Navigating Market Moves: Key Levels, Treasury Trade and VIX flow.
Hello everyone,
China announced tighter export controls on rare earth elements and related equipment, while President Trump stated on Truth Social that the U.S. is considering a significant tariff increase and sees no need to meet with President Xi at the upcoming summit. This combination has revived trade-war risk premia, injecting event-driven volatility into otherwise orderly technical patterns.
Equity indices weakened as traders priced in the policy overhang, though rare-earth producers outperformed due to supply-disruption narratives. We are especially looking at $USAR, $METC as some names of interest.
Policy Trajectory: China’s expanded export controls on rare earths (now covering 12 elements, with licensing extended to upstream equipment) increase compliance complexity and supply-chain risks for defense, EV, and semiconductor markets.
U.S. Stance: Potential escalation through higher tariffs and a cooling diplomatic calendar (”no meeting needed,”) has shifted market focus from earnings to geopolitics. Trump is intensifying his rhetoric against China as pressure mounts, particularly from farmers forced to halt operations after Chinese importers canceled orders. However, the real economy is softening, and polls show declining support. It seems increasingly likely that Trump may back off again, awaiting a more favorable response from Xi.
Market Analysis: Let’s examine where liquidity is hiding using our scanner. For a TACO trade, the demand zones must hold. These areas are key for market makers, who often use them to delta-hedge their positions.
QQQ $586–$583 Demand Area
SPY $651- $649 Demand Area
The VIX futures term structure is in moderate backwardation, indicating no signs of immediate panic. Despite the S&P’s pullback, the market does not anticipate extreme near-term risks. Trump’s tariffs, expected to take effect on November 1st, are driving short-term hedging, while the long-term curve reflects calm.
The options flow at the end of the day confirms this view with big premiums being sold on VIX calls along with SPX calls being bought. (source: Quant Data).
The $22 level on the VIX has proven to be a critical risk level for traders.
This week, we added $TLT to our portfolio, which was an effective hedging strategy, especially given this week’s market action. We hold 90C options for March 2026 and some shares. We believe that 20-year Treasury bond yields could continue to rise.
Heading into next week, we plan to trade the continued strength in rare earth stocks, anticipating a breakout in $MP, which recently attempted to break out from a weeks-long consolidation phase. Our setup targets a breakout above the supply level at $84.90, aiming for significantly higher prices.
Let’s see how long the tariff show will last. Meanwhile, we’ve already opened the premium plan, and we’ll start posting daily trading insights during the week, including our scanner and options flow. Our yearly special is $370, and the monthly plan is $37 for the first 100 subscribers. For those who lock in the price, we guarantee it for the entirety of this subscription.
We’re starting our daily subscription posts on Monday, October 13, 2025.
Trade Wisely,
Team at TMAD