The Trends That Would Not Hold
July was not a quiet month.
Markets moved. Some moved violently. Trends appeared, strengthened and, in several cases, looked as though they might finally provide trend followers with something meaningful to work with.
Then they broke.
That distinction sits at the heart of July’s Trend Following Performance Report.
The three major trend benchmarks all finished lower for a second consecutive month, although the losses remained modest. The BTOP50 Index held up best at -0.63%, followed by the SG Trend Index at -1.12% and the TTU Trend Following Index at -1.63%. The S&P 500 Total Return Index, meanwhile, went virtually nowhere at -0.06%.
What made July interesting was not the size of those losses.
It was how they were produced.
A Month That Could Not Make Up Its Mind
The TTU Trend Barometer tells the story beautifully.
Across July’s five weeks it printed:
64 → 39 → 50 → 52 → 30
That is not deterioration in any conventional sense. It is instability.
The month began firmly inside favourable territory as equities, precious metals and Bitcoin rallied together. A week later the Barometer had collapsed 25 points as leadership rotated and many of those moves reversed.
Then came another recovery.
Energy surged. Crude broke higher. Bonds moved cleanly across the curve. The US dollar strengthened and grains began travelling together.
By the fourth week, the Barometer had recovered to 52.
For a moment, July appeared to be building something trend followers could work with.
Then the final week arrived.
Crude reversed sharply. The dollar turned against the entire currency basket. All eight grain contracts fell together. The Barometer collapsed another 22 points to finish July at 30, its lowest reading of the 2026 cycle.
There was plenty of movement.
What was missing was persistence.
Trend Strength Is Not Enough
This is perhaps July’s most useful lesson.
Trend followers do not get paid simply because markets move. Nor do they necessarily get paid because a large number of markets begin trending.
They need those trends to survive.
July repeatedly produced directional movement strong enough to attract positioning and then reversed it before that positioning had sufficient time to harvest the move.
The fourth week demonstrated the opposite beautifully. Market breadth barely changed, with 23 of 49 contracts higher for the second consecutive week, and the Trend Barometer edged only two points higher from 50 to 52.
Yet the SG Trend Index swung from -0.95% to +1.24% month-to-date.
Why?
Because the trends that were moving happened to be trends the portfolio already held.
Crude was extending its breakout. Bonds continued lower. The dollar strengthened broadly. Several grains advanced together.
The environment had not suddenly become dramatically better.
The existing trends simply persisted.
The following week showed the other side of exactly the same mechanism.
The Benchmark Order Reverses
July also produced an interesting reversal in the relative performance of the three trend benchmarks.
The broader BTOP50 Index finished first at -0.63%, despite having trailed the two pure trend-following composites during the previous two months.
That is not necessarily evidence of better positioning.
It reflects construction.
Because the BTOP50 includes meaningful exposure to strategies outside pure trend following, it was less fully committed to the trends that failed during July. That broader mandate diluted participation when those trends were working, but it also reduced the amount surrendered when they reversed.
The same characteristic that can restrain long-run participation in strong trending environments became defensive when trends repeatedly failed to persist.
The SG Trend Index finished July at -1.12%, while the TTU Trend Following Index, consisting entirely of long-tenured systematic trend-following programs, declined 1.63%.
The pure trend composite was simply more exposed to the very phenomenon July punished.
Trends that looked real.
Trends that became positions.
Trends that then disappeared.
The Long-Term Picture Has Barely Moved
It is easy to overinterpret a difficult month.
July does not justify it.
Despite two consecutive negative months, all three trend benchmarks remain positive for 2026.
Through the end of July:
SG Trend Index: +7.90% YTD
BTOP50 Index: +7.87% YTD
TTU Trend Following Index: +6.62% YTD
The gap between them has narrowed considerably, but the broader cycle remains intact.
The longer-term characteristics of the TTU Trend Following Index also remain largely unchanged. Since 2000, the Index has generated a 7.53% CAGR, with the methodology continuing to favour programs possessing verified long-term track records rather than selecting managers simply because they are large or currently fashionable.
The Index currently contains 51 active programs, eight more than it carried at the end of 2025. For July, 42 had reported by the cut-off date, meaning the month’s equal-weighted result remains subject to revision as the remaining programs report.
The Serenity Portfolio Absorbs the Whipsaw
The TTU Top 5 Serenity selection also declined in July, returning -1.17%.
That marked its third consecutive negative month, but the scale of the decline was dramatically smaller than June’s -4.27%.
Its trailing twelve-month return actually increased slightly to 38.00%, while year-to-date performance stands at +13.62%. One constituent, Man AHL’s AHL Dimension, had yet to report at the cut-off, so the July figure remains provisional.
Again, the important point is not that the portfolio avoided the difficult environment.
It did not.
It absorbed it.
That distinction matters.
What July Really Told Us
Trend following does not require markets to move in a particular direction.
It requires something much simpler and much harder.
Persistence.
July offered movement almost everywhere. Energy surged. Currencies moved. Grains broke out. Equities changed direction. Precious metals reversed.
But movement alone is not enough.
A trend has to survive long enough for systematic positioning to build, participate and eventually harvest the outlier.
July repeatedly offered the first two pieces and withdrew the third.
The TTU Trend Barometer enters August at 30, ten points below Neutral and with its rate of change classified as Falling Rapidly.
That does not tell us what happens next.
It tells us what the environment currently offers.
And right now the problem is not finding markets willing to move.
It is finding one willing to keep going.
That is the difference between movement and trend.
Richard Brennan writes on systematic trading, complex adaptive markets, and the philosophical foundations of trend following at atstradingsolutions.com. His books include The Fractals of Finance, Complex Adaptive Markets, Carved by Impossibility and The Aussie Turtles Trend Following Guide.
Want to explore why structure exists at all?
Carved by Impossibility: What Remains When Everything Else Is Eliminated
The book explores the architecture of constraint, emergence, and reality itself, and what it means for how we understand markets, life, and the universe.
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Want the theoretical foundation for why trend following works?
The Fractals of Finance: Determinism, Adaptation and the Geometry of Markets bridges complexity science with practical trading implementation. With a foreword by Jerry Parker, original Turtle Trader.
Available now on Amazon in paperback, hardcover, and Kindle.
Want a practical field manual for trading trends and capturing outliers?
The Aussie Turtles Trend Following Guide: A Field Manual for Hunting Outliers adapts the timeless principles of the original Turtle traders into a systematic, rules-based approach for modern markets. Co-authored with Adam Havryliv.
Available now on Amazon in paperback, hardcover, and Kindle.