By Brad Hoppmann

Monday was the market catching its breath after Friday's rotation.

Tech bounced. The Nasdaq rose 1.11% to 26,431 and the S&P 500 gained 0.41% to 7,691, while the Dow slipped 0.07%, per TheStreet. Amazon jumped 4.95% and Micron rose about 3%. That's the bounce Friday's posture of 6 was warning about. A reading that deep is oversold, and oversold things snap back.

But look at what the bounce did and didn't do. The Nasdaq's CCI climbed from -203 to -135. That's higher than Friday, so the thread moved from red to yellow. It's still far below its 14-day average of 26, so it isn't green. Posture 14. The S&P 500 did the same thing, CCI -89 to -54, yellow, posture 33. One good day off the floor is a bounce. A trend needs the average to come along.

The dollar took back its ground. UUP rose 0.28% to $29.00, 13 cents under its October 12 closing high of $29.13. That puts it at 95.1% of its 52-week range and drops the Score from 8 to 5, back into Ludicrous Headwind. Its thread went from red to yellow, with the CCI rising from 26 to 41. It's still far under its 14-day average of 97, so this isn't a confirmed turn back up. It's a dollar that stopped falling for a day.

Crude sent a mixed signal. TheStreet had WTI up more than 2% near $103.73 in afternoon trading after reports of Houthi attacks on Saudi oil and airport targets (medium confidence on the intraday print). USO, the board's proxy, still closed down 0.59% at $160.81. A fund that holds futures doesn't always match the headline contract day to day, so read the thread, not the headline. Crude's CCI eased from 217 to 185. That's still far above its average of 22, with posture 92, but it's lower than Friday. The four-day green streak ends, and crude goes yellow. An extended trend taking a breath isn't a broken one.

Gold lost its green too. GLD fell 0.61% to $379.69 and its CCI slipped from -20 to -46. That's still well above its 14-day average of -82, so it's yellow, not red. Silver edged up 0.06% and stays yellow.

The green came from the quiet corner. Palladium rose 0.35% and turned green, with its CCI rising from -85 to -79, above its average of -120. Platinum gained 0.47% and stayed green for a second day, CCI -103 to -85. Both are still deep below zero, so this is a turn up from low levels, early and small. But they're the only two names on the board where today beat yesterday and beat the two-week average at the same time.

On the red side, copper rose 0.18% and still printed red. Its CCI fell from -72 to -81, below both the prior day and its average of -15. Nat gas fell 1.88% and stays red for a second day. Corn dropped 0.99% and soybeans 0.37%, both yellow at postures of 14 and 9.

That's two greens, two reds, and eight yellows. The Turtle Traders had a rule for days like this: a bounce isn't a breakout, and a pause isn't a reversal. Yellow means hold what's working and don't add to what isn't. Eight yellows says most of this board is waiting for something. The calendar says that something is eight days away.

The Treasury curve at Monday's close, per the Treasury's daily curve via FMP: 1-month bills at 4.11%, the 2-year at 4.77%, the 10-year at 5.15%, and the 30-year at 5.48%.

Yields climbed back. The 2-year rose 3 basis points, the 10-year 6, and the 30-year 5. That gives back part of last week's rally in bonds. The 2-year to 10-year spread widened to 38 basis points. Housing felt it: homebuilder sentiment fell to 29, its lowest since June 2012, per TheStreet.

Michael J. Howell of CrossBorder Capital, author of Capital Wars, makes a point that fits a day like this. In his view, what moves markets isn't the price of money so much as whether there's room to borrow, because most of the financial system's job is rolling over old debt. A 10-year back above 5.1% makes that refinancing harder. Howell's own call is that global liquidity is rolling over into 2027 (his projection, not settled fact), which is one reason a stubborn dollar and rising long yields can travel together for a while.

The Dollar Event is still the FOMC meeting on October 27 and 28, with the decision Wednesday the 28th at 2:00 PM Eastern. Before then, earnings season gets loud: Netflix and GE Aerospace report Tuesday, and Tesla, Meta, IBM and Texas Instruments Wednesday, per TheStreet. A Fed that holds with oil above $100 would be a soft-dollar setup. A surprise hike would test the dollar near its high.

There's no new CFTC Commitment of Traders data until Friday, October 23. The latest report covers the week ended Tuesday, October 13.

That report showed large speculators 62.36% net long dollar index futures at 12,919 contracts, up from 12,011 the week before. The crowd was still buying near the top. In gold futures, speculators were 86.76% net long at 207,879 contracts, trimming for at least a fourth straight report.

Monday shifted the tell. Last week the setup was a red dollar thread against a green gold thread. Now both are yellow. The dollar stopped falling and gold stopped rising, so the crowded dollar longs aren't being pushed out yet. Friday's report, covering the week through October 20, will show whether speculators kept adding to the dollar or started to back off as it slipped from its high. If they backed off and the dollar's thread turns red again, that's the cleaner setup.

Fifteen high school marching bands played the same stadium this past weekend, at the Florida Bandmasters Association District 10 Marching MPA, hosted at Space Coast Jr./Sr. High out in Port St. John, per Space Coast Daily.

Here's what folks who never marched in one don't know about an MPA. It isn't a contest. Nobody wins. Each band gets judged against a standard, not against the band that played before it. Superior, Excellent, Good, on down the line. Fifteen bands can all walk out with a Superior, or none of them can.

So the loudest band doesn't take it. The band with the biggest brass line and the most fireworks in the closer can still walk home with an Excellent, because the judges were listening for whether it held together from the first note to the last. Anybody who sat in the bleachers on a Friday night in North Brevard knows the difference between loud and good.

That's how this board works. Every instrument gets graded against its own standard: is it better than yesterday, and better than its own two-week average? Monday the Nasdaq played the loudest show in the stadium, up 1.1%. It got an Excellent. Platinum and palladium played quiet and small, and they're the two that hit the standard.

Coke-TV runs Monday as "tech roars back." Pepsi-TV runs it as "oil jumps on Houthi attacks." Neither one mentions fifteen bands in Port St. John who already know a standing ovation and a Superior aren't the same thing.

Two greens, two reds, eight yellows, and a dollar that took back its ground. Don't mistake a bounce for a trend, and keep your eyes on the 28th. - Brad

Data sources: ETF-proxy closes for the board and the dollar, native index levels for Nasdaq and the S&P 500, Treasury curve and CFTC Commitment of Traders data via Financial Modeling Prep. Market color, oil, and earnings calendar per TheStreet. Marching MPA per Space Coast Daily. Liquidity framework per Michael J. Howell, Capital Wars (Palgrave Macmillan, 2020). Supercycle Score is the inverse of the US dollar's trailing 52-week closing range (UUP). Hero photo: Unsplash, from the Supercycle Trader media library.

This newsletter is for informational purposes only and does not constitute investment advice. Do your own research and consult a licensed financial professional before making any investment decision.