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After a long week of dance competitions at “Nationals” in Orlando, Florida, I’m back. I’m pleased to report that my 11-year-old daughter and her partner secured first place in their duo and also earned first place in several team events. After winning first place for her solo at Nationals last year, she placed fifth this year—a very respectable showing. One thing I’ve noticed over the years is that dance and cheer competitions have become a huge business, comparable to other youth competitive sports leagues. However, I’ve yet to find a suitable way to invest in this industry.
We also spent considerable time at Universal and Disney parks. Having visited these parks several times over the past decade, I noticed that both parks felt unusually quiet this year. Wait times were relatively short, and I’m not sure if the Orlando heat and humidity kept visitors away or if there was another factor involved.
Meanwhile, the S&P 500 moved lower this past week. Apart from the Canada tariff headlines on Thursday, the week was relatively uneventful—making it a good week to be away. One notable observation is the shift occurring in the dollar. The RSI readings are improving, and the DXY is on the verge of breaking above two significant downtrends.
With Saturday morning’s announcement of 30% tariffs on the EU, the EURUSD weekend trading is down 40 basis points. This move will likely be sufficient to push the DXY above the trendline when trading resumes on Sunday night. Although this shift may not occur immediately, there’s a strong chance the DXY is headed back towards the 101 level.
https://www.tradingview.com/x/1ov11unJ/
That likely means that the EURUSD is heading back to the 1.12 region.
In the meantime, we are seeing 30-year rates moving higher and positioned to potentially surpass the 5.1% level observed in mid-May. It appears the 30-year rate broke out of a bull flag on July 7 and has since advanced to 4.96%. Even a 61.8% extension of this flag suggests the 30-year rate could reach 5.17%, while a 100% extension points toward 5.35%.
https://www.tradingview.com/x/980rXiUr/
Ultimately, I think we could see the 30-year minus 3-month Treasury curve steepen out to about 190 bps, with the majority of this move coming from the 30-year rate rising. This isn’t to say the 3-month Treasury bill won’t fall—clearly, if the Fed starts to cut rates, it will—but I believe the 30-year rate has further to rise.
https://www.tradingview.com/x/HlMd6sv9/
It is the same story for the TLT, which also shows the ETF breaking out of a bear flag, signaling potentially lower prices.
Ultimately, what is driving this is inflation expectations. The RINF ETF, which measures inflation expectations, is again attempting to break out of a broadening wedge pattern. It still needs to surpass 33.50 to signal a larger breakout, but there are indicators within the chart suggesting it could reach that position.
https://www.tradingview.com/x/Qg00tRWA/
I had mentioned this a few days ago—I can’t exactly remember when—that Meta could be forming a 2b top, and so far that still appears to be the case. The chart clearly shows a failed breakout attempt, an RSI that’s rolling over, and volume picking up as the stock declines. A break below support at $710 would likely confirm this pattern and signal the start of a much bigger pullback. See: JOB REPORT PREVIEW AND META 2B TOP??
https://www.tradingview.com/x/JB1IsC78/
Netflix reports results this week, and the chart doesn’t look great heading into the announcement. The RSI is rolling over, and volume has been increasing on recent down days. Additionally, shares have broken below an uptrend at $1,260, within what appears to be a larger rising broadening wedge pattern. If this pattern plays out, it wouldn’t seem unreasonable for the stock to decline back to around $1,100.
https://www.tradingview.com/x/X6FJ42DX/
Historically, we are entering the period of the year when 1-month implied correlations typically bottom, and when implied correlations bottom, markets often top. This pattern is largely driven by the implied volatility dispersion trade and the subsequent unwind following earnings releases. With earnings season about to begin, the unwind should be roughly a week away.
When the 1-month Implied correlation index starts to rise, you will know. (See: A Market-Topping Volatility Trade Is Sending A Warning Message, Again)
https://www.tradingview.com/x/FMNEMHUg/
-Mike
TERMS BY CHATGPT:
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Implied Correlation
Definition: A measure of how closely stocks within an index move together, derived from options prices.
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Implied Volatility Dispersion Trade
Definition: A strategy involving selling volatility (options) on an entire index and buying volatility on individual stocks within the index, betting that stocks will move differently (disperse).
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Unwind
Definition: Closing out or reversing positions in a trading strategy, often after a specific event (e.g., earnings announcements).
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Earnings Season
Definition: A period when most publicly traded companies release quarterly earnings reports.
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Rising Broadening Wedge
Definition: A bearish technical chart pattern characterized by price movements within diverging upward sloping lines, signaling a potential reversal lower.
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Bull Flag
Definition: A bullish chart pattern resembling a flag, indicating a brief pause in an upward price trend before continuing higher.
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Bear Flag
Definition: A bearish chart pattern indicating a brief pause in a downward price trend before continuing lower.
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2B Top
Definition: A technical pattern signaling a potential reversal, occurring when a stock breaks above a prior high but quickly reverses and falls below that breakout level.
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RSI (Relative Strength Index)
Definition: A momentum indicator measuring recent price changes to identify overbought or oversold conditions.
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Extension Levels (Fibonacci Extensions)
Definition: Technical price targets calculated using Fibonacci ratios to forecast how far a price may move after breaking out from a pattern.
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Basis Points (bps)
Definition: One-hundredth of a percentage point (0.01%), used commonly to measure interest rate changes.
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Tariffs
Definition: Taxes imposed on imported goods, typically to protect domestic industries or influence trade policy.
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
Subscribe to receive this FREE daily commentary directly in your email
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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Mott Capital's Market Chronicles September 26, 2025 1:32 PM