The Gunslinger Fires TACO Number 38 And Russell Leads The Charge

The reverse TACO trade rides again. It has been a minute, but like an old-world gunslinger walking out of the sun-blistered wild west wilderness, the great orange one has shot the peace-deal bullet. Not once, not twice, not even nine times. Thirty-eight times now this gunslinger has TACO’ed the world’s financial markets and fucked around with Middle Eastern geopolitics and general war and peace mongering.

I’m fairly certain people will look back on this period, the Trump administrations and the Covid crisis bundled together, and ask what the fuck happened across this ten-year stretch. Because we are all living in it right now and saying exactly that.

Here is how it landed on my desk. Despite smashing intraday bear scalps, the TACO screwed me on the last batch and buggered my SPX and RUT day. All is not lost. My bull swing on BTC got a kick-start, my oil bears got a boost, and I was waiting on a sign to join the SPX and RUT swings, which I have now done.

Tuesday’s lows got close or peekabooed on SPX, the NazQuack and Uncle Dow. Uncle Russell completed the traditional higher low we have been banging on about, and woosh, he is leading the bull charge to new all-time highs. The cash charts do not look as impressive, because plenty of the move is happening out in extended hours. Even so, SPX is out of the grinding bottom on the TACO news, RUT with it, both nibbling at a new high through the congestion.

So will RUT carry it into the regular session? Or is reality going to kick in and the TACO trade get reversed?

PopPop

Market Briefing:

• Thursday closed up 1.75% with SPX at 7,394.30 on a suspended round of Iran strikes and a floated peace deal that Tehran has not signed. This morning the chart is reading a TACO pop, not a confirmed trend.

• Futures sit near flat to mildly green premarket, ES +0.23%, NQ +0.65%, RTY +0.85%, with much of the real move out in extended hours rather than the cash session.

• VIX has dropped to 18.54, down 4.58%, calm priced in fast off a deal that is still just a sentence.

• May CPI topped 4%, the hottest in three years, and Warsh chairs his first Fed meeting Tuesday. The tape is front-running a cut the data does not obviously support.

• SpaceX lists today as SPCX, roughly $1.78tn, the largest IPO on record, the same week chips logged their worst single day since April 2025.

• Crude slid below $90 again. The daily channel break now looks set with $65 in range.

Market Snapshot

• ES (S&P 500): 7,442.25 / +0.23% / out of the grinding bottom on TACO news, nibbling through congestion, swing now joined

• YM (Dow): 51,297 / +0.76% / Uncle Dow firm, Tuesday’s lows peekabooed and reclaimed

• NQ (Nasdaq): 29,624.00 / +0.65% / NazQuack bid back with the chip bounce, NATHs 30,807.75 still overhead

• RTY (Russell 2000): 2,946.9 / +0.85% / Uncle Russell completed the higher low and leads the charge, NATHs 2,952.0 in sight

• GC (Gold): 4,245.3 / +0.27% / holding near the highs, bid intact

• CL (Crude): 84.05 / -2.74% / oil bears boosted, daily channel break set, $65 the target

• VIX: 18.54 / -4.58% / calm restored by decree, back below 20

• BTC/USD: 63,761.00 / +0.31% / non-responsive to the headline, but %R bull extreme building

Tag ‘n Turn

The bullish read is building across the board on the TACO pop. SPX and RUT swung to the long side once the higher low completed and the swings triggered, and I am now in both. Uncle Russell is the cleanest of the lot, out front and leading.

The tension is honest. This is a TACO-driven move on a peace deal nobody has signed, and I have watched this gunslinger reverse thirty-eight times. So the read says bull, the backdrop says do not fall in love with it.

BTC is the odd one out. The headline did nothing for it, but the %R is pushing a bull extreme, which keeps it on the long watch in its own right.

SPX Analysis

SPX cash closed 7,394.30 and the 30-minute chart has worked price back up through the congestion after the BO target at 7,400 was reached. The Bull Thesis sits outside the range, the Bear Thesis inside it, and we have pushed to the upper end of the range on the TACO news.

Tuesday’s lows got peekabooed and reclaimed, which is exactly the move I wanted to see before joining the swing. Above here the Lottery line sits at 7,590.00 with NATHs at 7,620.90 overhead. Below, 7,321.47 is the level that matters, then the lower Lottery at 7,213.63.

The cash chart looks less impressive than the move feels, because so much of it happened out of regular hours. The 20-day ATR is 90.60 and the read this morning is a tape pushing the top of the range, not breaking it yet.

Tape tag: Out of the grinding bottom on the TACO news.

Gamma Exposure

GEX looks a little thin, but it is showing some positive gamma. The flip sits at 7,421.60, the call wall is stacked at 7,400, and the put wall is way out at 8,000. Price closed 7,394.30, just under the flip, which puts us in the negative-gamma zone where dealers amplify moves rather than dampen them. That fits a TACO pop that can swing hard either way.

For fun, the Barchart data points around SPX. Today’s expected move is 59.40, a 0.80% range of 7,334.90 to 7,453.70. IV is 16.20%, IV Rank 35.31% and IV Percentile 79%. The 20-day RSI reads 53.57 and the Trend Seeker shows a Soft Sell against a backdrop that is short-term weak, medium-term soft and long-term strong.

Tape tag: A little thin, but the positive gamma is there.

RUT Analysis

Uncle Russell is the star of the show. He completed the traditional higher low we have been talking about for weeks and is now out front leading the bull charge. The 30-minute chart has price up at 2,921 and pushing, with the futures at 2,946.9 sitting right under the NATHs at 2,952.0.

The Bull Thesis is outside the range, the Bear Thesis inside it, and Russell has picked the bull. The BO target at 2,810 did its job and the higher low above 2,730 held cleanly. The only question left is whether he carries this into the regular cash session, or hands it back if reality reasserts.

Tape tag: Woosh, leading the bull charge to new all-time highs.

CL Analysis

Crude, how rude of you not to move sooner. The bear flag I was monitoring as it evolved is a good example of why naming something while it is still developing misses the point. The single most important thing is not the name but what the overall context is telling you. We only get to name these things afterwards.

So you can call it a bear flag, or you can look at it as a head-and-shoulders type of pattern.

Now the larger channel breakdown on the daily looks set, and a target towards $65 is achievable. Price is 83.92 on the day, the channel top is up at 113.48, and I am only interested in bulls above $97.

Tape tag: The larger channel breakdown looks set, $65 achievable.

BTC Analysis

BTC is non-responsive to the news, which tells you something in itself. The bull swing got its kick-start, and I do see the %R bull extreme developing, which could point to further upside if we remain inside the extreme.

Last time we saw this, back at the May 25 level, we entered and exited quite quickly before prices dropped, so this is not a free pass. Staying in that top 20% zone could pre-emptively suggest the bull triggers get dinged and the first of the bear VWAPs get reclaimed for a bull move.

Price is 63,729 on the four-hour, the upper sits at 64,234.45, and the triangle marks 58,500 as the potential cyclical bull turning point.

Tape tag: Further upside if we remain inside the extreme

Rounding Off

SpaceX lists into a chip panic. SPCX comes to the Nasdaq today around $135, raising roughly $75bn at a valuation near $1.78tn, the largest IPO on record. It arrives the same week chip stocks logged their worst single day since April 2025, then bounced hard the next session, Micron up almost 12%, SanDisk 14% and Intel 10% on an upgrade. The chip tape is the one to watch under the NazQuack read this morning.

The Fed walks into a 4-handle. May CPI topped 4%, the hottest in three years, with wholesale prices running 6.5% annually. Warsh chairs his first meeting Tuesday, hired to cut and staring at inflation that does not want him to. For the chart, that is Tuesday’s problem. This morning the tape is trading the TACO, not the data.

Expert Insights

All models are wrong, but some are useful. The statistician George Box meant it about equations, but it lands just as hard on a chart. Today’s lesson from crude is exactly this. I called it a bear flag while it formed, and it could equally be read as a head and shoulders. The label was incomplete, and it did not matter, because the context told me to stay bearish and the context paid.

The same humility applies to this TACO rally. The read says bull, the move is real, but the gunslinger has reversed thirty-eight times. Hold the view loosely. Trade the evidence, not the name.

[George Box – widely attributed, public domain]

Trade well,
T2 Markets

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