To The Moon

Our two prior key calls now appear to have largely played out:
First, the pullback in U.S. equities from elevated levels would likely remain within an 8% range; second, crude oil had most likely topped, with WTI futures expected to retest the $65 level in the near term.

Review：Oil Plunges, Undercurrents Thrive? June 19 Deal Could Flip — Option Strategy to Capture Time Value

Red Alert! The Dollar Just Broke Out—How to Bulletproof Your Stock Portfolio Now！

Many market participants have attributed last night’s strong rebound in U.S. equities to Micron’s better-than-expected earnings. However, it is important to recognize that Micron’s results merely acted as a catalyst for sentiment. The underlying driver of the rebound is more likely the sharp two-day decline in the U.S. 2-year Treasury yield, which has eased the suppressive effect of elevated rate expectations on equity valuations.

$Micron Technology(MU)$ $S&P 500(.SPX)$ $E-mini S&P 500 - main 2609(ESmain)$ $SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ(QQQ)$ $NASDAQ 100(NDX)$ $NASDAQ(.IXIC)$ $E-mini Nasdaq 100 - main 2609(NQmain)$ $Micro E-Mini Nasdaq 100 - main 2609(MNQmain)$ $Dow Jones(.DJI)$ $E-mini Dow Jones - main 2609(YMmain)$ $Micro E-mini Dow Jones - main 2609(MYMmain)$

This leads to a key question: why did the U.S. 2-year Treasury yield fall so sharply over consecutive days? The answer likely lies in the crude oil market.

Let me reiterate my core view on the current cross-asset landscape: the upward trend in U.S. equities is unlikely to be easily reversed. The preferred strategy remains selling put options at sufficiently low strike levels. For details, please refer to my previous report: Red Alert! The Dollar Just Broke Out—How to Bulletproof Your Stock Portfolio Now！

$Invesco QQQ(QQQ)$ $NASDAQ(.IXIC)$ $E-mini Nasdaq 100 - main 2609(NQmain)$ $United States Oil Fund LP(USO)$ $WTI Crude Oil - main 2608(CLmain)$

At the same time, the sharp decline in crude oil has opened up greater room for downside in inflation expectations. Regardless of how inflation evolves, gold is likely to find a bottom at lower levels and rebound thereafter. In the short term, however, gold’s downtrend is not yet over. The U.S. dollar index still has upside momentum, driven by rate hike expectations. That said, such impulse-driven dollar strength is unlikely to persist for long, suggesting that gold’s bottom may not be far away.

Oil Peak and Equity Rebound

As anticipated, crude oil prices have declined sharply and decisively broken below key support levels. At current levels, WTI is not far from retesting the previous support zone around $65 — effectively “one more leg down.”

This decline carries significant macro implications. Energy prices are a core component of U.S. inflation expectations. A sharp drop in oil implies substantial room for inflation expectations to fall, which directly explains the recent decline in 2-year Treasury yields. The market’s pricing of short-term yields — reflecting expectations for persistent inflation and rate hikes — may have overshot. As inflation expectations cool, the restraining effect of high rates on equities naturally weakens.

This is why I continue to emphasize that the current pullback in U.S. equities is fundamentally a liquidity-driven correction rather than a structural top or a market crash. It reflects insufficient buying momentum at elevated levels. Once prices fall to sufficiently attractive levels, buying interest will re-emerge and push indices higher. Historically, U.S. equities tend to perform relatively well during the summer months (June through August). Therefore, while a short-term drawdown of 7–8% remains possible, the medium- to long-term trend remains upward.

Selling Puts at Lower Levels Remains Preferred

In this volatile environment, my previously established strategies — selling low-strike puts on Micron, the S&P 500, and Nvidia, as well as selling high-strike calls on crude oil or USO — have already generated meaningful profits.

From a technical perspective, my model suggests that S&P futures are unlikely to break below previous lows. However, if a breakdown occurs, the next support level lies around 7016. Futures trading offers clear stop-loss and take-profit levels, making it suitable for disciplined, rule-based execution in volatile conditions: cut losses decisively upon a breakdown.

Gold’s “Final Leg Down”: Waiting for Dollar Momentum to Exhaust

Turning to gold, my clear recommendation is: do not rush to bottom-fish — exercise patience.

$Gold - main 2608(GCmain)$ $E-Micro Gold - main 2608(MGCmain)$ $SPDR Gold ETF(GLD)$ $Silver - main 2607(SImain)$ $E-mini Silver - main 2607(QImain)$ $iShares Silver Trust(SLV)$

Gold currently exhibits a strong inverse correlation with the U.S. dollar index.

The risk of further upside in the dollar remains elevated, particularly around the 100-week moving average, which serves as a critical technical threshold. While rate hike expectations may not persist indefinitely, the current impulse-driven rally in the dollar may not yet be complete. This dollar strength could trigger a “final leg down” in gold before a durable bottom forms.

Gold is likely to establish a solid base within the 3800–4000 range. Investors who are not time-constrained may consider waiting until the dollar’s momentum fades before entering long positions at lower levels.

Why am I confident in gold’s eventual bottoming? Because its underlying drivers support recovery under multiple macro scenarios:

• If inflation expectations rise: gold, as an inflation hedge, is likely to attract buying after a decline and initiate a new upward cycle. Historical parallels, such as the 1967–1983 inflationary period, show strong alignment with current trends.

• If inflation expectations fall: this implies sustained weakness in oil prices, leading to declines in both Treasury yields and the U.S. dollar. Given the strong negative correlation between gold and the dollar, a weaker dollar would also support a rebound in gold.

Therefore, attention should be focused on whether gold futures can form a base in the 3800–4000 range. The downside target for this correction is likely near 3800. Investors seeking to buy the dip should wait patiently for the current dollar rally to conclude.

$Cboe Volatility Index(VIX)$ $ProShares Ultra VIX Short-Term Futures ETF(UVXY)$ $1-Ounce Gold - main 2608(1OZmain)$