Weekly Macro Brief
The market spent most of the week doing what it has done all month. Waiting on Iran.
The week opened soft. The S&P dropped 0.63% Tuesday as ceasefire expiration fears hit the tape, with the Dow shedding 293 points. Oil was climbing back toward $90. The Fed chair situation added fuel. Kevin Warsh's confirmation hearing Tuesday delivered a hawkish surprise. He said inflation is “a choice,” made clear he is not a White House puppet on rates, and the market repriced 2026 cut odds from 50% down to roughly 40% in the same session. Higher oil plus a more hawkish Fed in the same afternoon. The market didn't like it.
Wednesday flipped. Trump extended the ceasefire indefinitely. S&P hit a new record, Nasdaq climbed 1.6% to an all-time high. Tesla beat on revenue and earnings after the bell, gross margins came in well above estimates, and Robotaxi expansion into Dallas and Houston kept the growth narrative intact.
Friday was the cleanest session. Intel reported blowout earnings and surged to all-time highs, clearing its dot-com era record. Data center and AI revenue up 22% year over year. AMD followed and jumped 13%. Nvidia crossed the $5 trillion market cap threshold again.
The underlying tone is bullish but not clean. The S&P's forward P/E sits at 20.9x, 28% above its 25-year average. Companies are beating estimates but withholding guidance upgrades. The language keeps showing up: “macro uncertainty” tied to Iran energy costs. The beats are real. The confidence is not fully there yet.
Worth Watching
Consumer sentiment hit a record low in April. The University of Michigan reading came in at 49.8, down 6.6% from last month. Markets are grinding to all-time highs. Main Street is not feeling it. That disconnect does not usually persist indefinitely.
The CFTC Commitments of Traders report shows futures positioning as of the prior Tuesday, released every Friday at 3:30 PM ET. This is a sentiment read, not a trade signal. Data below is for DJIA futures (the full-size Dow contract, the direct institutional equivalent of MYM).
What This Means This Week
Hedge funds are net short 9,984 Dow contracts and added 2,190 net new short positions this week alone. Retail and institutions are both net long. That is a clean split. Hedge funds positioned against the retail direction heading into one of the heaviest earnings weeks of the year. Worth watching whether those shorts get squeezed on strong Big Tech prints or get validated if guidance disappoints.
Prime Brokerage Read
Goldman Sachs prime brokerage data for the week ending April 25 showed hedge fund net equity exposure at its lowest level in seven months. Funds have been cutting gross leverage across both long and short books. The Dow and financials saw the largest net selling. That lines up directly with the COT read: institutional shorts are not just a futures play. The equity book is being reduced at the same time. Two data sources, same message.
Source: CFTC.gov. Data as of prior Tuesday. Released Friday 3:30 PM ET. Four-day lag applies. Prime brokerage data via Goldman Sachs Hedge Fund Monitor, reported by Bloomberg. COT is a sentiment context tool, not a trade signal.
Options dealers are required to hedge their exposure as price moves. The size and direction of that hedging obligation creates mechanical support and resistance levels that are independent of fundamentals. This section tracks the key levels for the Dow each week.
What This Means This Week
The Dow enters this week in positive gamma territory with DIA trading at approximately $492. Dealers are in stabilizing mode: buying dips and selling into strength. That is the mechanical explanation for the slow, choppy price action the Dow has produced all month while the Nasdaq was making new highs. The put wall at DIA $480 (Dow ~48,000) is structural support. A pullback into that zone should bring dealer buying on the tape, which is a TREPP-friendly environment. A clean M5 crossover with an M1 retest near $480 carries structural dealer support behind it. The call wall at DIA $500 (Dow ~50,000) is the ceiling. That level is both a gamma wall and a massive psychological round number. Dealers are obligated sellers into that level. Expect price to slow or stall as it approaches. The zone between $484 and $500 is where positive gamma compresses movement. Slow, orderly price action inside that range is expected. Below $484, the environment flips. Dips accelerate and stops get run.
Source: FlashAlpha / SpotGamma. DIA levels estimated from broad market gamma data as of Friday April 25 close. For MYM, multiply DIA level by 100 to get the Dow point equivalent. Use as structural context, not a trade signal.
VIX measures implied volatility on the S&P 500. VXN measures the Nasdaq. VXD measures the Dow and is the most direct read for MYM traders. Under 15 = compressed, low fear. 15-20 = normal. 20-30 = elevated caution. Over 30 = fear or crisis mode. Elevated volatility widens spreads and increases intraday range. Use as a session awareness tool.
This is the heaviest week of earnings season. The biggest names on the board.
Wednesday: Alphabet and Meta. Thursday: Apple, Amazon, Microsoft, and Qualcomm. Friday: Exxon and Chevron. These are not just individual stock events. When the Mag Seven reports in the same week, the results reset the narrative for the whole market. A strong week here validates the rally. A weak week with cautious guidance puts everything back up for debate.
Thursday 8:30 AM ET is the macro wildcard. GDP first release for Q1, Employment Cost Index, Initial Claims, and PCE deflator all hitting at the same time. The Atlanta Fed GDPNow estimate going into the week is tracking Q1 growth at just 1.2%. If the official number confirms that softness alongside a hot PCE, the Fed is in a box and the market will price that in fast.
Earlier in the week Coca-Cola, UPS, GM, and Visa report Tuesday. These are consumer and logistics reads. Good leading indicators of whether spending is holding up or if the sentiment weakness is starting to show in real numbers.
The Short Version
Big Tech earnings Wednesday through Thursday set the tone for May. GDP Thursday morning is the wildcard. If both land well, the rally has legs. If guidance disappoints or GDP confirms a slowdown, expect the market to get defensive fast. Watch the 10-year yield. Still up over 20 basis points since the conflict began.
This is a week I am going to treat carefully. A lot of big numbers hitting in a short window and the Dow has been the weakest index all month. That is where MYM lives. I am not chasing longs into Thursday morning before GDP prints. If the number disappoints the move down will be fast and the people who were long into it will be the ones funding it.
My bias coming in is neutral with a lean toward cautious until Wednesday's close tells me something. If Meta and Alphabet both beat and raise guidance, that changes my read for the back half of the week. If they beat and stay quiet on guidance like everyone else has, I am staying patient.
The setup I am watching for most this week is a clean pullback into a key level on MYM after one of the big prints. Those post-data retracements are where TREPP does its best work. High conviction entry, defined risk, clear target. Not trying to catch the initial spike either direction.
JT Smith
Founder | Steady Edge Trading
steadyedgetrading.com
This Week's Question
Hedge funds are net short 9,984 Dow contracts heading into the biggest earnings week of the year. Wrong side or right call?
Drop your read in the Discord. Curious where the community lands on this one.
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