“The markets were still trending. They just stopped trending the way last week’s positioning was built for.”
Trend Following Weekly Report
Last week’s payrolls-driven risk-off partly unwound this week, though the recovery was anything but uniform. Equities and crypto rebounded while the petroleum complex broke down hard and the dollar handed back part of its surge. Equity indices rose almost two percent on average, the Nikkei adding nearly five percent to a fresh record and the Nasdaq more than two percent, and bitcoin bounced more than five percent after the prior week’s steep decline. The split came in the commodity complexes. Energy was the heaviest sector, with both crude benchmarks down more than six percent as the early-June rebound fully unwound. The precious metals fell on the week but rallied sharply into Friday’s close, and the dollar eased back below one hundred as the rate repricing of a week ago partly reversed.
For trend followers, the story again sits in the indicators, and this week they pulled apart. The TTU Trend Barometer held at forty-three percent, Neutral for a second week, with its rate of change firming from Rising Weakly to Rising Moderately. Yet the SG Trend Index gave back ground, slipping from up almost twelve percent on the year to up about nine and a half percent, with the June month-to-date figure turning negative. The two readings can diverge because they measure different things. The barometer tracks the share of markets in medium-to-strong trends in either direction, so a week that reverses last week’s moves can leave it flat. The index tracks whether the trends a system actually held paid, and this week the reversal whipsawed them: short crypto was hit as bitcoin bounced, and the metals breakdown turned back intraweek.
The read for positioning: the clearest fresh opportunity sits on the short side of the energy complex that broke down, while the rebound in equities and crypto whipsawed last week’s shorts. Whether that rebound holds, or the complex keeps fracturing into separate trends, is the open question into next week.
Top Movers (Up): Bitcoin, Nikkei 225, Coffee
Top Movers (Down): Crude Oil WTI, VIX, Crude Oil Brent
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