Brad Horn

Saffron Capital. Tactical asset allocations. Risk managed portfolios. Market reports daily prior to open.

[Brad Horn @bxhorn]

Thank you for reading and following my work.

Saffron Capital Risk Disclosure
Futures market analysis is presented to assess the market risk regime, to manage capital in the underlying cash markets, and to price capital preservation strategies. The ‘View from the Trenches’ post contains opinions only and are subject to change without notice. The content provided is for marketing purposes and is not legal, tax, or investment advice. Trade advice should not be pursued if it fails to address your personal financial situation, investment goals, and risk tolerance. Saffron Capital accepts no liability for any use that may be made of these comments or for any consequences that arise. Investing involves risk. The risk of loss from trading futures contracts can be substantial. For this reason, the trading of futures (or options on futures) is not suitable for most investors. Under US regulations, market access is limited to accredited investors only.

[Brad Horn @bxhorn]

#Macro - View from the Trenches 🧵
Markets continue to trade the gap between slowing economic momentum and stubborn inflation expectations. Monday’s ISM Services report remained comfortably in expansion at 54.0, but the details were mixed. New orders and prices paid eased while employment improved, reinforcing the view that growth is moderating rather than collapsing. That combination leaves the Federal Reserve with flexibility but does not yet eliminate the possibility of another rate hike. The bond market continues to assign the highest probability to the Fed holding rates constant, that rate cut hopes faded overnight as yields rose. The market's attention now shifts toward Wednesday's FOMC minutes, ADP employment, the U.S. trade balance and Treasury auctions. Those releases will determine whether the recent repricing toward "higher for longer" continues or begins to reverse. Across asset classes the message remains remarkably consistent. In summary, the macro backdrop remains constructive for risk assets. Bias: Favor stocks over bonds, remain patient on the Dollar, and let price (not positioning) confirm the next directional trade ... 1/4

[Brad Horn @bxhorn]

$DXY - Dollar Bulls Are All In
The Dollar remains the market's most interesting macro trade because positioning and price are telling slightly different stories. Hedge funds have accumulated the largest bullish Dollar position in a decade while leveraged funds simultaneously hold a record short position in SOFR futures, reflecting a strong consensus that U.S. policy rates will remain higher for longer. Yet despite this aggressive positioning, DXY has been unable to produce a convincing breakout above 101.00. Cash foreign-exchange markets continue to support the Dollar through wide interest-rate differentials. The yen remains near multi-decade lows as Japanese yields fail to keep pace with U.S. rates, while speculative EUR selling has become the primary source of Dollar demand. However, Dollar futures have paused immediately beneath major technical resistance, suggesting buyers are becoming more selective. Overnight weakness has left the Dollar below the weekly pivot price of 100.75, which is also the 5D MA. A break of support at 100.56 projects to support at 100.15 as heavy positioning raises the probability of sharp profit-taking if upcoming economic data disappoints ... 4/4

[Brad Horn @bxhorn]

@dailychartbook Fed rate hike probability is falling. Higher-for-longer is becoming talk-for-longer

[Brad Horn @bxhorn]

$SPX - Price says risk-on. Breadth says not so fast. SPX gained 0.87%, yet more stocks fell than rose (279 vs. 220). Mega-cap leadership shifted the cap-weighted return distribution to the right while the average stock lagged. The index climbed, but the average stock didn't. #SPX #MarketBreadth #Stocks

[Brad Horn @bxhorn]

#Silver - Return history

[Brad Horn @bxhorn]

Thank you for reading and following my work. For email delivery, subscribe on Substack or DM.

Saffron Capital Risk Disclosure:
Futures market analysis is presented to assess the market risk regime, to manage capital in the underlying cash markets, and to price capital preservation strategies. The ‘View from the Trenches’ post contains opinions only and are subject to change without notice. The content provided is for marketing purposes and is not legal, tax, or investment advice. Trade advice should not be pursued if it fails to address your personal financial situation, investment goals, and risk tolerance. Saffron Capital accepts no liability for any use that may be made of these comments or for any consequences that arise. Investing involves risk. The risk of loss from trading futures contracts can be substantial. For this reason, the trading of futures (or options on futures) is not suitable for most investors. Under US regulations, market access is limited to accredited investors only.

[Brad Horn @bxhorn]

#Macro - View from the Trenches 🧵
The market enters the week with a new question. The June employment report reduced immediate slowdown concerns, but it did not eliminate inflation risk. Falling energy prices, improving European inflation data, and the continued normalization of shipping through the Strait of Hormuz all argue for additional disinflation over the next several months. At the same time, the ISM Services report and Wednesday's FOMC minutes now become the next catalysts after a holiday-shortened week. Evidence suggests the global economy continues to expand rather than contract, while geopolitical risk premiums continue to unwind. Markets have begun pricing a less urgent path for additional Fed tightening following the softer labor report. However, Treasury yields remain elevated enough to keep financial conditions restrictive. That disconnect defines the market stalemate. Cash markets are responding to improving inflation trends, while futures continue to assign meaningful probability that the Fed maintains a hawkish posture through communication rather than action. In other words, the Fed may not need another rate hike if it successfully convinces markets that rates will remain higher for longer. Trade bias: Maintain a modest risk-on tilt toward equities while recognizing that stronger growth can become bearish if it forces higher real rates. Maintain a cautious bearish bias toward Treasuries until yields confirm a durable peak. Remain neutral on the Dollar pending confirmation from rates and Wednesday's FOMC minutes. Capital preservation remains more important than forcing new positions ahead of the week's primary catalysts ... 1/4

[Brad Horn @bxhorn]

Dollar – Wait for the Next Fed Signal
The Dollar enters the week attempting to stabilize after surrendering part of its post-FOMC advance. The softer employment report reduced expectations for another near-term rate hike, but it did not trigger a broad Dollar reversal because long-term Treasury yields remain relatively firm. Cash foreign-exchange markets continue reflecting modest U.S. rate support, while Dollar futures have become increasingly sensitive to incoming economic data. The market now seeks confirmation that slowing inflation will outweigh relatively stronger U.S. growth.

Technically, Dollar Index futures continue holding above both the 18-day and 50-day moving averages near 100.6 while consolidating immediately beneath resistance around 100.85-101.00. Momentum has improved from oversold readings, but neither daily nor four-hour charts confirm a durable breakout. The cash market still favors the Dollar against the yen as policy divergence persists, while futures traders remain reluctant to extend long positions before Wednesday's FOMC minutes. That divergence argues for patience rather than conviction.

The highest probability trade is neutrality. A sustained move above 101.00 would shift the tactical bias back toward Dollar strength, justify new longs, and increase pressure on commodities and international equities. Conversely, a break below 100.50 would suggest the post-payroll correction is evolving into a broader Dollar decline, invalidating our long bias. Until one of those levels fails, capital preservation remains the preferred strategy ... 4/4

[Brad Horn @bxhorn]

@milkroaddaily Extend FICA elegibility to the emerging legions of robots everywhere.

[Brad Horn @bxhorn]

#Liberty - The forever salute

#IndependenceDay #CCP #CHINA #Tianamen

[Brad Horn @bxhorn]

@TimmerFidelity Wow

[Brad Horn @bxhorn]

$SPX - The Index Fell. The Market Didn't.
The S&P 500 fell -0.13%, but the internals told a different story. Over 70% of index constituents (356/502) finished higher, and the average stock gained +0.81%.
Today's weakness was concentrated in mega-cap tech, while leadership sits with the broader market. The divergence confirms rebalancing and a bullish rotation beneath the surface.
#SPX #PriceAction #StockMarket