To The Moon

Weekly Report: Key Views

Hello everyone, and welcome to another edition of our Macro Strategy Weekly. Each issue features market strategy insights from selected contributors with relevant professional expertise. We also track how their views perform each week. Here is a preview of this week’s key ideas:

• Markets Turn Defensive as Volatility May Persist Through Next Year’s First Quarter 

  Under the US dollar cycle model, market volatility could continue through the first quarter of next year. Safe haven, arbitrage and options strategies should therefore take priority. If US equities break below key trendlines, investors should focus on risk control. Gold is unlikely to regain bullish momentum before reclaiming its 20 day moving average. A confirmed break below $4,000 could open a test of the $3,200 to $3,400 support zone.

• Oil Faces Squeeze Risk, Favoring Calendar Spread Strategies  

  Stalled US Iran negotiations and the approaching midterm elections could provide a catalyst for bullish speculation and amplify oil price volatility. Investors could consider buying nearby contracts and selling deferred contracts, or purchasing options with predefined losses. These moves remain highly news driven and could reverse quickly if geopolitical conditions change.

• Technology Stocks Face Breakdown Risk as Traders Look to Short Nasdaq Rallies  

  Nvidia has declined for three consecutive weeks, with $207 to $208 serving as key support. A confirmed breakdown could open a move toward $164. The Nasdaq’s longer term gradual bull trend remains intact, although near term correction risk is rising.

• Institutional Deleveraging and Potential Selling Pressure Leave the Bottom Unconfirmed  

  Institutional net leverage in US equities fell to 43.4%, while large technology stocks also underperformed, indicating an adjustment in allocations. CTA models estimate potential buying of about $9 billion over the next month in an upside scenario, compared with potential selling of roughly $65 billion in a downside scenario. This imbalance means that a brief rebound would be insufficient to confirm the end of the correction.

• Earnings Become the Key Variable as Rate Expectations Remain in Focus  

  Technology earnings will directly affect expectations for AI growth, so investors should wait for key results before adjusting positions. An October pause in rate hikes is largely priced in, shifting the policy focus to expectations for a December hike. Meanwhile, open interest in Treasury futures has declined significantly, so investors should continue to monitor whether the downward trend in yields can be sustained.

• Pause Deep Out of the Money Put Selling and Deploy Volatility Strategies Only When Triggered

  A defensive approach is preferred this week, so selling deeply out of the money puts should be paused. If the back adjusted or roll adjusted continuous S&P 500 futures contract breaks below its 120 day moving average, investors could buy an at the money QQQ call and put to benefit from rising volatility.

• Wait for Directional Confirmation in Gold, Then Trade Volatility Through a GLD Straddle  

  Gold continued to decline despite a weaker US dollar and lower Treasury yields, indicating a weak response to favorable catalysts and possible liquidity pressure. Investors should wait for gold futures to break decisively below $4,000 or rebound above their 20 day moving average. An at the money GLD call and put could then be purchased to capture the resulting expansion in volatility. $黄金主连 2612(GCmain)$ $微黄金主连 2612(MGCmain)$ $1盎司黄金主连 2612(1OZmain)$ $黄金ETF-SPDR(GLD)$

This Week’s Report:

S&P 500 Weakens in the Near Term as Sector Valuations Remain Divergent and Lower Rates Ease Pressure Slightly

As of October 27, 2026, Beijing time, the S&P 500 ETF (SPY) stood 5.22% above its 200 day moving average, narrowing by 0.44 percentage points from 5.66% the previous week. It was also 0.29% below its 50 day moving average, indicating that the medium to long term trend remains supported while near term performance has weakened. Among the 11 sectors, six traded above their 200 day moving averages and five traded below. Energy (XLE), Health Care (XLV) and Information Technology (XLK) stood 19.46%, 13.34% and 10.44% above their respective 200 day averages, showing strong trend support. Financials (XLF), Consumer Staples (XLP) and Materials (XLB) were 4.34%, 4.32% and 0.74% above their averages, with Materials approaching its trend line. Communication Services (XLC), Utilities (XLU), Industrials (XLI), Consumer Discretionary (XLY) and Real Estate (XLRE) traded 8.27%, 3.95%, 3.60%, 1.26% and 1.16% below their averages, respectively.

Overall, the S&P 500 remains above its 200 day moving average, although the margin has narrowed further and sector trends have yet to confirm a broad based recovery. Energy, Health Care and Information Technology remain in relatively strong positions, while Financials and Consumer Staples provide additional support. Health Care and Consumer Staples trade above their averages while Utilities remain below, showing continued divergence among defensive sectors. Weakness in Industrials and Consumer Discretionary also indicates incomplete support from cyclical sectors. Investors should watch whether the index reclaims its 50 day moving average, Materials holds its 200 day average, and Communication Services, Industrials and Consumer Discretionary begin to recover. These developments will determine whether market support is becoming broader and more durable.

$美元指数(USDindex.FOREX)$ $道琼斯(.DJI)$ $道琼斯指数主连 2612(YMmain)$ $微型道琼斯指数主连 2612(MYMmain)$ $道琼斯ETF(DIA)$ $纳指100ETF(QQQ)$ $纳斯达克(.IXIC)$ $NQ100指数主连 2612(NQmain)$ $微型NQ100指数主连 2612(MNQmain)$

Valuations: Modest Rebound, While Sector Divergence Remains Pronounced

As of October 26, the latest sector valuation data show that Health Care (XLV) traded at 31.99 times earnings, the highest absolute valuation among all sectors. It was classified as elevated relative to its five year history and expensive over both the 10 year and 20 year periods. Real Estate (XLRE) ranked second at 30.59 times earnings but was classified as undervalued across the five year, 10 year and 20 year periods. Information Technology (XLK) ranked third at 30.18 times earnings. It was fairly valued over the five year and 10 year periods but remained elevated over 20 years. All three P/E ratios rose modestly from the previous week. Real Estate’s 20 year classification improved from cheap to undervalued, indicating that its historical valuation discount has narrowed. Overall, sector valuation divergence remains pronounced. Absolute P/E rankings and valuations relative to each sector’s own history reflect different factors, so neither measure alone is sufficient to establish an allocation advantage.

At the aggregate level, the latest data as of October 26 show that SPY’s P/E ratio edged down from 23.97 the previous week to 23.93. It remained fairly valued relative to its five year and 10 year history but expensive over the 20 year period. Its 10 year historical average is about 20.54, so the current multiple remains above the mean. The fair classification therefore should not be interpreted as undervaluation. The modest decline in the P/E ratio left its historical valuation classifications unchanged, indicating limited improvement and no clear valuation advantage.

$高科技指数ETF-SPDR(XLK)$ $SPDR能源指数ETF(XLE)$ $消费品指数ETF-SPDR主要消费品(XLP)$

$标普500(.SPX)$ $标普500ETF(SPY)$ $SP500指数主连 2612(ESmain)$ $微型SP500指数主连 2612(MESmain)$ $标普全球(SPGI)$ $标普500波动率指数(VIX)$

Rates: Equity Bond Yield Spread Remains Negative as Lower Long Term Rates Slightly Ease Valuation Pressure

Based on SPY’s P/E ratio of 23.93, its earnings yield is approximately 4.18%. This remains below the 5.00% yield on the 10 year US Treasury reported by the US Treasury Department on October 26. The equity bond yield spread stood at about negative 0.82 percentage points, narrowing by roughly 0.16 percentage points from negative 0.98 percentage points the previous week.

The improvement came mainly from the decline in the long term Treasury yield from 5.15% to 5.00%, while the modest drop in the P/E ratio provided only limited support to the earnings yield. Lower rates have eased some valuation pressure, although the equity earnings yield remains below the long term Treasury yield. Valuation support therefore still depends on future earnings growth. Stronger corporate earnings or a further decline in long term rates could ease the constraint, while weak earnings growth and persistently high rates would leave valuations under pressure.

@Ivan_甘灿荣: The October Curse Strikes US Stocks as Equities and Gold Show Signs of a Breakdown

We have repeatedly emphasized that October is a critical market window for US equity indexes. Regardless of the headlines, a break below key trend tracking levels should prompt investors to reduce risk first. US equities have yet to accelerate sharply lower, although other markets, including Chinese A shares, have already weakened. It remains unclear whether this reflects broader market confirmation or market specific events. With most developments currently unfavorable, adopting a temporary defensive stance is the more prudent choice.

$A50指数主连 2610(CNmain)$ $恒生指数(HSI)$ $恒生科技指数(HSTECH)$ $恒生指数主连 2610(HSImain)$ $恒生科技指数主连 2610(HTImain)$

Under my US Dollar Index cycle model, markets tend to become more volatile when the Federal Reserve enters a rate hike cycle. During transitions between rate hikes and cuts, the dollar typically experiences a sharp impulse move lasting about six months. Based on historical patterns, markets could therefore remain volatile from now through the first quarter of next year.

During a dollar tightening cycle, the best case for gold may be a period of bottoming consolidation. Gold is now trading entirely below its 20 day moving average and should not be viewed as bullish until it reclaims that level. A break below $4,000 could lead COMEX gold to test the $3,200 to $3,400 support zone.

$白银ETF-iShares(SLV)$ $白银主连 2612(SImain)$ $迷你白银主连 2612(QImain)$ $2倍做多白银ETF-ProShares(AGQ)$ $100盎司白银主连 2612(SICmain)$

Macro Strategy Summary:

The market has largely priced in no rate hike at this week’s Federal Reserve meeting. The main uncertainty will come from subsequent comments and economic data. However, equity indexes and gold remain close to key breakdown levels, so investors should continue to follow the trend.

1. The short dated sell put strategy on US equity indexes performed well last week. Higher volatility increased option premiums and improved the probability of profit. Options gained 1% last week, bringing the return over the past six months close to 30%. The strategy remains active this week, with strikes set at least 10% below last Friday’s closing level for a wider margin of safety.

2. Gold came unexpectedly close to a breakdown last week. The $4,000 level is critical support. A confirmed break could open the $3,400 to $3,600 range. Although such a breakdown may be difficult, caution remains appropriate. Selling a weekly put with a $3,600 strike appears relatively conservative.

3. Oil prices are already elevated. A squeeze could widen the three month calendar spread further, although any reversal could be rapid. Chasing prices higher is therefore not recommended.

$美国原油ETF(USO)$ $马拉松原油(MPC)$ $WTI原油主连 2612(CLmain)$ $小原油主连 2612(QMmain)$ $微型WTI原油主连 2612(MCLmain)$ $天然气主连 2612(NGmain)$ $小天然气主连 2611(QGmain)$

@程俊Dream: Brace for a Sharp US Stock Correction! Nvidia Falls for a Third Week as Bearish Pressure Builds

Despite greater stability in the bond market last week, key market bellwethers such as Bitcoin and gold showed signs of downside breakdowns. US equities also reversed sharply from their highs on the weekly chart. With oil approaching its previous peak and a critical market window drawing closer, investors should remain alert to the risk of a major correction.

$比特币(BTC.USD.HKCC)$ $比特币(BTC.USD.CC)$ $CME比特币主连 2610(BTCmain)$ $比特币ETF-iShares(IBIT)$

US equities have remained the most resilient risk asset and previously showed a clear bullish trend, but key market leaders are beginning to weaken. Nvidia has now declined for three consecutive weeks. A confirmed break below the $207 to $208 support zone could open a test of the $164 low. Several major technology companies will report earnings this week, so their results deserve close attention.

$英伟达(NVDA)$ $1.5倍做空NVDA ETF-Tradr(NVDS)$

The technical outlook for the indexes is also deteriorating. The Nasdaq’s attempted rebound last week produced only a long upper wick. The 29,000 area remains a key support platform on the daily chart. The Federal Reserve is expected to keep rates unchanged this week. If this anticipated positive catalyst fails to lift US equities after the decision, further downside would become more likely. A break below 28,816 this month would also form a bearish engulfing pattern on the monthly chart. After a similar candlestick formation in the past, US equities experienced a sustained correction lasting about a year, also during a Trump presidency.

Rising crude oil prices are another source of macro and geopolitical pressure on US equities. Market rumors suggest that the United States and Israel have developed specific plans for another round of strikes against Iran, although they reportedly do not involve a ground war. Under a hypothetical scenario in which conflict resumes, a decisive confrontation with Iran could become a major strategic objective during Trump’s term. If this scenario materializes, oil prices could return to historical highs.

$美国原油ETF(USO)$ $马拉松原油(MPC)$ $WTI原油主连 2612(CLmain)$ $小原油主连 2612(QMmain)$ $微型WTI原油主连 2612(MCLmain)$ 

Macro Strategy Summary:

For specific trades, the Ethereum short entered at 2,645 was closed in two equal portions at 2,380 and 2,500. The average profit was $205 per contract.

For US equities, place limit sell orders on the Nasdaq at 30,100 and 31,000, with a stop at 31,650 and a target at 27,250.

For the euro short, the strategy will be adjusted again this week. Place limit sell orders at 1.1340 and 1.1460, with a stop at 1.1580 and a target at 1.0900.

$A50指数主连 2610(CNmain)$ $恒生指数主连 2610(HSImain)$ $恒生科技指数主连 2610(HTImain)$ $欧元主连 2612(EURmain)$ $欧元指数(EURindex.FOREX)$ $日元主连 2612(JPYmain)$

@Owen_trading room: Risks Are Building: How to Position Without Betting on Direction or Buying the Bounce

The intensity of last week’s US equity selloff far exceeded expectations. Goldman Sachs flow data indicate that major institutions are accelerating their sales of individual stocks, with single stock exposure approaching its lowest level of the year. Goldman’s latest data also show that institutional net leverage in US equities plunged to 43.4%, leaving overall positioning near a five year low.

$标普500(.SPX)$ $标普500ETF(SPY)$ $SP500指数主连 2612(ESmain)$ $微型SP500指数主连 2612(MESmain)$ $标普500波动率指数(VIX)$

$英伟达(NVDA)$

CTAs are likely to become a major source of selling pressure this week. Goldman Sachs’ latest model estimates that systematic funds such as CTAs still hold about $38.5 billion in long S&P 500 futures positions, above the 90th percentile of historical exposure. The index has already fallen below its short term trend threshold, while the more important medium term trigger lies about 1.3% below last Friday’s close. A break below last week’s low could therefore accelerate selling:

$罗素2000指数ETF(IWM)$ $MACH7 TECHNOLOGIES LTD(M7T.AU)$ $费城半导体指数(SOX)$ $iShares费城交易所半导体ETF(SOXX)$

This week marks a heavy earnings calendar. Several major technology companies are key AI names, and their revenue results will directly shape future growth expectations and market pricing across the sector. With so many potential risks, investors may be better served by waiting for the key earnings releases before deciding how to position their portfolios.

$20+年以上美国国债ETF-iShares(TLT)$ $美国10年期国债收益率(US10Y.BOND)$ $美元指数(USDindex.FOREX)$

From a technical perspective, only one level matters: the 120 day moving average of the continuous S&P 500 futures contract. The continuous series must be back adjusted or roll adjusted to remove price distortions caused by contract changes. A confirmed break below the 120 day average would signal a breakdown from the current S&P 500 trading range and open further downside. Combined with the head and shoulders top discussed above, this would create a strongly bearish technical outlook.

Macro Strategy Summary:

The principle this week is to watch more and trade less, with capital preservation taking priority. Focus on strict strategy triggers instead of guessing the market’s direction. No deep out of the money sell put positions will be opened this week because the risk is too high. The preferred trade is higher VIX. For directional exposure, investors could wait for VIX to retreat to 16 or 14.8 before buying the dip and positioning for a rebound:

The straddle requires a clear trigger. If the back adjusted continuous S&P 500 futures contract breaks below its 120 day moving average, investors could establish a QQQ straddle by buying an at the money put and call with at least 10 days to expiry. The strategy aims to benefit from rising implied volatility following a major correction. $1.5倍做多短期期货恐慌指数ETF-Proshares(UVXY)$

Gold also offers a potential breakdown trade. It is currently close to breaking a long term technical trendline:

A confirmed breakdown could accelerate the decline, making GLD the preferred instrument for the straddle. For example, investors could buy a $365 at the money GLD put and call. The position could become profitable if GLD falls below $355 or rises above $375. The preferred entry would come after gold futures break decisively below $4,000 or rebound above their 20 day moving average. Once the market chooses a direction, the trend could accelerate.

Both the gold straddle and buying VIX on dips require strict triggers. If a larger than expected correction occurs, using a straddle to capture rising implied volatility would be much safer than taking a directional short position. Until a short term trend is confirmed, patience itself is a position.

$白银主连 2612(SImain)$ $白银ETF-iShares(SLV)$ $2倍做多白银ETF-ProShares(AGQ)$

Last Week’s Strategy Performance Update