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*** Housekeeping note: As some of you know, the MO team recently joined an established asset management firm to manage capital utilizing the MacroOps investment process — if you are a qualified purchaser (please see attached description) and are interested in learning more, please let us know.

We’ve also recently expanded the team — bringing Dean Christians on board — and are in the process of merging our companies.

In November, MacroOps will relaunch with a new brand, website, and interactive quantitative dashboard featuring our models and proprietary historical datasets.

With these changes, we’ll be more than doubling Collective pricing at the relaunch to preserve the size and quality of our community. If you’ve been on the fence, now is a good time to try it and see if it’s a fit.***

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MO Portfolio & Trades

1. The portfolio rose +93bps last week and sits at +43.18% on the year, below our YTD high-water mark of +61%. We’re long Brent and heating oil futures, the BCOM Index, a few miners and energy plays, and select biotech and healthcare plays. We’re short silver, soybeans, and a small position in EUROSTOXX50.

2. The week ahead in data. The Fed enters its blackout period through Oct 29th. September CPI and PPI both ran hot, yet October hike odds fell to 17%. Wednesday we have earnings from both META and TSLA. Meanwhile, Treasury supply returns Wednesday with a 20-year reopening and Thursday with five-year TIPS, as crude stays above $100 and the 10-year nears 5.2%.

3. From Mike G’s latest (link here): “For two weeks, we’ve flagged the tension between equities and energy. Both looked poised to rise. One had to give. Last week gave us the answer. The Nasdaq sold off sharply after stalling roughly halfway to the 1x measured-move target of its 3.5-month head-and-shoulders continuation. The small flag that formed at the end of September gave us a key level to raise stops, and we closed our Nasdaq long in the Macro Ops portfolio when the bull flag failed to follow through.”

4. Last week I said rotation looked to be on the cards. That’s exactly what we got, with SPX ex AI outperforming by 5% (chart via GS).

5. This is a pretty incredible chart from GS. The “AI Winners” vs. “AI at Risk” trade has round-tripped 100% of its YTD gains. This explains the tough givebacks at many large funds this year; for example, Lone Pine and Brevan Howard have both given up nearly all of their 40%+ ytd gains.

6. It’s all one trade, and one of the best early indicators of a potential trend change is monthly export data out of Taiwan and South Korea (chart from BBG’s Simon White).

7. My teammate Dean Christians put out a couple of bangers last week. Dean notes:

“The following chart highlights instances when CCC- and B-rated high-yield bonds fell to the bottom 15th percentile of their respective 63-day ranges while the S&P 500 remained in the top 10th percentile. Although rare, this divergence between credit and equities has occurred near major stock market peaks. Notably, even higher-rated BB high-yield bonds are trading below the 15th percentile of their range.”

8. Also from Dean: “For only the 30th time since 1929, the TCTM Risk-Off Composite has triggered a warning, signaling narrowing market participation and increased vulnerability to a countertrend pullback in the S&P 500.”

Our current base case is for continued rotation and sideways chop and vol here, though we’re staying nimble.

9. Positioning and sentiment. GS reports US long/short hedge fund net exposure fell 3.2 points, the largest weekly drop since Liberation Day, to the 0th percentile across 1-, 2-, and 5-year lookbacks. TMT saw its largest weekly net selling on record. Gross exposure, however, held at 213.9% (83rd percentile over three years). Funds have “gotten less long,” per GS, not materially smaller. They also report six straight sessions of AI-stock selling, with cumulative selling matching late July’s intensity and the largest since March 2022 (-3.0 z-score).

DB’s broader equity positioning measure remains modestly overweight (0.17sd, 51st percentile), but that masks a sharp divide between underweight discretionary investors (-0.36sd, 24th percentile) and heavily positioned systematic strategies (0.81sd, 86th percentile). BofA’s Bull/Bear indicator’s active sell signal has ended.

10. A few months ago, in HIGH GEAR: A NEW ECONOMIC REGIME… I laid out the case for accelerating US growth and a breakout in rates. Below are two of the charts I cited in that report. I still believe rates are ultimately headed higher, but these indicators point to a continued near-term pullback in yields, which should give equities some additional relief.

11. There’s not much I like in this environment, though I’m seeing some tactical opportunities in FX. Last week we got long GBPUSD as it reversed off the bottom of its long-term sideways range. I’m considering a similar setup in AUD (weekly chart below), which has seen a big positioning flush.

12. One of my favorite equity names right now is Harbour Energy (HBR.LSE). Brandon wrote it up for the Collective the other week, arguing it’s deeply undervalued at ~$9/boe of proven reserves versus ~$18–21/boe for peers. He sees a shift toward lower-tax production lifting cash flow even with flat output, which supports debt reduction and shareholder returns. His bull case implies ~$11/share based on 7× projected 2028 free cash flow at $90 Brent. Chart below is a monthly.

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Thanks for reading.

Your Macro Operator,

Alex

In 1949, two Harvard psychologists, Jerome Bruner and Leo Postman, flashed playing cards in front of 28 students. Each flash lasted a few thousandths of a second longer than the last. After each, they asked the students what they had seen.

Most cards were standard. Hidden among them were trick cards, with color and suit swapped: a red six of spades, a black four of hearts. The students recognized standard cards in about 28 milliseconds. Trick cards averaged 114—four times longer. And across the lengthening flashes, patterns emerged.

First, denial. Nearly every subject called the red six of spades a six of hearts or a black six of spades, with full confidence. Shown it longer, half compromised: “the purple six of spades,” “blackish brown.” Longer still, and for more than half, perception broke down. One subject exclaimed: “I don’t know what color it is now or whether it’s a spade or heart. I’m not even sure now what a spade looks like! My God!” Finally, recognition. “Good Lord, what have I been saying? That’s a red six of spades.”

Every regime change prints a red spade. The first lower high after a two-year advance. The breakout that fails on volume that used to carry it. The hedge that no longer hedges. When this happens, traders risk succumbing to the same reactions as the students. Denial: “healthy pullback.” Compromise: “a correction within an uptrend.” Or the stage that costs the most, disruption: “Does my setup even work anymore?” Recognition finally arrives as it did in Cambridge: late, and in self-reproach.

The study did offer consolation. A subject who had seen only standard cards was no faster to recognize his first trick card than one who had seen no cards at all: 360 milliseconds. But a subject who had already encountered a trick card needed just 230. Two or three, 84.

A decade of ordinary cards does not teach you to see the trick card. Only trick cards do.

Which is why the risk-taker who sat through 2008, or 2020, or 2022 can name the next regime before the one who has only ever been dealt hearts. Not because his predictions are any more accurate. Because he has already denied a red spade, compromised with it, and learned what late recognition costs.

The market shuffles the next red spade into the deck as you read this. Acknowledging that fact is what veteran traders call humility. The study measured it as reaction time. And it improves with every red spade you encounter.

Tension Resolved

For the past two weeks, we’ve highlighted tension between equities and energy. Both looked poised to rise. One had to give. This week gave us the resolution, with the Nasdaq selling off sharply after stalling roughly halfway to the 1x measured move target of its 3.5-month head-and-shoulders continuation. The small flag that formed at the end of September offered a key level to revise stops. We closed our Nasdaq long in the Macro Ops portfolio last week, on the bull flag’s failure to follow through.

Energy, meanwhile, pushed higher, with December WTI crude completing the bull flag cited last week. Price reached the 1x measured move target of 98.75 on Friday for the underlying 3.5-month head-and-shoulders continuation.

January Brent also broke out on Friday from a 7-month head-and-shoulders continuation. The upward-sloping neckline displays the strength of the trend thus far. We’re long both December Brent and November heating oil in the Macro Ops portfolio.

Elsewhere in commodities, December London cocoa continued to consolidate inside a 3-month ascending channel.

Corn futures sold off hard last Friday following the USDA Crop Production report and found little relief this week. Price is now retesting the upper boundary of a 2-year symmetrical triangle.

December hogs broke out on Wednesday from a 4-month running wedge and are now retesting the lower boundary.

December soybean oil spent another week dancing at the lower boundary of its 4-month symmetrical triangle. No breakout yet.

And December copper continues to consolidate within a 4.5-month head-and-shoulders continuation.

The Pauses That Refresh

The Tactical Composite Trend Model from our Lead Equity Market Strategist, Dean Christians, fired a Risk-Off signal this past week. It is just the 30th such signal since 1929. Members can read his report on what it means for forward returns in the research portal.

The latest equity screen revealed several bullish formations across integrated oil stocks. In other industries, consolidations that formed above their 200-day EMAs are now testing support at or below those averages. Below are the names that stood out this week:

Active watchlists, real-time positioning updates, and live portfolio tracking are reserved for members of The Collective, our premier service offering discussions on high-level theory and performance, differentiated research, and a global community of serious traders and investors dedicated to mastery. Learn more about The Collective here.

Click here to read on our site and get better image quality.

*** Housekeeping note: As some of you know, the MO team recently joined an established asset management firm to manage capital utilizing the MacroOps investment process — if you are a qualified purchaser (please see attached description) and are interested in learning more, please let us know.

We’ve also recently expanded the team — bringing Dean Christians on board — and are in the process of merging our companies.

In November, MacroOps will relaunch with a new brand, website, and interactive quantitative dashboard featuring our models and proprietary historical datasets.

With these changes, we’ll be more than doubling Collective pricing at the relaunch to preserve the size and quality of our community. If you’ve been on the fence, now is a good time to try it and see if it’s a fit.***

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. The portfolio fell -403bps last week, leaving us +42.27% on the year, below our ytd high-water mark of +61%. We’re long the Nasdaq, ETHUSD, semis, crypto miners, commodities index, US dollar, and some select biotech plays.

2. The week ahead in data. September CPI on Wednesday is the week’s decisive release. Markets price roughly a one-in-five chance of an October hike and better than even odds for December. A firm core reading would bring the October meeting back into play.

Earnings open Tuesday with JPM, GS, C, and WFC, followed by TSM on Thursday. Financials are down 7.5% over the past month while the SPX trades near record highs, so commentary on credit quality and capital markets activity should carry more weight than the headline results.

3. Good chart from @mark_ungewitter who notes, “SPX multi-decade trend channel offers three scenarios: 1) Imminent mean reversion; 2) Mean reversion following further overshoot, perhaps in the form of a classic Q4 rally; and 3) Durable new advance altering multi-decade behavior.”

4. DB’s latest positioning report suggests some rotation might be on the cards, noting, “The Tech rotation has run far and the risk-reward no longer looks favorable in the near term. Last week we flagged that the rotation into Tech that began in late July, the 5th in the last 2 years, was approaching the top of its long-run trend channel, a level from which it has turned several times previously. Tactically, the risk-reward no longer looks favorable, with about 4pp of outperformance to reach the top but potentially 16pp of relative downside if the pattern of rotations near the edges of the channel holds. We note that prior rotations have been inverted V-turns.”

We agree.

5. Current cross positioning certainly supports this. From GS: “Clients have certainly re-engaged in tech as a result of this macro uncertainty. Chart 2 shows that net exposure on our prime book to Mag7 as a % of Total US exposure is near 22%, which is the highest on record since the start of 2022. Chart 3 shows that Semis and Semi Equipment as a % of Total US Exposure now sit at ~12% (vs a peak in June of 14% but also vs starting the year ~6%). Our prime data shows that US Tech stocks in September had their largest % buying in a month since Feb ’25 (and were the only sector net bought on our prime book in the month of September).”

6. Meanwhile, our RTY positioning score is below the -75th %tile. A level that has marked significant bottoms in the past.

7. The “Big 10” AI names have reached a level of market concentration that has marked every previous bubble of the last 200 years, outside of the railroad bubble, which climbed to 63%. This is not reason by itself to be bearish. Just useful context for where we’re at.

8. 39% of US market cap is now trading at over 10x EV to sales, which is 4% higher than what we saw at the peak of the dot-com bubble.

9. Coatue recently put out a good deck on the AI space (link here). One thing they point out is that AI financing is evolving from “Big Tech pays for its own servers” into a multilayered system of leases, joint ventures, private credit, guarantees, and supplier backstops. The implication is that the AI boom increasingly depends not just on demand for compute, but on who can finance it, and who ultimately absorbs the risk if the economics disappoint.

A tell-tale sign of all late cycles is new “innovative” and increasingly complex forms of financing.

10. What will kill this late cycle then? The same thing that kills all cycles: tightening financial conditions, stemming from a Fed forced into a hiking cycle by increasing inflationary pressures.

This chart from 3Fourteen Research shows the Fed likely has a good deal more catching up to do.

11. We’ll be paying close attention to our AI CDS basket below. It’s well off its early ‘26 lows but has been moving sideways for the past few months. This should lead, or at least confirm, the next move in risk assets.

12. From my teammate Mike G’s latest weekly, “the ETH/USD analog to spring 2025 that we’ve been tracking for the last month continues to rhyme (link here).

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Thanks for reading.

Your Macro Operator,

Alex

Spend enough time in markets and you learn that what you’re feeling is often what others are feeling too. There is no rising above the crowd. There is only noticing: I’m scared to buy, so others must be too. I’m slow to exit, so others must be too.

For the past few months, equities have been punishing—following a run that seared fast profits into recent memory. I’ve been hearing the same story from trader after trader: they keep round-tripping trades in this chop. Their entries are excellent and follow their rules, but when weakness appears, they can’t close.

When a trader won’t close a losing position, we say he’s unwilling to admit he was wrong. When a trader won’t take profits on a winning position, we call him greedy. What he’s actually unwilling to let go of is his open position’s potential.

I’m not watching this from a distance.

When I trade from imbalance, I breathe life into my open positions. My open positions become open possibilities. They feel alive. They carry the potential to become what my mind needs them to be.

This is the trade that will finally break the losing streak. This is the trade that will carry the equity curve into new high ground. This is the trade that will restore my confidence.

As long as the position remains open, the potential I’ve given it remains open too. To close the trade is to snuff out a possibility I want for myself. My gut drops, empty, knowing what should be done. My hands click away to another name, another market, burying the evidence.

As a younger trader, I believed mechanical rules and resting orders would force me to execute my plan in a cold, calculated way. Yet even today, over a decade in, I still hear the voices of my open positions and feel the aliveness they carry.

When I’m trading from balance, those voices arrive hollow and dissolve before they land.

When I’m trading from imbalance, their pleas can pierce my heart: “Please, don’t snuff me out.”

You hear them too. Is it the voice of the trade? Or the trader?

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Unresolved Tension

The battle between equities and energy remained unresolved this past week. The Nasdaq’s December contract continued to hold its breakout from a 3.5-month head-and-shoulders continuation.

Brent, meanwhile, held the structure of its 5.5-month head-and-shoulders continuation on the continuous contract, inching back toward the neckline.

December WTI crude has formed a bull flag after breaking out of a 3.5-month head-and-shoulders continuation last month. The 1x measured move target is 98.75.

In ags, London cocoa futures are consolidating within a 3-month ascending channel.

Soybean futures have come back to retest the neckline of a 5.5-month head-and-shoulders continuation on the continuous chart.

December soybean oil continues to coil within a 4-month symmetrical triangle, having tested both upper and lower boundaries multiple times.

Last week, we noted the 336.875 level for recompletion of November feeder cattle’s 2.5-month head-and-shoulders reversal. Tuesday’s close confirmed recompletion, with Friday following through after another brief test of the neckline. The 1x measured move target sits at 361.275.

Forex in Focus

Australian dollar futures are bouncing off the neckline of a 6-month head-and-shoulders reversal.

British pound futures are coiling inside a 15-month symmetrical triangle on the weekly timeframe. Price is testing the lower boundary for the fourth time.

EUR/AUD is on the verge of breaking down from its 6.5-month descending triangle.

And the ETH/USD analogue to spring 2025 that we’ve been tracking for the last month continues to rhyme.

The Pauses That Refresh

Here are the equity names that caught my attention in this week’s screen:

Active watchlists, real-time positioning updates, and live portfolio tracking are reserved for members of The Collective, our premier service offering discussions on high-level theory and performance, differentiated research, and a global community of serious traders and investors dedicated to mastery. We’re building the next evolution of the Collective right now, arming every one of our operators with best-in-class tools, research, and infrastructure. As these features roll out, we’ll be raising the membership price. You can lock in the current rate by joining today. Enrollment is open until this Sunday at midnight.

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I’m Mike Gyulai, Lead Technical Analyst at Macro Ops. Alex reads the macro. Brandon reads the balance sheet. Dean reads the models. Tony reads the vol surface. I read the charts.

And when my read of price action lines up with the team’s macro view, the trades get big.

2026 delivered the explosive trends we expected, agricultural commodities above all. Every Saturday in This Infinite Game I’ve covered those trends through the lens of classical charting.

Today, I’m sharing charts of this year’s best moves: the ones now permanently in my playbook. I keep a chartbook like this for one reason. When markets turn sluggish, noisy, and “make no sense,” it reminds me what classical chart patterns are at their best: moments of order and clarity surfacing from otherwise random oscillations in price.

Across just this year, heating oil hit its 2x measured move target three days after the 1x. Rough rice took two months, backing and filling to key moving averages before resuming its trend. Cotton and crude reversed their first breakouts and recompleted weeks later.

I encourage you to read each chart as a trade, not just a picture. Ask where you would have entered, where you would have placed your risk point, and what you would have done on the first hard retest of the breakout boundary, or at the 1x measured move target.

Then meet me after the last chart. That’s where the real work of tactical swing trading begins.

May soybean oil broke out of a 5.5-month descending channel on January 15, 2026, reaching its 1x measured move target of 56.97 three and a half weeks later on February 9, 2026, and its 2x target of 61.42 on February 26, 2026.

September coffee broke down from a 4.5-month symmetrical triangle on January 30, 2026, reaching its 1x measured move target of 268.45 three weeks later on February 19, 2026. Coffee then formed a 2.5-month head-and-shoulders continuation, which extended the downtrend to its 1x measured move target of 242.75 on June 4, 2026.

Heating oil futures formed a 1.5-year head-and-shoulders bottom on the weekly chart. The 1x measured move target sat at 3.28, the 2x at 3.94.

The trigger was the April contract, which broke out above an 8-month resistance line on February 19, 2026, reaching its 1x measured move target of 3.0674 on March 3, 2026, and its 2x target of 3.7274 three days later on March 6, 2026.

May oats broke out of a 2-month ascending triangle bottom on February 19, 2026, reaching their 1x measured move target of 342.25 two weeks later on March 5, 2026, and their 2x target of 366.25 on March 11, 2026.

May cotton broke out of a 3.5-month descending channel on February 25, 2026, recompleting on March 16 after an initial pullback, and reaching its 1x measured move target of 68.57 that same day, then its 2x target of 71.79 on April 6, 2026.

July KC wheat broke out of a 1.5-month broadening pattern on April 23, 2026, reaching its 1x measured move target of 720 three weeks later on May 12, 2026.

November canola broke out of a 1.5-month symmetrical triangle on April 28, 2026, reaching its 1x measured move target of 777.6 one month later on May 28, 2026. It then formed a 1-month ascending triangle, which broke out the same day the initial pattern’s 1x target was reached, and reached the second pattern’s 1x measured move target of 796.9 six days later on June 3, 2026.

December soybean oil broke out of a 1.5-month ascending channel on April 28, 2026, reaching its 1x measured move target of 70.7 six days later on May 4, 2026.

Rough rice broke out of a 2.5-month ascending triangle bottom on May 4, 2026, reaching its 1x measured move target of 12.705 nine days later on May 13, 2026, and its 2x target of 13.945 on July 9, 2026.

August white sugar broke out of a 3-month symmetrical triangle on June 26, 2026, reaching its 1x measured move target of 487.3 five days later on July 1, 2026.

October raw sugar broke out of a 4-month multi-point trendline on August 6, 2026, reaching its 1x measured move target of 16.92 six days later on August 12, 2026, and its 2x target of 18.88 on September 10, 2026.

December corn broke out of a 3-month head-and-shoulders continuation on August 17, 2026, reaching its 1x measured move target of 548.75 two weeks later on September 2, 2026.

November crude oil broke out of a 3-month head-and-shoulders continuation on August 17, 2026, recompleting on September 1 after an initial pullback, and then reaching its 1x measured move target of 97.82 on September 10, 2026.

November rough rice broke out of a 1-month ascending triangle on August 21, 2026, reaching its 1x measured move target of 15.61 one week later on August 28, 2026.

November RBOB gasoline broke out of a 3.5-month cup-and-handle on August 31, 2026, reaching its 1x measured move target of 3.3967 three and a half weeks later on September 24, 2026.

Every chart above was once a chart in progress. A triangle three-quarters built. A head-and-shoulders waiting on its right shoulder. That is the version you get every Saturday in my weekly report, This Infinite Game: the pattern before it resolves, the breakout level, the measured move targets.

The chart is the easy part. Tight stop or loose stop? Take the 1x or hold for the 2x? A 50% win rate at 2:1 or 35% at 4:1? Which of these setups earns a place in your system, and at what size?

Those answers don’t fit in a weekly report. They get worked out in dialogue, and that is what The Collective is: a room where you bring a pattern to me, to Alex, Brandon, Dean, and Tony, and to several hundred traders and investors, and work through how you’d trade it and how it fits a system you’d run with your own money. Alongside Alex’s macro positioning, Brandon’s deep value work, Dean’s quantitative models, Tony’s volatility read, and our futures alerts with entries, adds, and stops. The research is only half the edge. The room is the other.

One more thing. As some of you know, the MO team recently joined an established asset management firm to manage capital utilizing the Macro Ops investment process—if you are a qualified purchaser (please see linked description) and are interested in learning more, please let us know.

We’re also relaunching Macro Ops in November with a new brand, website, and an interactive quantitative dashboard built on our models and proprietary historical datasets. Existing members will be grandfathered in at their current rates.

With these improvements, Collective pricing roughly doubles at the relaunch to preserve the size and quality of the room. This week’s enrollment is likely the last chance to lock in current pricing. If you’ve been on the fence, this is the week to find out if it’s a fit.

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Click here or on any of the charts to read on our site and get better image quality.

*** Housekeeping note: As some of you know, the MO team recently joined an established asset management firm to manage capital utilizing the MacroOps investment process — if you are a qualified purchaser (please see attached description) and are interested in learning more, please let us know.

We’ve also recently expanded the team — bringing Dean Christians on board — and are in the process of merging our companies.

In November, MacroOps will relaunch with a new brand, website, and interactive quantitative dashboard featuring our models and proprietary historical datasets.

With these changes, we’ll be roughly doubling Collective pricing at the relaunch to preserve the size and quality of our community. We’re running an enrollment this week, which will likely be the last chance to lock in current pricing. If you’ve been on the fence, now is a good time to try it and see if it’s a fit.***

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. The portfolio fell -219bps last week, leaving us +45.01% on the year, below our ytd high-water mark of +61%. We’re long the Nasdaq, ETHUSD, semis, crypto miners, commodities index, US dollar, and some select biotech plays.

2. The week ahead in data. Friday’s soft payrolls dropped October hike odds to 16%. So Wednesday’s minutes are a bit stale.

3. Nasdaq futures put in a new all-time weekly closing high on Friday, which many wouldn’t expect given the feel of this market. The active contract now has to clear the June highs, which it’s bumping up against. Our read is that it punches through and moves higher.

4. My teammate Dean Christian put out a killer note over the weekend. One of the studies in the report looks at the unusual nature of this market and what it likely means. Dean notes that “the equal-weighted S&P 500 is on track to close lower for a seventh consecutive week, a streak last seen during the 2022 bear market. The chart below puts this move into historical context, with a blue dot marking each instance when a losing streak reached six consecutive weeks…

“As the chart illustrates, six-week losing streaks have historically occurred during corrections or bear markets. With the S&P 500 less than 2% below its record high, the current market backdrop is unprecedented. Weak relative trends are not inherently concerning and often result from mega-cap leadership, but outright price deterioration is harder to dismiss, and that is increasingly evident now.”

If you’d like access to his report, click here and sign up.

5. We’re seeing all kinds of unusual action… Another example, among many, is the breakdown in Financials (XLF) while the SPX continues to trade within a few % of all-time highs.

The forward returns chart shows each time XLF has fallen four straight weeks and/or is down over 8% while the SPX remains near its highs. This has happened only 12 times since 1989, and only twice before in its strongest form (sharp and sustained together): May 1993 and June 2000.

Historically, the next 3m for the SPX has looked normal, but the following year has lagged badly.

6. Here’s the same study overlaid on a historical chart. It’s rare to see this weakness in financials, and even rarer to see it both sharp and sustained. These episodes tend to cluster around market tops or extended stretches of sideways action (May ‘93). More reason to keep a close eye on any continued widening in credit spreads.

7. The backdrop is that the market is increasingly a single driver/narrative market. There’s the AI trade and then everything else, as shown in the GS chart below. This is why we’re seeing things like the 3m correlation between the SPX and the equal-weight index at all-time lows.

8. The market is simply reflecting earnings. As GS notes, “At the stock level, AI infrastructure stocks are expected to drive more than half of S&P 500 EPS growth in Q3. The top 10 contributing stocks are expected to account for over two-thirds of aggregate S&P 500 earnings growth this quarter, with Micron (MU) and Nvidia (NVDA) together accounting for more than 1/3 of index growth.”

9. But as MO readers know, this isn’t all that unusual when put into the broader context of where we are in the secular and cyclical economic and market regimes. This is simply Late Cycle action within a larger Core-driven regime. We should expect this narrowing and concentration to continue until something breaks, which will show up first in credit spreads and then get confirmed by the labor market.

10. GS prime book data notes that positioning is still defensive beneath the highs. Leveraged funds are at record net-short Russell 2000 exposure, and most equity sectors saw net selling despite strong indices. AI and semis remain the clear exception, with flows concentrated in mega-cap growth. Net L/S positioning has fallen to the 0th, 3rd, and 2nd percentiles on 1, 3, and 5-year lookbacks, respectively.

The best contrarian pockets are cyclicals and energy. Industrials, materials, transports, and data-center names sit near relative lows, while energy has been heavily shorted even with oil elevated. Meanwhile, $1.5trn+ has flowed into U.S.-listed ETFs year-to-date, cushioning headline indices.

In short: “constructive on earnings, cautious on the market.” Light positioning leaves room for an upside squeeze if yields can halt their rise, but breadth likely stays weak unless participation moves beyond AI.

11. We still like crypto here… BTC, ETH, and SOL are all in very tight daily compression regimes. We’ll be adding this week on follow-through.

12. The Nikkei 225 has broken out of a 10-month corrective pattern. Positioning has largely reset. We’re buyers here.

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Thanks for reading.

Your Macro Operator,

Alex

Last year, my wife named the bottleneck in her architectural design business. Clients hire her for her eye, her taste, the way she communicates a vision. Yet contract drafting, order tracking, bookkeeping, and invoicing consumed almost half her working hours each week. To take on more clients—to serve more people with what they hire her for—required space she did not have.

We debated a part-time assistant. Then Claude Cowork launched. Over three weeks, we trained it to draft her contracts, track her orders, keep her books, and generate her invoices. Once trained, it cut her administrative hours by more than half. The hours she got back went not to idle leisure, but to all that makes her come alive: designing, observing, researching, sitting across the table from clients.

The debate over whether AI will save or enslave us misses what is already true: it is working in service of humanity today. The unlock is naming what in your work is rote administration and what is uniquely human.

Traders, buried in numbers and models, see only the first.

One trader I know described “market feel” as the heart of his process. We ran the same exercise: which hours crowded out cultivating that feel? The tedious logging of trades in his journal. In one week, we trained AI to read a single post-mortem chart and file every trade for him. The hours he got back went straight to what only he can read: order flow, closing auctions, news failures.

Another intuits price structure so well he manages open positions better than any ruleset he can write. His bottleneck was getting into positions at all. He would loop on analysis, find imperfections in every setup, or become overwhelmed by opportunity in fast-moving markets. AI now enters every valid setup—at conservative size with a stop attached—for him. It never hesitates, never second-guesses his rules. He arrives at his desk each morning, unencumbered, to do what he does best: manage open exposure.

The verdict is in. AI is here to serve our humanity—to accentuate what each of us does that no system can replace. Which part of your craft is purely administrative? Which part is unmistakably you?

Name both, and the future so many are still debating becomes yours today.

Equities vs. Energy

The Nasdaq’s December contract held its breakout this week from a 3.5-month head-and-shoulders continuation. Price is now right up against the prior high from June, an important level to watch next week.

The Nikkei has a similar look, having broken out Thursday from a 3-month multi-point trendline.

A potential threat to equity resilience is energy. Brent futures are forming what could be a 5.5-month head-and-shoulders continuation.

The same structure appears in WTI. November crude oil is flagging above its 50-day SMA after reaching the 1x measured move target of its 3-month head-and-shoulders continuation.

Last week, we speculated that a pullback in corn could be imminent after price had reached the 1x measured move target of a 3-month head-and-shoulders continuation on the daily timeframe. The competing view was the 2-year symmetrical triangle on the weekly timeframe, flagging at half-mast on the way to its 1x measured move target. One of the two views had to break, and it did on Wednesday as the pullback on the daily played out. A member of The Collective noted that the midweek selloff was a 3-standard-deviation move.

Despite last week’s impulsive selloff, the weekly timeframe maintains its bullish structure, with price well above the upper boundary of the 2-year symmetrical triangle and a 1x measured move target at 589.25.

November feeder cattle attempted to break out on Thursday from a 2.5-month head-and-shoulders before reversing back to the neckline on Friday. Thursday’s high at 336.875 becomes the level to watch for a secondary completion.

Other agricultural commodities firmed. White sugar futures held the 50-day SMA for the second time since their June breakout from a 3-month symmetrical triangle. Both 1x and 2x measured move targets have been reached.

The London cocoa pattern previously labeled a cup-and-handle has morphed into a 3-month ascending channel. Price found support at the lower boundary twice in two weeks.

December soybean oil looked primed to break down this week from the 4-month symmetrical triangle we have been tracking, but found buyers at the lower boundary each time. The more times a level is tested, the more vulnerable that level becomes to failure. Both upper and lower boundaries have now been tested multiple times.

Forex in Focus

There are a number of large ranges in currencies at the moment. AUD/JPY is testing the lower boundary of a 6-month rectangle.

EUR/AUD continues to coil inside a 6.5-month descending triangle.

And Australian dollar futures have formed an 8.5-month head-and-shoulders top.

The Pauses That Refresh

My recent equity screens continue to reveal a sharply divided market, presenting a diverse mix of long and short setups alongside continuation and reversal patterns.

On Friday, Dean Christians, our Lead Equity Market Strategist, issued a report for members of The Collective regarding the accelerating stealth correction he has been tracking. Notably, the equal-weighted S&P 500 is pacing toward its seventh consecutive weekly decline—a streak not observed since the 2022 bear market—even as the standard SPX remains within 2% of its all-time high. Dean describes this market environment as “unprecedented,” making his analysis required reading for anyone managing equity-focused portfolios.

Below are the names that caught my attention in this week’s equity screen:

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Click here or on any of the charts to read on our site and get better image quality.

*** The MO book is up +47.20% so far this year.

The Collective is where we transparently share the work behind these returns: differentiated research, every position tracked in real time, and ongoing debate with a global group of serious traders and investors, all dedicated to mastery of their craft.

We’ll be raising prices by roughly 50% in the coming months as we roll out new tools and keep the community manageable. Members who join before then will keep the current rate.

If this sounds like your kind of group, then make sure to get in soon before we hike the price***

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MO Portfolio & Trades

1. The portfolio gained +8bps last week, leaving us +47.20% on the year, below our high-water mark of +61%. We’re long Ags, commodities, miners, and ETHUSD. Long Nasdaq, healthcare, and crypto miners. Short CAD.

2. The week ahead in data. Payrolls and euro-area flash CPI land the same morning. Consensus is 100k and 4.1%, with Barclays warning seasonals could push the print below 50k. Wednesday brings August PCE at 3.7% headline and 3.3% core — the Fed’s own gauge, above target for a fifth straight year. EZ CPI is seen jumping to 3.8% from 3.2%, which keeps October live for the ECB.

3. As expected, the Qs jumped early last week and have consolidated sideways since. They remain firmly in a primary uptrend and an SQN Bull Quiet regime. The path of least resistance is up.

4. Despite the calm on the surface of the index, breadth has fallen to levels last seen near corrective lows.

5. My teammate Dean Christians flagged the narrowing rally in his recent report:

“The cap-weighted index is down only about 1%, but the equal-weighted S&P 500 has declined more than 5%, revealing a much deeper pullback in the average stock. Small caps are under even greater pressure, with the Russell 2000 ETF down roughly 8%, while interest-rate-sensitive utilities have plunged more than 17%.

Yields are the obvious culprit, with the 10-year Treasury jumping a staggering 15 basis points on Wednesday. What started as a selloff concentrated in rate-sensitive groups is now spreading into more areas of the market, and that deterioration is showing up in an expanding number of 52-week lows.

In fact, it was enough to trigger a 52-week low spike signal for S&P 500 stocks, a component of the TCTM Risk-Off Composite. With the new component signal, the TCTM Risk-Off Composite increased to 25%, leaving it two alerts short of a broad model warning.”

6. Rising yields are a net negative for risk assets. But on their own they’re a condition, not a catalyst. It matters why they’re rising — improving growth and earnings expectations, or rising inflation concerns. And the way they hit equities is through tightening financial conditions. The rate of change in HY and Baa spreads is accelerating to 12m+ highs, but it’s moving off historically tight levels. It’ll take a bigger move before that feeds into broader financial conditions, which still sit near multi-year lows as shown in the ANFCI chart below.

7. Which is partly why we’re seeing notes like this one from GS:

“US equities refuse to price any panic (GS panic index closed sub 1 on Friday) despite sentiment at the lows (GS sentiment indicator -0.9 … AAII bear ~50 … 70% of SPX stocks are trading below the 50dma … etc) … other risk barometers, namely bond vol (MOVE) and CDX also registering peak fear (~100th percentile) while VIX trades in the low teens (fully cognizant there was a CDX roll this week).”

8. That volatility outside the equity indices is keeping investors bearish despite the persistent bull trend in the dominant AI names. The chart below from @MacroCharts is a good example.

9. I’m watching the Narrative Pendulum closely here, since the market is now entirely reliant on the AI trade propping it up. Public interest (black line) is elevated but still below the “DeepSeek” levels that marked an intermediate top. The shaded red line shows trend homogeneity, which is elevated and rising, though still short of the levels that marked the last three intermediate tops in the AI trade. That backs up my feel: the AI narrative is crowded and increasingly fragile, but it likely has another 1–3 months in it, depending on path and speed, before it hits the consensus levels that mark intermediate to cyclical tops.

10. My teammate Mike G flagged a series of continuation consolidations in the Ag complex in his recent note (link here). We’ll be working buy stops in this space to see if the market can pull us in long.

11. The BBG Agriculture index is reversing off its lower Bollinger Band inside a Blended Bull SQN regime. Whether it can hold these levels will tell us a lot.

12. Plenty of people are trying to call the bottom in bonds. While we’re closer to an intermediate low than we are to the start of this move, I don’t think this selloff is over. I’m using the narrative tool to see when interest spikes and a consensus forms. The last major lows in bonds were marked by a consensus read in this tool.

13. I’m tracking EURJPY for a short entry. We missed the first break below its 8-month sideways rectangle, but it’s been compressing on the daily since. We’re working sell stops to see if the pair can pull us in.

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Thanks for reading.

Your Macro Operator,

Alex

Western culture promotes a belief: busyness equals productivity, motion signals progress, and idle hands confess a lack of ambition.

There is much to admire here. It is the American entrepreneurial spirit. It built the companies and conveniences we take for granted. Silicon Valley. A man on the moon. One day: Mars.

But the belief has a shadow: that if you’re not constantly in motion, you are falling behind.

That shadow has cut down more risk takers than I can count. Not because they were behind. Because markets demand waiting, and the waiting fed the belief.

Consider a batter waiting on a pitch. His body is loaded, weight balanced on the back foot.

His attention is total.

He is tracking the pitcher’s grip, the windup, the release point. Every muscle coiled, ready to fire the instant the ball leaves the hand.

He is waiting. Yet he is anything but passive.

Waiting in sport and waiting in trading share the same posture: readiness.

When I wait for a setup, I am actively receiving: tracking patterns, sifting noise, trusting signal when it arrives.

Frustration comes when I mistake my mind’s pressure to act for a genuine signal to respond. When that pressure to feel in motion leads me to put on the trade.

Consistency lives in the space between what the mind demands and what the market offers.

The feeling of falling behind is an illusion. The discomfort it spawns is real. A trade placed to relieve that discomfort swings at nothing the market offered.

The pitch will come. My only job is to be here when it does.

Markets in Motion

The Nasdaq thrust out of the 3.5-month head-and-shoulders continuation featured in last week’s issue. Price is now hovering above the neckline. The 1x measured move target sits at 33,213.75.

November RBOB gasoline on Thursday reached the 1x measured move target of its 3-month cup-and-handle. Weakness on Friday offers the possibility of a pullback ahead.

Oat futures continue to fly, albeit with increasing volatility in the form of long lower shadows during both Monday’s and Friday’s sessions.

Corn futures have formed a 4-week bull flag after impulsing halfway to the 1x measured move target of their 2-year symmetrical triangle.

Soybean futures have formed a daily flag similar to corn’s weekly one after breaking out from a 5.5-month head-and-shoulders continuation on the continuous chart. The 1x measured move target sits at 1393.

Rough rice futures continue to put in one of the strongest trends of the year, extending their run out of the 1-month ascending triangle featured in the “Commodity Supercycle” section of the August 22, 2026, issue.

Zooming out on the continuous chart, the trend traces back to the May 4 breakout from the 2.5-month ascending triangle bottom highlighted in the May 2, 2026, issue.

Last week, we pointed out that while selling in soybean meal futures had left a long upper shadow on the weekly chart, price closed above the upper boundary of the 10-month ascending channel, offering the possibility of a resistance-turned-support retest. Support held this week and price “filled the wick.”

Natural gas futures completed a 2-month head-and-shoulders bottom on Thursday. Natural gas is in a seasonally strong period through the end of October.

A pattern still developing: the October feeder cattle contract has formed a 2.5-month head-and-shoulders on the daily timeframe.

The Pauses That Refresh

The dispersion in individual equities persists. Here are the setups that caught my eye this week:

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Click here or on any of the charts to read on our site and get better image quality

***The MO port is currently up +47.12% ytd in 26’. The Collective is where we discuss the theory behind the positioning, publish the differentiated research, track the book in real time, and argue it out with a global group of serious investors. If that’s your kind of group, join us in Slack. ***

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MO Portfolio & Trades

1. The portfolio gained +167 basis points last week, leaving us +47.12% on the year, below our ytd high-water mark of +61%. We’re long Ags, energy, miners, ETHUSD. Long biotech, healthcare, crypto miners, and natty producers.

2. The week ahead in data: Thursday brings Xi to Washington with the tariff truce, rare earths and export controls on the table, plus three Nordic decisions. Supply is all front-end: 2s, 5s and 7s. Treasury’s 20–30yr buyback operation lands Thursday after a soft first round. The backdrop is a Fed that hiked to 3.75–4.00% with no dissent and a hawkish dot plot. Twelve of 18 see one more this year, and Goldman now expects October.

3. This environment isn’t without risks, but we trade the tape first, and price keeps telling us the path of least resistance is up. Qs are breaking out from a tight daily compression regime, inside a Bull Quiet regime and an established primary uptrend. We’re buying here…

4. Breadth still looks weak, though it’s nearing oversold. We don’t want to press long aggressively until broader participation bottoms and confirms the move.

5. On the positive side of the ledger, my favorite market internal (LQD/IEF) is inflecting to new multi-month highs. That suggests some durability to this breakout

6. Citadel laid out their bullish Q4 case in a recent note (link here), but they want a pullback first, with the bottom and next leg up not arriving until the end of September. Their reasoning:

“Buybacks are heading into blackout. 10% of S&P 500 weight is in a pre-earnings blackout today. By September 30 that rises to 61%, and the window does not reopen for the majority of the index until November 1. One of the market’s largest structural buyers is stepping aside during exactly the window when the calendar is weakest… The calendar is now entering the exact window we highlighted earlier this month. Historically, September weakness has been concentrated in the back half of the month, and the pattern has been even more pronounced during midterm years. We continue to think the path into month-end is lower.”

7. The index doesn’t tell the full story. Much of the market has been in correction for the past month while SPX and NQ traded sideways, thanks entirely to MAG7 retaining a decent bid. The question is whether the megas catch down to the underperformers or the rest catches up. I think the latter.

8. Sentiment & Positioning — GS: “US L/S Gross leverage rose +2.5 pts to 209.4% (33rd percentile one-year), while US L/S Net leverage fell -0.3pts to 49.9% (7th percentile one-year). US Fundamental long/short ratio (MV) decreased -0.9% to 1.625 (13th percentile one-year).” AAII net bull/bear sits in the 5th %tile, high bearishness. Our Trend Fragility gauge is at 76%, a neutral read that supports higher prices. And CTAs are extremely short bonds across the curve, suggesting we may soon see some respite from yields.

9. If the Iran escalation takes a breather and crude trades sideways, bonds get some relief and attention turns back to earnings. Those should keep coming in strong as long as the AI CAPEX cycle runs.

10. We flagged the bullish setup in semis and momentum last week. We’ve gotten more confirmation since, with leaders like AMD and SMTC breaking out of solid bases (charts are weekly)

11. USD positioning is mostly back to neutral, and I’m seeing setups in long dollar pairs. Here’s an inverted H&S bottom in USDSEK (weekly chart).

12. Weather forecasters have done nothing but revise up their El Niño forecasts since June. Month after month. They now put a three-in-four chance that this winter tops every El Niño since 1950. If this ends up being the case, there will be real consequences for South American and Australian growing conditions and for the Asian palm and rice complex.

13. The Ags trade is taking a breather after an explosive breakout from its 2yr compression regime. The chart below is a monthly of the BBG Ag subindex. Positioning had gotten crowded, so this correction is exactly what we’d expect. We’ll add to Ags as long as it holds above the breakout level.

14. H/T to Collective member @Phil Deane for this one. SBLK is a liquid way to play a constructive dry-bulk cycle. 145 vessels, limited effective fleet growth, improving cargo demand.

The earnings torque is showing up in the numbers... $144.9mn of net income and $1.21 adjusted EPS in Q2, with industry-low operating costs, so stronger spot rates drop disproportionately into cash.

Chart is a monthly. Low multiple relative to growth, insiders buying heavily, and the geopolitical backdrop should keep working in dry bulk’s favor.

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Thanks for reading.

Your Macro Operator,

Alex

My original major in undergrad was music. I knew just enough about writing songs on guitar to understand artists, and just enough about marketing and business to understand record labels. I sought to make a career at the intersection.

Writing music had always tantalized me.

Everything a song could need sat right there on the fretboard: every possible note, every possible combination of notes, laid out across the six strings running the length of the instrument’s neck.

And yet the melodies and chord changes… they’d hide, as if waiting for a time of their choosing to reveal themselves to me.

There were moments I’d stare at the steel strings and the cherry-stained wood beneath them and think: somewhere in there is a progression I’ll soon discover. A song I’ll write around it. An entire composition I’ll later play by heart.

Each time I’d pick up my guitar after that discovery, I would see the song’s patterns, and spot its changes mapped across the fretboard. Right there in plain sight, where they’d been all along.

But whenever I tried to force the patterns—to will them out of the strings—I could never find them.

Only when I shifted from searching to receiving, from trying to allowing, from determined to curious, would the songs allow themselves to be seen.

While my career in music was short-lived, the lessons songwriting taught me still return.

The next relationship that would hold for decades. The next role that would redirect my career. The next investment that would carry my portfolio.

Each was already there. Refusing to be willed into view.

Waiting, instead, for me to stop searching and start receiving.

Every Four Years

One monthly chart has anchored our read of Bitcoin’s cycles since inception: cycle lows spaced 47 months (roughly four years) apart, with cycle highs arriving 35 months (roughly 3 years) after each low. The framework comes from Bob Loukas, founder of The Financial Tap.

In Bob’s framework, the lows are the structural anchors. Highs can be “right translated” (price advances longer than it declines across the 4-year period, as in every cycle to date) or “left translated” (price tops early and spends most of the cycle falling). The lows stay fixed in time.

Standard cycle timing pointed to a bottom next month, in October. Instead, Bitcoin carved out a 2.5-month head-and-shoulders base over the summer and broke out impulsively, forming a potential double-walled bottom.

The base formed after a multi-month decline of three volatile legs lower and a bearish turn in sentiment. Price held without new lows through negative headlines, including Strategy’s initial Bitcoin sales (widely read as forced liquidation) and the failure of the Clarity Act. Volatility then compressed ahead of the breakout.

We have expressed the early-cycle-low thesis through Ethereum, which reclaimed the lower boundary of its 2-year ascending triangle after a June breakdown failed to follow through.

As covered in the August 22, 2026, issue, our expectation after a range reclaim was consolidation back at the range midpoint. We are now four weeks into it.

We remain long Ethereum in the Macro Ops portfolio. Its price action currently rhymes with spring 2025. Analogues hold only until they break, but this one gives us a map for a risk-defined, asymmetric add.

Indices, Energy & Ags

Despite higher oil and higher rates, equities have held up. The case could be made that the Nasdaq has formed a 3.5-month head-and-shoulders continuation on the daily timeframe. Equities are notorious for backing and filling. Add to that a downward-sloping neckline and this would make for a challenging pattern to trade.

October crude oil inched higher to start the week before roundtripping the move into the week’s end. Price has remained sticky at the 100 level following crude’s September 1 breakout from its 3.5-month head-and-shoulders continuation. We are long December Brent in the Macro Ops portfolio.

November RBOB gasoline held up better still, forming a tight pennant across the week and closing near its highs.

December oats put in an impulsive second leg last week after a 2-week consolidation, following their initial August breakout from a 3-month multi-point trendline highlighted in the August 29, 2026, issue.

Soybean meal futures broke out of the 10-month ascending channel we’ve tracked most of this year, then reversed midweek to form a sizable upper wick on the weekly chart. The initial price acceleration confirmed the importance of the level for market participants. While sellers stepped in, price closed above the upper boundary, offering the possibility of a resistance-turned-support retest.

The retest scenario is clearer on the daily timeframe. The continuous chart is shown here.

As a reminder, we are eyeing potential pullbacks in the commodities space, including corn futures, which drifted back toward their rising 50-day SMA after reaching the 1x measured move target of their 3-month head-and-shoulders continuation. We took profits on that leg earlier this month.

December soybean oil has formed a well-defined 3-month symmetrical triangle. While directional bias for consolidation patterns is always in the direction of the prior trend, symmetrical triangles can act as both continuation and reversal patterns.

The Pauses That Refresh

The current bifurcated equity market is represented in my equity screens, with a mix of long and short setups, continuations and reversals. Here are the names that caught my attention this week:

Active watchlists, real-time positioning updates, and live portfolio tracking are reserved for members of The Collective, our premier service offering discussions on high-level theory and performance, differentiated research, and a global community of serious traders and investors dedicated to mastery. Learn more about The Collective here.

FOMC this week with market pricing in 90% odds of a 25bps hike. At this point, it’d be bearish for the market if they don’t hike 25bps. Historically, stocks falter in the 6+ weeks following the first hike in a renewed hiking cycle. Though this time the market is already pricing in roughly 65bps of hikes over the next six months, so there’s now a relatively high bar for the Fed to surprise hawkish. We cover the main drivers behind the resiliency of this cycle to higher rates and geopol shocks. I show off a new narrative tracking dashboard I’ve been building and make the continued case for long energy plays, and more.

Click here or on any of the charts to read on our site and get better image quality

***The MO port is currently up +47.21% ytd in 26’. The Collective is where we discuss the theory behind the positioning, publish the differentiated research, track the book in real time, and argue it out with a global group of serious investors. If that’s your kind of group, join us in Slack. ***

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MO Portfolio & Trades

1. The portfolio fell -224 basis points last week, leaving us +47.21% on the year, below our ytd high-water mark of +61%. We’re long Ags, energy, miners, a little ETH. Long biotech, healthcare, crypto miners, and natty producers.

2. The week ahead in data: A Fed hike is roughly 90% priced after hot core CPI, so the SEP and Warsh’s presser carry more than the move. The BoJ is about 79% priced to reach 1.25% Friday, with Washington openly pushing Tokyo to normalise faster after July’s joint yen intervention.Tuesday’s 20-year reopening lands the day before the Fed, with the 10-year near 5% and last week’s buyback smaller than the market wanted.

3. Back in early July I wrote a DD titled “High Gear: A New Economic Regime.” It covered the compression in rates, argued a breakout was near, and made the case that the break would be higher in yields. Here’s the chart I shared. Article here.

4. That thinking continues to be affirmed by the inbound data. The Philly Fed General Conditions Index (tan line) is climbing to levels last seen in the ‘21 run-it-hot economy, which suggests ISM (amber line) inflects significantly higher from here.

5. On that note, our Market Implied Macro Regime “Overheating” indicator is rising again and is now pricing in a 75% probability of an overheating regime within the next six months.

6. One of the primary reasons this economy and market have shrugged off higher rates, geopolitical shocks, and commodity shocks is in the two graphs below. We’re in a completely anomalous period in US history: massive deficits run alongside full employment. Per the Levy/Kalecki Profit Equation, those deficits translate into corporate profits. And that profit source is non-cyclical, which is where the resiliency comes from.

7. We’re also getting the boost from an aggressive CAPEX cycle, which feeds back into profits again. The hyperscalers funding that buildout treat losing the AI race as an existential outcome, so a 25bps hike does nothing to slow the spend (chart via DB).

8. On top of that, most corporate debt was termed out at generational lows in 2020-21. This hiking cycle only hits new borrowing, which is why the effective rate paid by nonfinancial corporates and households sits below the policy rate.

9. That doesn’t run much longer. The stock of debt needing to be refinanced climbs steadily and peaks in 2029. By 2031 we’re looking at roughly $300bn of additional annual interest expense, about 13% of current after-tax corporate profits — and the paper coming due by then is a quarter high yield, versus 7% in 2027.

10. Our MO Aggregate Internal indicator is likely to cross below the -60% sell signal threshold this week. Highlights mark past instances with six of those preceding 5%+ corrections, and one signal failure in 23’.

11. Additionally, my teammate Dean Christians notes in his latest brief that the RoC in the 10yr yield has triggered a sell signal, wich is a core component of his TCTM RIsk-on/off signal. Forward returns for equities were overwhelmingingly negative during similar episodes. Collective members can find his report in our Slack.

12. From GS: “Equities typically struggle at the start of Fed hiking cycles, but the market has already priced substantial Fed tightening in coming months. The S&P 500 has generated an average 3-month return of -2% at the start of seven hiking cycles during the last few decades.

“However, the S&P 500 then generated an average 12-month return of +9%, with positive returns in every episode but 2022. In 1997, for example, the S&P 500 declined by 10% alongside the Fed’s 25 bp hiking “cycle.” Stocks bottomed when the market ceased pricing additional tightening, and the S&P 500 reached new highs within three months. Today, the rates market is already pricing more than three 25 bp hikes by the middle of 2027, lifting the bar for policy to surprise in a hawkish direction. The medium-term impact of Fed tightening on equities will depend on how tightening affects earnings growth, which is the most important driver of stocks.”

13. Oracle gave an exceptionally bullish read-through on AI compute last week. OCI grew 121%, GPU utilization hit 97%, renewals and resales cleared at roughly 20% premiums, and RPO reached $664 billion. Compute is still scarce and pricing is still strong. I think the long AI / long energy barbell starts working in tandem again, though I’d widen the second leg from energy to broad commodities. The AI narrative is getting exuberant fast, though.

Which brings me to what I’ve been building. I’ve spent the past few weeks trying to quantify and codify my read of Narrative Pendulum dynamics. The partial screenshot below is V.1. I’m backtesting it now to see whether the signal holds up and whether it’s actually additive to my gut feel. So far I’m excited about it. If I adopt it, it goes into the V.2 Heads-Up Display for Collective members.

14. Oil’s cone of possibilities is widening again. Hormuz still matters, but the Red Sea is becoming the bigger swing factor as threats around Bab el-Mandeb rise and Saudi export routes come into focus. Speculators are crowded short again. We’re long and we’ll add on opportunity.

15. The monthly chart of First Trust Natural Gas Producers (FCG) continues to trade exactly as you’d hope (we’re long).

16. Crypto is once again in a tight compression regime on the daily, similar to their tape before the recent breakout. We’re watching this closely for breakout.

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Thanks for reading.

Your Macro Operator,
Alex

On August 29, in Newport, Rhode Island, Roger Federer was inducted into the International Tennis Hall of Fame. His wife Mirka introduced him: twenty Grand Slams, 103 titles, 310 weeks at world No. 1 behind him.

Two years earlier, at Dartmouth’s commencement, Federer had shared what built his legacy. “Effortless is a myth.” Behind the ease, he said, sat years the public never saw:

“There is no way around the hard work. Embrace it. You have to put in a lot of sacrifice and effort for sometimes little reward, but you have to know that, if you put in the right effort, the reward will come.”

Steve Kerr, the Golden State Warriors’ head coach, told a different story. In 2017, Draymond Green, the team’s star forward, asked Federer how he’d kept winning titles across two decades. At the time, the Warriors were building on year four of their dynastic run.

Federer’s answer was his week: breakfast with his kids, the school drop-off, two hours of practice, lunch with Mirka, dinner as a family come evening. No grind. No war stories. A man home for supper, grateful for the day, twenty years into greatness.

Both accounts are true. They’re the same career described from two different elevations.

Federer gave up a normal childhood and buried a fiery teenage temper beneath a mountain of reps without witness. But well into adulthood, the discipline that mattered most wasn’t the discipline to keep grinding. It was the discipline to stop.

Federer redefined sacrifice, rather than retired it. “Not banging your head against the wall,” as Kerr put it. Not outworking the field until his body gave out. Sacrifice became protecting what mattered by cutting what didn’t. The week he described—breakfast, the school drop-off, two focused hours, lunch with Mirka—wasn’t leisure he’d earned. It was the maintenance that kept the foundation from eroding.

Federer broke down as he turned to speak about Mirka on stage. It moved me. Because I know how close I came to declaring the school pick-ups, the family dinners, the marriage—the person who would be standing next to me in twenty years—as “the sacrifice” necessary to scale the next summit.

To me, the most impressive part of Federer’s career was not the ultimate mastery of his sport. It was knowing what not to sacrifice to achieve it.

Pullback Potential

Last week, we noted energy had the baton. This week, the sector followed through, capped off by a Friday close that sets up potential pullbacks going into next week.

October crude oil surged toward the 1x measured move target of 107 after breaking out of a 3.5-month head-and-shoulders continuation. Our Macro Ops portfolio has remained long December Brent crude all month.

November RBOB gasoline ran to within reach of its 1x measured move target of 3.3967 after completing a 3-month cup-and-handle.

Meanwhile in ags, December KC wheat is pulling back to retest the neckline of its 3.5-month cup-and-handle. We remain long in the Macro Ops portfolio.

December corn looks set for a retrace of its own back toward the 50-day SMA after reaching the 548.75 1x measured move target of its 3-month head-and-shoulders continuation. A relevant analogue is white sugar futures’ retest of the 50-day SMA this summer. We took profits on our December corn position this week and will look to reenter should a new asymmetric reward-to-risk opportunity develop.

On the weekly timeframe, corn futures have ample room for a healthy correction to play out before resuming toward the 589.25 1x measured move target of their 2-year symmetrical triangle.

December soybean oil put in a fourth test of the upper boundary of its 3-month symmetrical triangle.

Soybean meal futures spent another week pinned to the upper boundary of their 10-month ascending channel on the weekly chart, offering a logical level to define risk should a breakout occur next week.

December copper reached the neckline of its 4-month head-and-shoulders continuation, but has since hit the right shoulder low three times, setting up the possibility of a continuation failure.

The Pauses That Refresh

In a detailed report released this week, Dean Christians, our Lead Equity Market Strategist, analyzed the technical backdrop of the consumer discretionary sector. 21-day lows in the sector surged to levels not observed since the 2022 bear market. His Turning Point Report from September 10, 2026, breaks down what this means for both short- and long-term allocations.

Here are the equity names that caught my attention in this week’s screen:

Active watchlists, real-time positioning updates, and live portfolio tracking are reserved for members of The Collective, our premier service offering discussions on high-level theory and performance, differentiated research, and a global community of serious traders and investors dedicated to mastery. Learn more about The Collective here.

OpenAI’s latest Astra release is a significant event and likely swings the AI narrative pendulum back in favor of the bulls. That’s coinciding with constructive takes in the KOSPI and memory space, plus more…

Click here or on any of the charts to read on our site and get better image quality

***The MO port is currently up +49.45% ytd in 26’. The Collective is where we discuss the theory behind the positioning, publish the differentiated research, track the book in real time, and argue it out with a global group of serious investors. If that’s your kind of group, join us in Slack. ***

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MO Portfolio & Trades

1. The portfolio fell -97 basis points last week, leaving us +49.45% on the year, below our ytd high-water mark of +61%. We’re long Ags, PM miners, a little ETH. Long biotech, healthcare, crypto miners, and natty producers.

2. The week ahead in data: August payrolls printed 162k against 55k expected. September hike odds jumped to 65%, which makes Thursday’s PPI and Friday’s CPI the focus. Waller has said he would back a hold if August inflation cooperates and a hike if it does not. PPI Thursday, CPI Friday, Fed blackout throughout. 3s, 10s and 30s Tuesday to Thursday, while Treasury at least doubles its long-end buybacks from Wednesday.

3. Thursday’s PPI comes out before CPI this time, which makes it an important tell. Labor concerns are off the table after last week’s 6-sigma NFP beat, so inflation is the only thing the FOMC is looking at next week. PPI correlates strongly with CPI, and the greater the surprise, the greater the correlation.

4. The strong labor read wasn’t a surprise to us. We’ve been tracking the acceleration in the jobs market for a while now. The KC Fed’s LMCI, shown below, condenses 24 labor market series (employment, openings, hires/layoffs, earnings, hours, surveys) into an activity level and a momentum series measuring RoC. Jobs momentum is strongly inflecting higher while the activity level itself has stabilized and is starting to turn back up.

5. I saw that Barron’s latest cover is talking about the “Death of Bonds…” That’s typically not a great thing to see if you’re a bond bear. Then again, a study of magazine covers as contra signals shows that Barron’s isn’t necessarily a fade. Now, if The Economist comes out with something similar, then we’ll know it’s a good time to start loading up.

Bonds have been in a major rout though. This chart showing rolling 10yr annualized returns of bonds over the past 150 years is a doozy. Lowest reading on record.

Are we due for some mean reversion, or is this the beginning of the end for the American empire? Or something in between?

Time will tell. And while we’re not playing the bond short directly, because we don’t care to be on the other side of the Treasury, we’re quite long commodities which are moving inversely to bonds. Or vice-versa, rather.

6. Risk Exposures from GS: “US L/S Gross leverage rose +1.5 pts to 208.5% (27th percentile one-year), while US L/S Net leverage increased +0.9 pts to 48.4% (4th percentile one-year). US Fundamental long/short ratio (MV) increased +0.5% to 1.605 (4th percentile one-year).”

Short-term positioning has reset, at least amongst funds. Retail is another story. That makes the pain trade up. But like we talked about last week, there’s been quite a bit of call buying, so we could see some chop and vol before the next leg higher. Which fits with seasonality.

7. Implied and realized vols are low across the major assets (equity indices, bonds, FX). Good environment to buy some optionality and be long some vol.

8. This one is concerning, from GS: “we just traded through the lowest realized correlation period in recent history … realized correlation across SPX over the last six months is 11, only two periods in the last 25 years have seen corr this … Feb 2007 (senior yr college) and Jan 2018 (just before “volmageddon”) … history book suggests levels this low are not sustainable and have ended in a starburst of index vol convexity (caveat “past performance is not indicative of future returns”).”

Maybe this time will be different?

9. My teammate Dean Christians made this noteworthy observation in a recent note:

“Another group that caught my attention is the S&P 1500 technology hardware & equipment industry group, where the BB spread fell to a new year-to-date low this week as the index continues to form a triangle pattern. The group includes several of the memory names, which makes this compression particularly interesting to me.

“These stocks have started to act better, and if a year-end rally develops as seasonality shifts from unfavorable to favorable, this could be a group worth owning. As a reminder, compressed volatility doesn’t predict future direction, but as a general rule, markets tend to resolve in the direction of the previous trend.”

10. Whether we’re talking about tech hardware & equipment, the South Korean KOSPI, or MTUM, we’re really talking about one thing: memory. The DRAM/NAND chip companies have become the heavyweights in their respective indices. The KOSPI has recovered off its lows following a roughly 40%+ peak-to-trough decline and broke out of its recent compression last week.

Not a bad setup for a tactical trade to get long.

11. Emphasis on the tactical, because the pavlovian margined dip buying from SK investors makes me uneasy. This was the shallowest “deleveraging” event in SK history and half of it has already reversed. That’s late-cycle behavior. But late-cycle behavior goes on longer than most think.

12. I think last week’s release of OpenAI’s latest Astra model is a significant event in terms of Narrative Pendulum dynamics, similar to the Claude Mythos non-release that kickstarted the rally in AI/semi names at the beginning of the year. Astra seems to be a step function improvement and we’ll likely see the AI pendulum swing back into full swing bullish soon.

We’re considering going long DRAM and select cryptominer/AI compute plays here. Chart from Arc Price (link here).

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Thanks for reading.

Your Macro Operator,

Alex

Alix Pasquet III, who runs the boutique hedge fund Prime Macaya Capital Management, spent part of an AMA this week promoting massage guns, cold plunges, and a foam roller shaped—in his words—like a torture device. A casual attendee would have interpreted it as a wellness tangent. It wasn’t.

His point: physical tension amplifies emotional tension. Emotional tension amplifies mental tension. A tight jaw dominoes into a tight read on the market. He’s watched hedge funds go through periods so tense they lose the ability to think beyond the next hour, pinned to their screens, unable to hold a position long enough for the original thesis to pay out.

He learned this lesson personally. After shutting down his first fund in 2008, he hired a coach and spent six months reviewing every email, every trade, every decision from the stretch between ’06 and ’08. The finding had nothing to do with managing positions. It had everything to do with managing stress. He’d been running tense the entire time and never noticed the cost until someone reflected the transcripts of his own behavior back to him.

Prolonged tension, as Pasquet views it, is the enemy of career longevity. But he then turned right around to complicate the clean version of his own point: a debate between a bull and a bear—tense enough to turn heated—forges alpha. The resolution of this acute tension, not its absence, births insight.

So not all tension is created equal. There’s the tension you carry unresolved into tomorrow’s session, because you never decompressed after today’s close. And there’s the tension generated on purpose, between smart people with divergent viewpoints, that exists to be spent productively right there in the room.

The first type compounds against you. The second type fuels breakthroughs.

A leader’s job, he said, is knowing how to create productive tension and how to dissipate negative tension. Most of us are adept at manufacturing pressure: the hard question, the devil’s advocate, the position size that unmasks true conviction. Few of us are as skilled at the release—at decompressing before the next session starts, rather than carrying Tuesday’s debate, unresolved, into Wednesday’s open.

Ask which tension you’re holding right now. Then book it: the conference room, or the steam room.

Energy with the Baton

Agricultural commodities dominated the end of August into the turn of the month. Corn futures reached the 548.75 1x measured move target of their 3-month head-and-shoulders continuation on Wednesday.

November rice futures inched higher following last week’s successful retest of the breakout boundary.

Soybean meal futures remained pinned to the upper boundary of their 10-month ascending channel on the weekly chart.

Other areas of the ag complex weakened, including December KC wheat, which spent much of this week retracing its initial breakout from a 3.5-month cup-and-handle.

December cocoa also sold off back toward the boundary of its 1.5-month cup-and-handle-like consolidation.

As did December oats, following last week’s breakout from its 3-month multi-point trendline.

Meanwhile, December crude oil broke out on Tuesday from a 3.5-month head-and-shoulders continuation, and is now hovering just above the breakout level.

The continuation chart displays a 5-month multi-point trendline dating back to this past April.

And November RBOB gasoline completed a 3-month cup-and-handle on Monday and is also hovering just above its breakout level. Energy has the baton. Let’s see if it will be the next to fly—or to fail.

Copper continuous futures are still consolidating below the upper boundary of a 3.5-month cup-and-handle on the daily.

In currency markets, EUR/AUD is at an inflection point for what has become a 5.5-month descending triangle.

EUR/GBP completed its 1-month head-and-shoulders continuation on Wednesday and is now pushing into the support levels from earlier this year that may act as resistance.

The Pauses That Refresh

Here are the equity names that caught my attention in this week’s screen:

Active watchlists, real-time positioning updates, and live portfolio tracking are reserved for members of The Collective, our premier service offering discussions on high-level theory and performance, differentiated research, and a global community of serious traders and investors dedicated to mastery. Learn more about The Collective here.

Agriculture remains our focus. This El Niño is arriving faster than almost all comparable events on record, while global temperatures continue to provide a strong 12-month lead on food prices. The Bloomberg Agriculture Index posted a strong monthly close in August, and history suggests this trend may only be getting started. Finally, we lay out the long setup in Brent crude.

***The MO port is currently up +50.37% ytd in 26’. The Collective is where we discuss the theory behind the positioning, publish the differentiated research, track the book in real time, and argue it out with a global group of serious investors. If that’s your kind of group, join us in Slack. ***

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MO Portfolio & Trades

1. The portfolio fell -53 basis points last week, leaving us +50.37% on the year, below our ytd high-water mark of +61%. We’re very long Ags, PM miners, a little ETH. Long biotech, healthcare, defense, and natty producers. Short Dow and copper.

2. The week ahead in data: Payrolls arrive Friday. ISM, ADP, and Challenger data come first, so Friday is more likely to confirm an already positioned market than deliver a major surprise. Warsh’s Jackson Hole remarks lifted the odds of a Sep hike to roughly 50%. Consensus expects 45,000 payroll gains and unemployment to rise to 4.2%

3. The end of August gives us a new set of monthly charts to review and assess what the tape — bar by bar — is telling us. The SPX monthly chart is below. Aug delivered a new all-time closing high and a breakout from its outside-inside-inside wedge compression. The month also closed just above the midpoint of its range, leaving a decent-sized upper wick

What does that tell us?

New all-time monthly closing highs are bullish: a trend in motion tends to remain in motion roughly 80% of the time. At the same time, the small body and large upper wick signal some indecision and a reluctance among bulls to press here. That suggests volatility and indecision may persist through September before the market retests or breaks above its August highs.

4. SPX is trading within a Bull Volatile SQN regime, within a sideways consolidation on the daily. While the path of least resistance remains higher on the primary trend, the current data read suggests a small washout below its current range is likely before the next leg up.

5. This aligns with the cycle composite for the SPX, where seasonality is quite bearish over the next month. The market, of course, doesn’t have to follow this pattern, and while I don’t expect a severe selloff, the rest of the data is telling me that we should expect some downside over the next few weeks.

6. Our preferred short-term measures of breadth momentum are the McClellan Oscillator and Summation indices below in red. Both are currently rolling over.

7. Which is what we’re also seeing in the % of members above their 200 and 50-day moving averages. Again, this isn’t the breadth profile of a terminally ill market. Just one that is losing some steam and likely needs a small flush to build up energy for the next leg higher.

8. Some highlights from the latest prime broker sentiment and positioning reports from GS and DB:

• Defensive shift: Hedge funds moved to the fastest U.S.-equity net selling since Liberation Day, taking net leverage to a one-year low; selling hit tech, cyclicals, utilities, and real estate.

• Systematic positioning is still stretched: DB puts it at the 82nd percentile since 2010, with vol-control exposure at a 100th-percentile historical maximum—limiting further buying and raising downside flow risk if volatility rises.

• Calm index, fragile internals: SPX/VIX remains contained, but high-beta momentum and TMT/AI baskets have sold off sharply, exposing crowding and factor-volatility risk.

Overall, the picture is pretty mixed, positioning-wise. Q3 buyback blackout window begins on 9/15 for roughly 40% of the SPX’s market cap, pulling an important layer of support for this market during its worst two-week period of the year, according to GS.

9. But SPX call/puts suggest some complacency.

10. SPX 30-Day ATM IV at 11.7 is near the lowest levels of the past two years — only the Dec 2024 low vol period was cheaper, briefly touching ~9.7. So not a bad time to buy a little protection for your long book.

11. We remain primarily focused on the Ags trade. The El Niño temperature-anomaly index (red line) has historically led global food prices by roughly 12 months, and it is now accelerating sharply (h/t Variant Perception). The second chart shows that this El Niño is arriving faster than almost any prior event on record.

12. The BBG Agriculture Spot Index put in a large monthly bar which closed on its highs, following a breakout from a major multi-year compression regime. This is a very bullish chart.

13. My teammate Dean Christians shows (link here) that when Ags get moving, they can really move. And on a 2yr rolling basis, this move has a long way to go to match previous bulls.

14. Someone sent me Papic’s latest slide deck, and I strongly agree with his Brent view in the slide below. Global inventories will need to be rebuilt, while Chinese crude imports have likely bottomed — removing a key headwind that has helped cap prices since the war began.

Meanwhile, the conflict appears to be entering another escalatory phase, as Iran increases its use of kinetic leverage in an effort to pressure Trump ahead of the midterms. Positioning remains heavily short, the December contract is nearing a breakout to new highs, and we are entering a seasonally strong period. And calls are cheap.

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Thanks for reading.

Your Macro Operator,

Alex

Which is easier to change: who you are, or how you trade?

I met a trader this summer who had never thought to ask.

His strategy had a proven edge. Yet his execution kept breaking. So he concluded: I am the problem. And he set about repairing himself: a journal, a meditation app, a trade checklist taped to his monitor.

But all this work on the man had left the strategy unexamined.

The strategy demanded snap decisions. His temperament was measured and introspective.

The strategy carried risk overnight. His children needed him present at dusk and dawn.

The strategy financed seven losers with three winners. Those seven once added up to his rent; they now add up to months of mortgage payments.

This trader did not have a discipline problem. His repairs kept failing for a different reason: he wasn’t broken. His strategy was written for someone else. Someone else’s temperament, someone else’s hours, someone else’s life.

No amount of journaling alters a strategy cut for someone else. And even a true fit today carries an expiration date. The strategy that matched 14 hours of unbroken screen time at twenty-eight collides with career, children, sleep at thirty-eight.

I have refit my own trading more than once: new work, new priorities, a growing family, fuller days. Each time, the temptation was to grip the old playbook tightly, and double down on my discipline. Each time, fighting who I had become, I began to fray.

Before declaring yourself the problem, audit your strategy’s fit—the direction it requires you to move, and the direction your life wants to move.

For me, the fraying resolved the same way: I stopped believing I needed to become someone else.

It was the strategy that needed to change.

All One Trade

The rally in agricultural commodities powered ahead this week. Advancing past 70% of their 1x measured move target at 548.75, corn futures pushed further out of a 3-month head-and-shoulders continuation pattern.

On the weekly timeframe, corn futures are now halfway to the 1x measured move target of the 2-year symmetrical triangle featured in last week’s issue. We are long the December contract in the Macro Ops portfolio.

KC wheat futures broke out midweek from a 3.5-month cup-and-handle. A 1x measured move target sits at 897.5. The Macro Ops portfolio holds a long position.

Oat futures also broke out midweek from their 3-month multi-point trendline.

November rough rice retested last Friday’s breakout to start the week before pushing higher.

December cocoa futures, featured in the last issue, broke out on Thursday from their 1.5-month cup-and-handle-like consolidation. We are long in the Macro Ops portfolio and added on confirmation of strength.

Since May, we have monitored the primary trend shift in soybean meal futures in search of a clean daily entry pattern. Although no daily setup has developed, price action has returned to the upper line of its 10-month ascending channel on the weekly chart.

Still rangebound, soybean oil futures reversed off the lower boundary of their 2.5-month symmetrical triangle after forming three long lower wicks at support.

Coffee futures continue to consolidate midrange following a false breakdown this past spring and a range reclaim to start the summer.

Copper has been a choppy and challenging market this year. Continuous futures have formed a 3.5-month cup-and-handle on the daily.

And October RBOB gasoline continues to flirt with completing a 3-month cup-and-handle.

Cross Currencies

The double bottom in EUR/AUD, first featured in the May 16, 2026, issue, is returning to test the 1.61328 level in what may have morphed into a 5.5-month descending triangle.

Strength in the Australian dollar also has AUD/JPY on the verge of breaking out from a 5.5-month rectangle.

EUR/GBP has formed a 1-month head-and-shoulders continuation on the daily.

And EUR/CAD continues to consolidate inside a 4-month ascending triangle.

The Pauses That Refresh

Demonstrating continued relative strength despite weakness across the Nasdaq, featured breakout Roper Technologies (ROP) pushed higher out of the pennant structure noted in the last issue. ROP price is now two-thirds of the distance to its 1x measured move target of 447.05.

Here are the names that caught my eye in this week’s equity screen:

Active watchlists, real-time positioning updates, and live portfolio tracking are reserved for members of The Collective, our premier service offering discussions on high-level theory and performance, differentiated research, and a global community of serious traders and investors dedicated to mastery. Learn more about The Collective here.

But we’ve entered a period of weak seasonality that runs through mid-October. Short-term breadth deteriorated last week, and rotation is picking up under the surface. Trend continues. Chop and vol come with it.

Ags broke out from their tightest monthly compression in 30-plus years. We’re long and buying, for reasons outlined below. The DXY triggered a significant sell signal — historically a precursor to poor returns. The pound is setting up for a major breakout amid bearish positioning. Natural gas producers are showing constructive tapes. And that’s just the start.

***The MO port is currently up +51.43% ytd in 26’. The Collective is where we discuss the theory behind the positioning, publish the differentiated research, track the book in real time, and argue it out with a global group of serious investors. If that’s your kind of room, join us in Slack. ***

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MO Portfolio & Trades

1. The portfolio rose +680 basis points last week, leaving us +51.43% on the year, below our ytd high-water mark of +61%. We’re very long PMs and miners, EUR, MXN, and ETH. Long biotech, healthcare and defense. Long corn and KC wheat. Short dow.

2. The week ahead in data: Wednesday’s a big day — PCE in the morning, NVDA earnings after the close. Friday brings Warsh’s keynote at Jackson Hole.

3. We closed our ultra bond short last week for a small gain. We don’t care to fight the administration. Bessent’s announcement mattered less for the mechanism than for the signal: Treasury doesn’t want a higher long end, and it’s willing to act.

We may re-engage down the road. For now we’re shifting focus to other ops — Ags chief among them. The Bloomberg Ags index just broke out of its tightest monthly compression since ‘95, which preceded a significant bull trend. Also, this setup looks nearly identical to the one we play in the BBG BCOM Index last year (link here).

Last week I interviewed a former MO teammate, now a SpaceX meteorologist, on the inbound Super El Niño. He’s an extremely sober guy, not prone to hyperbole. When he tells me the data points to the most significant El Niño since 1877 — an event that killed roughly 4% of the world’s population through drought and famine — I listen.

Markets are horrible at pricing extreme, anomalous events beforehand. Ags are set up for a major bull market. We’re long and buying.

The interview transcript is available for Collective members in the Slack and Research area.

4. Even without the El Niño tailwind, Ags were already setting up for a bull market — they’re simply following the Commodity Relay, a concept I first saw from Martin Pring. Precious metals kick off a commodities bull market, then industrial metals, then energy. Ags pull up the rear.

5. Positioning has shifted recently, but on an aggregate basis it’s still neutral.

6. Our lead technical analyst, Mike G, broke down the classical charting setups we’re seeing across the space in his latest weekly (link here). Below is corn — we’re long.

7. Cocoa’s another name on our target list for an entry. It’s coiling within a broader uptrend.

8. My teammate Dean Christians flagged this in a recent note: his Trend Composite just flipped negative on the DXY, triggering a sell signal. Similar signals have historically preceded poor forward returns for the dollar.

9. We’re long EUR and MXN, and looking to add GBP. The pound’s been compressing for 12-plus months in a rectangle regime, with price nearing the upper bound of that consolidation.

10. 3-Year Spec positioning is coming off the 0th percentile — past instances have tended to mark major bottoms.

11. Speaking of the pound: the FTSE 100 futures are giving us a pullback reversal off the lower daily band within a Bull Quiet regime. Clean technical inflection point to add size with little risk.

12. We remain bullish the broader trend in risk assets — that’s what the weight of the evidence suggests. Dean’s TCTM Risk-Off model recently fell back to zero. Not bearish.

A few measures of short-term breadth did weaken last week, and we’re heading into a period of weak seasonality through mid-October. Things likely hinge on whether bonds take out Bessent’s line or reverse here. Positioning in VIX futures is also stretched, which historically precedes higher vol. Base case: trend up, vol up, rotation continues.

13. Summary notes from GS’s latest Prime Services positioning report:

Positioning turned defensive fast: hedge funds shifted from buying to the fastest US-equity net selling since Liberation Day, cutting net leverage to a one-year low; selling was broad and concentrated in tech, cyclicals, utilities, and real estate.

• Index calm understates fragility: SPX/VIX remained relatively contained, but high-beta momentum and TMT/AI factor baskets suffered sharp drawdowns, signaling elevated under-the-hood crowding and factor-volatility risk

• Rates and growth are the key macro risks: rising long-end yields, curve steepening, policy uncertainty, and weakening signals from major consumer companies are pressuring duration-sensitive equities and raising concern over the consumer backdrop.

• Sentiment is cautious, not panicked: flows are described as broadly benign and positioning cleaner after de-grossing, while investors are adding gold/index hedges and chasing crypto; a bond rally could trigger meaningful CTA short-covering.

14. First Trust Natural Gas ETF (FCG) broke out from a major compression regime — its tightest since ‘13, which preceded a significant 12-plus month bull rally. We’re long and buying here.

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Thanks for reading.

Your Macro Operator,

Alex

My wife has a skill I envy. Through a closed bedroom door, she can tell one of our daughter’s cries from another. Tired. Hungry. Hurt.

And because her recognition arrives instantly, her response can be total: she sprints for the cry that means hurt; she settles back into her chair, with no more than a glance at the monitor, for the cry that means tired.

I struggle with this recognition. So I decide in advance: today, I will heed every cry to ensure our daughter is safe. The next: I will wait and watch, reminding myself that our daughter’s crying is normal.

No course taught my wife her ear. Seven months of unremarkable hours did. And now, the same woman responds with total conviction one moment, and patient flexibility the next.

Conviction and flexibility, I now see, are not in opposition. They rise together, both rooted in intimacy.

We imagine that to hold a market view with conviction means to grip it tightly, while to hold it with flexibility means to keep our distance.

But conviction without intimacy is stubbornness.

Flexibility without intimacy is ambivalence.

You can only hold a view when you trust yourself to recognize—within a few cries, or a few bars—what you are hearing. Absent that trust, you are forced to decide in advance.

How intimately do you know what you are holding? The market is on the other side of the bedroom door. Its cries will, at times, require a sprint. At others: no more than a glance.

Log the unremarkable hours. I am.

May we each learn to recognize which cry is which.

Commodity Supercycle

Earlier this week, Macro Ops Team Lead Alex issued a report on the developing Super El Niño—the most significant climate event in 150 years. In an interview with a Collective member and SpaceX meteorologist, they detailed how this climate shock will disrupt agricultural commodity markets, especially sugar, rice, cocoa, coffee, and citrus. This essential reading aligns with many of the strategic positions currently in our book.

White sugar futures came within spitting distance of the 2x measured move target of 567.1.

Corn futures broke out from a 3-month head-and-shoulders continuation on Monday. We are long the December contract in the Macro Ops portfolio.

Price is now testing the upper boundary of a 2-year symmetrical triangle, threatening a breakout.

November rough rice capped off the week by breaking out from a compact, 1-month ascending triangle.

Coffee futures continue to consolidate midrange following a false breakdown this past spring and a range reclaim to start the summer.

December soybean oil continues to coil inside a 2.5-month symmetrical triangle following the strong uptrend that opened the year.

December cocoa is testing an established trendline of a cup-and-handle-like consolidation.

Outside of agricultural commodities, October RBOB gasoline is nearing completion of a 3-month cup-and-handle.

After pausing last week, gold futures extended the trendline breakout featured in the August 8, 2026, issue, recapturing roughly half the decline that occurred across the first five months of the year. We continue to hold our Micro Gold futures long in the Macro Ops portfolio, which we initiated on the initial August 5 breakout.

In last week’s issue, we featured the laggard metal, platinum, and the 1798.3 level that served as a key pivot for potential upside continuation. Price closed above that level on Wednesday, and has thus far followed through.

September Mexican peso futures continued to climb following their breakout from a 6-month cup-and-handle. We remain long in the Macro Ops portfolio.

British pound futures are pressed right up against the upper boundary of a 1-year symmetrical triangle.

The U.S. Treasury announced on Wednesday plans to double its buyback operations for longer-dated bonds in the upcoming quarter. Following a brief consolidation below resistance, U.S. dollar futures dropped sharply in response. The move carried price about two-thirds of the way to the 97.95 range midpoint—the initial target highlighted in our August 1, 2026, issue.

Analogues in Action

On Tuesday evening, I shared on X an analogue that had struck me: Ethereum on the weekly timeframe was coiling directly along the bottom boundary of its 2-year ascending triangle, following a breakdown in June that had failed to follow through.

In recent issues, we have been tracking the range reclaim of a similar false breakdown from a massive weekly range in coffee.

As I stated in the post, the first target of a range reclaim is the range midpoint, where coffee sits now. The second: the range’s opposite boundary.

My expectation was for Ethereum to close the week above the last swing high at roughly 1,980, confirming the reclaim.

I did not expect Ethereum to run over 30% into Friday’s close, colliding with its 365-day EMA. Fortunately, we’ve been long Ethereum in the Macro Ops portfolio since mid-July, and took this week’s surge as an opportunity to peel off partial profits.

As with coffee, a consolidation here would not be uncommon. Should one appear, the next target becomes the upper boundary at roughly 4,800.

The Pauses That Refresh

Featured on the July 25, 2026, active watchlist, Roper Technologies has demonstrated notable resilience after breaking out of a rectangle bottom, consolidating into a tight flag above both the upper boundary and its 200-day EMA.

Here are the additional names that caught my attention in this week’s equity screen:

Active watchlists, real-time positioning updates, and live portfolio tracking are reserved for members of The Collective, our premier service offering discussions on high-level theory and performance, differentiated research, and a global community of serious traders and investors dedicated to mastery. Learn more about The Collective here.

Long bonds are dancing on a significant level. Momentum’s cheap now (relatively) and looks to have put in a durable low. This El Nino is shaping up to be a once-in-200-year+ weather event, and the market isn’t pricing it right. We look at a few Ags as a way to play it. Then we close with a bonus chart on gold miners showing a 100% 6-month hit rate, plus more.

***The MO port is currently up +44.6% ytd in 26’. The Collective is where we discuss the theory behind the positioning, publish the differentiated research, track the book in real time, and argue it out with a global group of serious investors. If that’s your kind of room, join us in Slack. ***

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MO Portfolio & Trades

1. The portfolio rose +147 basis points last week, leaving us +44.63% on the year, below our ytd high-water mark of +61%. We’re long PMs, EUR and MXN, short long bonds, short dow, long ETH and short BTC, long tech, semis, robotics, biotech, and defense.

2. The week ahead in data: quiet until Jackson Hole.

3. Ultras are dancing on their ‘23 swing low. Next week or two should tell us if this breakout holds. We’re short, waiting on further confirmation to add.

4. SPX is in a strong uptrend off its compression breakout. Flipped into a Bull Volatile SQN regime last week — these produce some of the sharpest rallies, and some of the bigger tops. Stay on your toes.

5. Our preferred short-term breadth measure, the McClellan Summation Index and Oscillator, isn’t blowing the doors off, but it’s positive and moving the right direction. For now.

6. S&P 500 / 1500 advance-decline lines keep leading price. This is not bearish.

7. From GS: “Overall book Gross leverage -0.2 pts to 299.5% (44th percentile 1-year) and Net leverage +0.7 pts to 78.2% (45th percentile 1-year). Overall book L/S ratio +0.6% to 1.707 (45th percentile 1-year).”

Short-term positioning and sentiment still support risk assets. Longer-term measures — BofA Bull-Bear below, NYSE Margin YoY — show froth.

8. Momentum’s come off its historically crowded levels — still elevated, though — while relative valuation has fallen to the 4th %tile. Same picture as positioning: short-term bullish on momentum and risk assets, but the intermediate-term and out keeps getting tougher.

What to do?

Keep it tactical. Read: nimble and light.

9. Memory ETF DRAM looks to have put in a durable bottom. We’ve got a small long and will add above this recent horizontal level. Tactical position, nothing more.

10. Historically, I’ve been dismissive of grave weather warnings and their market impact. That’s served me well — most of the time it’s just doomers talking their book. But we’ve got a genuinely no-BS meteorologist in the Collective, Steve, and hyperbole isn’t his style. So when he posted in Slack that “Latest observations and models have have gone bonkers - now forecast to be the strongest EL-Nino in 200 years,” my ears perked up.

If you’re not caught up on what’s coming weather-wise and what it means for markets, here’s a recent video presentation from Hacket, plus the slide deck.

I’ll be interviewing Steve later today and sharing my notes with the Collective.

11. Sugar looks like one of the markets most poised to benefit from this multi-generational weather event. Mike G called the setup in his latest weekly (link here): “In the August 1, 2026, issue, we highlighted White Sugar futures’ retest of the 50-DMA. This week, price hit the 3-month symmetrical triangle’s 1x measured move target at 514.3.”

We’ll be buying on any pullbacks.

12. Maybe it’s the unending war, the SoH that keeps not opening, DM fiscal largesse, or now El Nino — but Ags and commodities broadly have great long-term charts. Here’s the setup in KC hard wheat: price breaking out of a multi-year inverted H&S bottom.

Also, the BCOM Index (BCI etf) is bull flagging on the monthly. May be time to get long for the second leg up.

13. Bonus chart from our new teammate Dean Christians of TPMR. I’m no stats guy, but a 100% hit rate on miners, 6 months out — that’s bullish, no?

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Thanks for reading.

Your Macro Operator,

Alex