The Market Breathes: Equities Rise and Volatility Subsides

The Market Breathes: Equities Rise and Volatility Subsides The third week of January 2025 has been defined by a revitalized market sentiment. Equities rallied strongly, while volatility, as reflected by the VIX, plummeted over 14%. The TTU Trend Barometer remained steady at a robust 66%, underscoring a favorable environment for trend-followers. However, the SG Trend Index posted a modest +0.08% MTD and YTD, suggesting that not all systematic strategies have capitalized on the emerging trends amidst transitional market conditions. Key Market Highlights:

• Oats (+10.2%) – A sharp rebound driven by supply constraints and increased demand, challenging trend-followers positioned short.
• Cocoa (+5.7%) – The standout bullish outlier continues its massive rally, offering opportunities for traders who can withstand significant volatility.
• Heating Oil (+5.22%) – Seasonal demand and geopolitical pressures spark a potential breakout, posing challenges for medium-term bearish models.
• Russell 2000 (+3.92%) – A welcome recovery signals a return to long-term bullish trends in equities.
• VIX Futures (-14.26%) – A sharp decline reflects calming investor sentiment and a resurgence of risk-on behavior.

Opportunities Amidst Evolving Trends This week exemplifies the dynamic nature of futures markets, as trends in equities breathe new life into trading opportunities, while commodities like Cocoa and Heating Oil continue to test traders’ resilience. With volatility subsiding, systematic approaches are positioned to shine, capturing directional movements and managing transitional phases. Full Report Available! For an in-depth analysis of this week’s key market moves, causal factors, and their implications for trend-following strategies, access the full report.  Click here to read the full report! 2025: A Year of Trends As markets stabilize and trends emerge, this year promises continued opportunities for systematic traders. Stay disciplined, adaptable, and ready to capture the next wave of trends. May the markets remain ever in your favor!