WEDNESDAY: VARIOUS FED SPEECHES

THURSDAY: US INITIAL JOBLESS CLAIMS: (CONSENSUS 210K VS PREVIOUS 211K)

THURSDAY: US PHILLY FED MANUFACTURING SURVEY (MAY): (CONSENSUS 18.6 VS PREVIOUS 26.7)

THURSDAY: US S&P GLOBAL MANUFACTURING PMI (MAY) (PREL.): (CONSENSUS 54 VS PREVIOUS 54.5)

THURSDAY: US S&P GLOBAL SERVICES PMI (MAY) (PREL.): (CONSENSUS 51 VS PREVIOUS 51)

FRIDAY: VARIOUS FED SPEECHES

FRIDAY: US MICHIGAN CONSUMER SENTIMENT INDEX (MAY): (CONSENSUS 48.2 VS PREVIOUS 48.2)

Now, let's dig into asset-specific price-action for the week ahead, looking firstly at SPX:

SPX:

Price: $7373

Weekly:

If we begin by looking at the weekly chart for SPX, we can see that the index just completed 7 consecutive green weeks, rallying off the March 30th low at $6322 to new all-time highs at $7524 as of last week, with no signs of trend exhaustion on the higher timeframes. We are now sat right around a confluence of fib levels and a psychological level at $7500, and it would not be a surprise to see some digestion of this move occur here near-term. That being said, if we accept above $7500, flipping that level into support, there is no technical resistance on the weekly timeframe all the way up towards $8000+, which would be very much a melt-up-esque move in action. I shared an event study on April 30th that was highly suggestive of continued strength for SPX through 2026, with each prior instance boasting significantly higher risk-adjusted returns for owning the index over baseline. Following that, on May 7th, I stated that a melt-up was infinitely more probable than a melt-down and the index rallied several hundred handles in a straight line off that. Here, I am now expecting some continued consolidation that holds above the May open at $7232 as support (though I would not rule out a sweep and reclaim) - and ultimately leads to a broadening out of this rally and continuation higher, where June sees new all-time highs and more price discovery. I remain of the view that the near-10% correction we got into the March 30th low was *the* buying opportunity for 2026 and those expecting a second consecutive 20%+ drawdown after 2025 will be left on the sidelines - I have not changed this view. If anything, I am growing more convinced of the probability that we really do enter a melt-up period with frequent shallow pullbacks that feel immensely uncomfortable to buy, with the index ripping another 10% higher into Q4; this is where the wall of worry turns into a tsunami of greed and even the most stubborn bears are forced to capitulate - and the first 10% or greater correction that comes subsequent to that period of entrenched exuberance is not one you want to be a buyer of. If we do accept above $7500 going into June, that will be a point of confluence for this view.

Daily:

Turning to the daily, we can see that price is already sort of showing this characteristic of grinding higher with frequent shallow pullbacks, with the most recent push above $7500 providing the first real bull trap since the March 30th lows. We have come off that high into the May VWAP, where the index is finding support, and we do also have the 30d rolling VWAP below us and above that May open. I do think we are likely to hold above $7230ish near-term and then chop around a bit before continuing higher. Acceptance below the May open and flipping the 30d RVWAP into resistance would be the earliest indication of a more material pullback underway. There is no trend exhaustion on this timeframe either and daily structure remains bullish, so we should expect higher-lows to form and price to push through $7525 over the coming weeks. If you are sidelined on all equities and looking for entries, I think somewhere between $7230 and $7280 would be a really nice area with a tight invalidation. Ultimately, I expect SPX to be trading towards $8000 sometime in Q4.

Gold:

Price: $4540

‍Weekly:

If we begin by looking at Gold on the weekly timeframe, we can see that price continues to compress and chop around as expected following the historic volatility earlier this year, with Gold rejecting again below the anchored VWAP from all-time highs at $4890 and bleeding lower from there, though remaining tightly sandwiched for now between support at $4500 and that upper resistance. We are also now consolidating towards the anchored VWAP from the summer 2025 range lows and the 365d rolling VWAP, and this area below should hold near-term as support; in fact, that's the first place I would be interested in any longs on Gold - a move lower towards the yearly open and 365d RVWAP at $4330 presents a high R/R long with tight invalidation on a close below $4245, below which there is zero support all the way back into $3877. Only if we accept below that major support cluster would I expect another leg lower to follow; if we hold here I simply expect range trading to continue to be profitable, where buying this bottoming end of the range around the 365d RVWAP will give us another test of $4900 over the coming weeks. And only when we close the weekly back above that level can we start talking about an all-time high retest, let alone price discovery.

Daily:

Turning to the daily, we can see all the hallmarks of post-blow-off-top compression: lower-highs and higher-lows and choppy momentum as volatility unwinds, with price failing to break that anchored VWAP from all-time highs on successive attempts but simultaneously failing to break lower than the March capitulation low into the 200dMA and 365d rolling VWAP. We have been in a very tight sideways range since that March low, with much of the price-action occurring within a 10% range. Daily structure technically remains bearish until we are back above $4900, but I do not really see high R/R shorts on Gold at present, and the only short setup I'd be willing to take near term would be a run of last week's high into that upper trendline and anchored VWAP, where I would look to fade and would add heavily on a subsequent breakdown, targeting the yearly open for a retest. Conversely, back down at the 200dMA and below is where I would be keen on longs, cutting aggressively if we flip the yearly open into resistance on the daily timeframe. Very clean structure here for playing both sides of the range but for now a waiting game.

EURUSD:

Price: 1.1626

‍Weekly:

Beginning with the weekly for EUR/USD, we can see that price ripped higher off that anchored VWAP from the 2025 lows at 1.1383 several weeks ago, reclaiming the 365d rolling VWAP as support and continuing higher through the 2026 open into major resistance at 1.185, exactly as anticipated. We found resistance at that key level and price is now chopping around between that resistance and major support at 1.1585, which is multi-month reclaimed range support. Weekly RSI is right around the 50 mark - and if price is going to hold as a higher-low I would expect it to do so right here with supportive momentum. If we close the weekly back below this support with momentum rolling over, it looks like it wants to sweep the swing-low at 1.1383 at the very least into that anchored VWAP from the 2025 lows, and I would look for shorts towards that level with invalidation on acceptance back above the 365d rolling VWAP. I am not interested in longs unless we're much lower (1.13ish) or back above the yearly open, above which I would expect the top end of the range to get blown out and price to climb back towards yearly highs above 1.1205.

Daily:

Turning now to the daily. we can see that daily structure has turned bearish following the lower-high below 1.184 and the subsequent break and close below the 200dMA, printing that fresh lower-low. We are now sat right on the 365d rolling VWAP and anchored VWAP from the March lows, with range support directly below. Daily momentum has rolled over too here, so I would expect to see the attempt at a bottom here above 1.1585 fail and the short setup back towards the March lows begin to form. That said, if this is a bear trap, we should see any move below 1.1585 met with immediate demand and a strong reclaim of the 365d rolling VWAP as support, with daily RSI back above 50: whilst not a long setup in and of itself, that would then open up the move back through the yearly open at 1.174, where longs become favourable again for a breakout beyond 1.184. Not much else to add here for now...

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NVDA:

Price: $222.32

Weekly:

Looking firstly at the weekly timeframe for NVDA, we can see that all the Nvidia bears got obliterated as price reclaimed the yearly open, flipped it into support and ripped higher through all-time highs, closing above the prior highs last week and tagging $236.81, where it found resistance. Nonetheless, price is firmly above all technical levels, VWAPS and MAs, with no trend exhaustion on the higher timeframes, so this is - contrary to what often appears on my X timeline - not bearish. If we see price reject here, flip prior highs back into resistance and then lose the yearly open at $189, we have a much bigger topping pattern in play, from which we could be looking at a more serious correction, but there is so much support between here and there and people getting excited about calling Nvidia tops are more likely to watch it continue higher without them than validate their bearish thesis, in my view. More probable from here is a price holding $212ish as resistance turned support and continuing through $237 towards $260 over the coming months.

Daily:

Dropping into the daily, again we have no signs of trend exhaustion on this timeframe and daily structure is firmly bullish with price holding above key levels. We should therefore be looking for the formation of higher-lows on any pullbacks and be viewing those as opportunities to look for longs: if we do continue to pull back here, I would be looking at the 30d rolling VWAP which is confluent with prior highs around $212 as an area where longs could be very favourable with tight invalidation, as acceptance below that 30d rolling VWAP opens up a move back towards $196ish, above which I am expecting the higher-low to hold, given the momentum and structure profile here. Again, acceptance below the yearly open with daily RSI below 50 would be the cleanest risk-off expression for NVDA, as it turns daily structure and momentum bearish with price below a key level. Until then, dips are long opportunities.

XLE:

Price: $60.58

Weekly:

Beginning with the weekly view for XLE, we can see that price found strong support at the anchored VWAP from prior swing-low above that 365d rolling VWAP, with energy stocks having rallied for months without break into fresh all-time highs at $63.40. Weekly momentum reset from extremes as price found support at that $53.40 level and we then saw some consolidation, the formation of a higher-low and now a move back above the anchored VWAP from all-time highs, with last week closing firmly above that level. This is a strong bullish trend in a macro regime that is supportive of energy stocks, so we should continue to expect dips to be bought and new highs to be made. From here, I would expect continuation through the highs into $66.43, followed by $70 as the next minor resistance. The only technical bearish case to be made would be if we take out the highs and print some bearish divergence and then break down; until then, uponly.exe. No shorts unless we see that trend exhaustion and subsequent breakdown, or we see acceptance below $53.40, at which point it would look very clear that the bull trend in energy is over.

Daily:

Turning now to the daily, we can see that daily structure has turned bullish again with the most recent close back above the May open, with daily momentum holding bullish too, and price is firmly above all the key MAs and VWAPs. If we find some resistance around $61 this week, a dip into the $58-$59 range would be a very buyable opportunity, with invalidation on two consecutive daily closes below $57.40, looking for price discovery. The reason for this invalidation is straightforward: if we have daily bullish structure and momentum and have just broken back above the May open after forming a higher-low, we have zero reason to flip the cluster of VWAPs around $57.50 into resistance again; if anything, the dips from here should be shallow until we break new highs. So, if we do sweep the Friday low as a bear trap this week into and below the May open, we should see immediate demand to send it back above $60. Flipping $57.40 into resistance with a lower-high in place below the all-time high = early warning signs for a major trend shift, in my opinion, where the lows into $53.30 become probable targets for downside.

I hope you've found some value in the read this week - please RT, share, engage etc. if so!

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