To The Moon

Last night, I hosted a livestream on Tiger Futures to discuss shifts in the broader U.S. stock market. I covered the U.S. Dollar Index, including its historical patterns and outlook, and shared trading strategies for currencies, crude oil, and gold. If you missed the session, watch the replay here >>

美股指新一輪的上升浪終於開始了？標普的反彈目標位會達到多少？

Below, I have summarized the key market insights and trading views by topic, so those who missed the session can quickly understand my current outlook. First, a brief introduction:

Cheng Jun is a professional trader and guest lecturer at CME Group. He previously served as General Manager of Gold Headlines and Content Director at Wallstreetcn, Executive Managing Editor at Huizhong Information, and Investment Director at Xiamen Kuyin.

He entered the financial markets in 2007 and has nearly 20 years of hands-on margin trading experience. His research covers foreign exchange, gold, and U.S. equity indices, supported by a strong grasp of fundamental market drivers. Years of financial content experience have sharpened his insight into investor sentiment, while extensive trading experience has built a solid foundation in technical analysis. He was among the first in China to study and promote Tom DeMark indicators and successfully captured the EUR/USD reversal triggered by the first round of U.S. quantitative easing.

For many years, he regularly provided market commentary and trend analysis to CCTV’s Securities Channel, Guangdong Radio’s Finance Channel, and LeTV Finance. He has also written commentary for NetEase Precious Metals and Sina Finance. He currently contributes columns to leading brokers serving Hong Kong and U.S. equity investors and publishes macroeconomic and market analysis videos on YouTube and other platforms.

My Core Views from This Session:

October Global Asset Outlook and Q4 Investment Strategy

💡 Key Views:

- The market has fully priced in the Fed’s rate hike path, so it is no longer a major risk.

- The current rebound in risk assets is likely the final leg of this phase. Stay alert to a potential market reversal in Q4.

- Wait for a breakout of key levels to confirm direction. For now, avoid countertrend trades and medium- to long-term positions.

$標普500(.SPX)$ $標普500ETF(SPY)$ $SP500指數主連 2612(ESmain)$ $微型SP500指數主連 2612(MESmain)$ $標普500波動率指數(VIX)$

Overall Market Tone and Rate Hike Outlook

Core Market Views

• Impact of Rate Hikes: The Fed’s rate hike path is fully priced in, with little room for further tightening. It is unlikely to trigger a market collapse.

• Q4 Market Outlook: Avoid excessive optimism. Risk assets are likely in the final phase of a temporary rebound, so buying near the highs could leave investors underwater for an extended period.

$道瓊斯(.DJI)$ $道瓊斯指數主連 2612(YMmain)$ $微型道瓊斯指數主連 2612(MYMmain)$ $道瓊斯ETF(DIA)$ $房地產指數ETF-iShares道瓊斯(IYR)$

Fed Rate Hike Timeline

• October Meeting: The FOMC is expected to hold rates steady on October 26.

• Next Rate Hike: The Fed is expected to raise rates by 25 basis points in December, then pause or end the tightening cycle to limit further market pressure.

Current Market Divide and Key Asset Signals

• Bullish and Bearish Signals: Signals across major assets remain mixed, reflecting sharp market disagreement. The market may consolidate for one to two weeks. Wait for a confirmed breakout before trading with the trend.

Signals Across Major Assets

· U.S. Treasuries: The 10-year Treasury yield has declined in the near term as selling pressure eased. However, Treasuries remain under pressure over the medium to long term, while the broader uptrend in yields remains intact.

$iShares 20+ Year Treasury Bond ETF(TLT)$ $iShares 7-10 Year Treasury Bond ETF(IEF)$ $Ultra 10-YR NOTE - main 2612(TNmain)$ $10-YR T-NOTE - main 2612(ZNmain)$ $2-YR T-NOTE - main 2612(ZTmain)$

• U.S. Equities: Upward momentum in the Nasdaq and stocks such as Nvidia has weakened significantly, while daily charts show trend reversal warnings. Support remains near 29,000, so caution is warranted at elevated levels.

$羅素2000指數ETF(IWM)$ $微型羅素2000指數主連 2612(MRTYmain)$ $羅素2000指數主連 2612(RTYmain)$

• Other Assets: Crude oil faces stronger resistance to further gains, while the dollar is undergoing a temporary pullback. Bitcoin remains relatively strong, while gold continues to trade near its lows. Performance across asset classes remains divided.

$WTI原油主連 2612(CLmain)$ $微型WTI原油主連 2612(MCLmain)$ $美國原油ETF(USO)$

Key Changes in the FX Market

U.S. Dollar Outlook

• Policy Rationale: To avoid an unacceptable simultaneous selloff in U.S. Treasuries, equities, and the dollar, the U.S. is expected to maintain its strong-dollar policy.

• Market Outlook: The U.S. Dollar Index is expected to test monthly resistance near 106, leaving room for a meaningful rally.

$歐元主連 2612(EURmain)$ $歐元指數(EURindex.FOREX)$ $日元主連 2612(JPYmain)$ $日元ETF-CurrencyShares(FXY)$

Major Non-Dollar Currencies

• Euro Strategy: The euro is forming a head-and-shoulders top and is likely to fall toward 1.08 to 1.09. Shorting the euro is the core Q4 strategy.

• Japanese Yen Outlook: The U.S. is expected to prevent excessive yen depreciation, so USD/JPY is unlikely to repeat its strong first-half rally. Once the rebound stalls, the pair should offer an attractive short opportunity.

FX Market Impact

• Pressure on Risk Assets: A temporary rebound in the dollar could weigh on commodities and risk assets. The market continues to recognize the dollar’s safe-haven appeal.

• Trading Considerations: Volatility is likely to rise sharply once key levels break. Avoid countertrend trades without clear confirmation.

Crypto Assets as a Market Signal

• Leading Indicator: Crypto assets often lead other risk assets by one to two months, making them a key indicator of broader market direction.

$比特幣(BTC.USD.HKCC)$ $比特幣(BTC.USD.CC)$ $CME比特幣主連 2610(BTCmain)$ $比特幣ETF-iShares(IBIT)$ $2倍做空比特幣期貨ETF-Proshares(SBIT)$

Key Levels

• Bullish Signal: A Bitcoin breakout above 88,000 would be positive and could open another 10% to 20% upside. This may also trigger a rebound across other risk assets.

• Bearish Signal: A Bitcoin break below 80,000 or even 76,000, combined with Ethereum falling below 2,300, would signal the end of the current crypto rebound and increase downside pressure on other risk assets.

Trading Outlook and Strategy

Medium and Long Term Trading

• Long Positions: Wait for the U.S. Dollar Index to pull back toward 100 to 101 before going long. Continue to wait for an attractive entry point in crude oil.$美元指數(USDindex.FOREX)$ $美元樹公司(DLTR)$ $黃金主連 2612(GCmain)$ $微黃金主連 2612(MGCmain)$ $1盎司黃金主連 2612(1OZmain)$ $白銀主連 2612(SImain)$ $迷你白銀主連 2612(QImain)$ $白銀ETF-iShares(SLV)$ $2倍做多白銀ETF-ProShares(AGQ)$

• Short Positions: Sell precious metals and crypto assets into strength once their rebounds lose momentum. Gold currently faces strong downside pressure, so focus on short opportunities at higher levels.

Short Term Trading

• Rangebound Markets: Near-term price potential remains limited and volatility is low. Stay on the sidelines until signals across major assets align, then trade with the trend.

• U.S. Equity Strategy: The Nasdaq remains rangebound, so use strict stops to manage sudden breakout risk. Avoid chasing the market at elevated levels in Q4 and stay alert to a potential correction.

• Current Orders: Pending orders include a short position in the euro and a long position in crude oil. Partial profits have already been taken on the previous Ethereum short. I will continue tracking the market and share strategy updates in my weekly articles once orders are filled.