Near-term path: low conviction in either direction. A new BofA Sell Signal just triggered, and our Liquidity indicator remains well below 50%, which has historically weighed on forward 3-month returns. We’ll let the tape lead. Separately, our crypto shorts saved the book last week. We took partial profits near Friday’s close. BTC and ETH are sitting at significant support and deeply oversold — how they react here matters. We also pitch two equity names on our target list.

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. The portfolio ended last week up +80bps, bringing year-to-date returns to +45.6%, which is below our YTD NAV high of +61%.

Current positioning: elevated cash, select beaten-down software, healthcare, and cybersecurity names; short ETH, BTC, SOL; long the Bloomberg Commodity ETF; long solar; a handful of idiosyncratic equity positions.

2. The short crypto trade that we’ve been writing about — and participating in — for the past month, saved our book last week with our short ETH, BTC, and SOL trades making up for our losses in equities. We took partial profits near the close on Friday and now have some tough trade management decisions to make. ETH is at its lower weekly band as well as multi-year support along the significant 15k level.

3. RSI on both weekly and daily timeframes has dropped to historically significant oversold readings.

4. There have been seven instances (including last week) when the daily RSI fell below 20. In four of them, ETH was trading higher 50 days later, with an average gain of +25%. .

5. We’ll see how the crowded long CoT positioning shifted when Friday’s updated report drops. Sentix’s BTC Sentiment index is near its lowest reading in two years.

6. If you’re not reading Mike G’s weeklies, you’re missing out. His latest covers the chart below alongside a study on gambling and neuropsychology — a real banger (link here).

On the chart: we closed our NQ long last week out of respect for risk management. I don’t think the trend is over — strong momentum tends to beget more momentum — but my conviction is low. What I do have increasing conviction on is that we’re late cycle. I’m seeing it in our long-term positioning metrics, in the technicals, and now in macro data flagging a late-cycle Overheating regime.

This isn’t immediately actionable. Late cycles can persist for months, even years, which makes them among the hardest regimes for our style to navigate. The good news: there are better opportunities outside the crowded AI trade. We’ll continue to play the trend with tight risk, but most of our focus is shifting elsewhere.

7. From @sunchartist, a technician I respect:

“Semi’s have all the hallmarks of exhaustion throwover. The exponential rally is more pronounced on the Weekly charts. Last week formed a bearish inverted hammer reversal on higher volume, with the highest RSI reading on record. If this is indeed a trend reversal or establishing a higher trend channel, we are about to find out.”

8. Historically, when weekly RSI on semis climbed above 80%, it preceded higher prices over the subsequent 13 weeks on average — before rolling over. In 5 of 5 instances, semis traded lower over the following 35 weeks, with an average forward 50-week return of -12.76%.

9. Here’s @spotgamma on Friday’s action:

“When someone answers “What do you think triggered the big stock market selloff Friday?”

They will come up with a large list of narratives, none of which mention positioning: People were choking on calls on Thursday, and purging all those calls on Friday.

ex: $SMH (pink) went from top right on this chart on Thursday (calls priced higher than puts in the +90% %’ile), to puts and calls being equally valued (i.e. center of chart).

Then look at how expensive QQQ options were INTO the Friday vs SPY (Y axis). Tech heavy Qs were massively overvalued related to SPY as everyone over-FOMO’d tech.

Positioning needed a reset.”

10. A few weeks ago we wrote about the coming tidal wave of new equity supply from mega IPOs and its historically bearish implications for equities over the following 12-24 months (link here).

Alphabet’s recent $84.7 billion equity raise adds a new data point. Cash-rich giants don’t sell stock — they buy it back. When Alphabet reversed a two-decade pattern to externally finance an AI build-out, it echoed a familiar sequence: a serial cash-returner pivoting to fund a demand-boom capex cycle. History has not been kind to that pattern. Telecom/fiber in 2000: -18% twelve months later. Energy in 2008: -31%. Four of five analogs since 1929 saw the S&P lower a year out, with mean forward returns of -17% at 12 months and -25% at 24.

The caveats are real: these tops took time to form (returns were flat-to-positive at 1-3 months), the sample is small (N=5, judgmentally dated, with 2014 shale a clean outlier), and capex itself has been priced for two years. Read this as weight-of-evidence, not a tradeable signal. The tell isn’t the surge in capex. It’s how it’s now being financed.

11. Another BofA Bull/Bear Sell Signal fired last week while our Trend Fragility indicator climbed to 76%, unphased by Friday’s selloff. Again, my bias is that markets trade a bit higher in the short-term (low conviction on this one) but I think we’re setting up for a larger Summer selloff.

12. We’ll keep updating this weekly DXY chart until we get a breakout. Likely putting on a small starter long this week.

13. The constructive action in DXY is being driven by rising yields. 5-year Notes broke their triangle compression last week. Our positioning measure shows speculators near max crowded long levels.

14. We’ve been flagging the healthcare setup for several weeks and have been slowly adding exposure. ISRG is a name we’re doing DD on.

The bull case: ISRG is the entrenched leader in robotic surgery with a dominant installed base and high switching costs. Revenue is increasingly driven by recurring instruments, accessories, and service — now over 80% of sales. Da Vinci 5 and SP are driving higher revenue per procedure. International expansion (including new Japanese reimbursement starting June 2026) and continued double-digit procedure growth underpin a 10-15% revenue CAGR with expanding margins and strong FCF. The buyback program is active: $2.3B repurchased in 2025, a $9.08B multi-year program completed in Q1 2026, and a new $5B authorization approved in May 2026.

The monthly chart: if ISRG holds its lower band — a level that has marked significant lows multiple times over the past decade — and closes the month strong, that’s technical validation for the bull thesis.

15. Over the weekend I drove past a Texas Roadhouse outside San Antonio. Packed parking lot on a Saturday. A family member said it’s always that way.

The bull case for TXRH: one of the few scaled casual-dining chains with consistently positive traffic, strong value perception, and best-in-class unit economics. They’ve put up 60+ consecutive quarters of comp growth and continue to take share in the steakhouse category, supported by resilient mid-income dining demand, easing beef costs, and improving throughput. Dividend recently hiked to $0.75/quarter. The board approved a new $500M buyback in February 2025; they’ve deployed roughly $150M of it through 2025 and continued buying in Q1 2026.

The monthly chart is compressing nicely. This looks like it’s setting up for a significant move.

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,

Alex

In 1994, the University of Iowa produced the Iowa Gambling Task—now a cornerstone of neuropsychology—reshaping how we understand decision-making under risk.

Participants chose cards from four decks, aiming to maximize play money. Two groups played: healthy individuals, and those with damage to the ventromedial prefrontal cortex—the region that converts past emotional experience into anticipatory gut feeling.

When a healthy human loses money or makes a mistake, their amygdala fires and the vmPFC tags that feeling as a subtle signal that resurfaces when they face similar risk again.

Two decks offered high immediate rewards but large, unpredictable penalties; two offered smaller rewards but smaller penalties—the superior decks over time. Both groups had to discover this through trial and error.

The vmPFC-damaged group had no anticipatory emotional memory. Every time they looked at the four decks, it was as if they were seeing them for the first time. Without gut feeling pulling them away from the dangerous decks, they relied purely on short-term arithmetic. And they chose the dangerous decks time and again, repeatedly surrendering their winnings.

The healthy group followed their gut and came out ahead.

Mainstream Wall Street wisdom preaches just what the damaged cohort did: cold, memoryless execution.

“Trade the market in front of you, not the one in your head.”

“Be like a goldfish.”

The Iowa Gambling Task suggests this is not wisdom. It is a disability.

As artificial intelligence proliferates across all sectors—not least finance and trading—a new cohort of participants is entering markets: those with superhuman ability for calculation, logic, and cold-blooded rationalism.

What they have no access to: self-awareness, discernment, gut feel.

Some of the smartest money knows this. Last September, D.E. Shaw—which for over 30 years pioneered quantitative investing by treating the market as a massive data-processing problem—quietly raised five billion dollars for its first purely discretionary, human-led hedge fund.

The Wall Street mantras may not be entirely false. They may simply be incomplete.

Don’t trade the market in your head. Trade the one in your gut.

Bend with the Trend

Equities, spearheaded by the Nasdaq, appeared positioned for further gains until Friday’s strong U.S. employment data revealed a surprisingly robust economy. The shift extinguished expectations for rate cuts and reignited concerns about future rate hikes.

Consequently, a Bearish Engulfing pattern emerged, wiping out the advances made during the preceding week.

In accordance with the principle that Price is Truth—the first rule of This Infinite Game—we closed our Nasdaq long position this week as the trend began to shift.

Adhering to the trend is a core component of our process, as evidenced by various examples within our Macro Ops Portfolio and previous issues of this report.

While this move signals a shift, it is not a cause for alarm. Following a strong run of eight positive weeks out of nine since the April low, the market may simply be entering a phase of digestion.

This pause could facilitate a transition where other sectors take over leadership from the AI trade. The future outlook depends on the nature of this correction: whether it manifests as a price decline that drags down other risk assets, or a time-based consolidation that allows for a healthy rotation.

Our commitment to bending with the trend is further illustrated by our coverage and positioning in Coffee Futures.

In April, we identified a potential upside reversal at a long-term support level; however, as that support failed to hold and the reversal attempt stalled, we adjusted our stance.

Consequently, we have maintained a short position in Coffee since the middle of May.

Another case in point is Ethereum.

Throughout the first quarter, ETHUSD battled to maintain its footing at a multi-year trendline that has served as a reliable floor for price pullbacks since 2022.

Early signs of accumulation appeared on the daily charts as buyers attempted to defend this key support level, prompting us to initiate several long positions within the Macro Ops Portfolio.

However, by Q2, the bullish momentum began to wane.

Recognizing that the prevailing trend was shifting, we adjusted accordingly: we flipped our bias to short last month and secured partial profits during last week’s sharp downside break.

In addition to our short ETHUSD position, our Macro Ops Portfolio has maintained short exposure to both BTCUSD and SOLUSD.

We used this week’s break to peel off profits in these positions as well.

Note the significance of this week’s breakdown. This is the first time in four years that this trendline has failed to act as support.

For the previous two weeks, I highlighted a Symmetrical Triangle forming in July Soybean Futures. While my default expectation for consolidation patterns is a continuation of the prior trend—which, in this case, suggested a measured move higher—the market had other plans.

This Tuesday, price decisively breached the pattern’s lower support boundary. This breakdown provided a clear, risk-defined entry to the short side. Since that break, an impulsive decline has already carried price roughly two-thirds of the way toward its downside objective of 1095.50.

Our Macro Ops Portfolio managed to edge higher this week, successfully weathering the risk-off environment.

This resilience was a direct result of our commitment to bending with the trend and respecting price as the ultimate truth.

Despite entering the period with material exposure to various AI and Tech holdings, as well as a long position in the Nasdaq, adherence to our process ensured we remained on the right side of the tape.

The Pauses That Refresh

Should market breadth widen beyond the AI theme, there are a number of consolidations occurring at or near all-time highs.

Here are the names that caught my eye this week:

Active watchlists, real-time trade alerts, 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.

One thing worth stating plainly: we are in one of the most consequential technology revolutions in history. That is not an earnings forecast or a valuation argument — it is an observation about the secular backdrop. From a Narrative Pendulum standpoint, the “singularity” narrative carries some of the most powerful trend-extension properties we’ve seen. Extended markets can get much more extended. That’s the regime we’re in.

Crypto continues to lag the equity rally. Large specs have pushed long positioning in BTC and ETH to or near all-time highs, yet price isn’t catching bids with the market. That combination — crowded positioning, max downside beta — makes it a functional hedge against our long book, which is exactly how we’re using it. Bonds and DXY remain compressed and appear to be on the cusp of significant directional moves.

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. The portfolio ended last week down -172 bps, bringing year-to-date returns to +44.83%. We are now 15.7% below our YTD NAV high of +61%.

Current positioning: elevated cash, long NQ and select beaten-down software, healthcare, and cybersecurity names; short ETHUSD; long the Bloomberg Commodity ETF; long solar; a handful of idiosyncratic equity positions.

2. Large spec longs in BTC and ETH are at or near all-time highs. The crowd is fully loaded. Price isn’t keeping pace with the equity rally. It is, however, showing maximum beta to the downside — which makes it a useful hedge against the long book. That is how we’re treating it.

3. ETH daily chart below. Multiple long-term bearish setups across the crypto complex. We are short.

Trifecta Charts

4. CoT sector positioning dashboard below.

• Most crowded longs: Nikkei, UST 5yr, UST 10yr, 6L, Aluminum, Copper, Rough Rice, Soybean Meal, Oats, BTC, ETH, XRP

• Most crowded shorts: NQ, Ultras, 6J, 6M, Natural Gas, Gold, Palladium, GF, HE

5. Two data points worth holding together: Momentum vs. Minimum Vol is running 5 standard deviations above its long-term trend, while Goldman’s US Equity Speculative Trading Indicator sits at neutral. The GS indicator tracks relative trading volumes across penny stocks, unprofitable companies, and high-EV/sales names — a composite measure of retail froth. Elevated factor spread, subdued speculative activity. That combination is worth monitoring.

Charts via AlpineMacro & GS.

6. Last week’s Trifecta Lens Score drop to -3 warranted attention but not action — the signal needed to hold at that level consistently before it carried weight. It reversed quickly to -2. Neutral. No change to posture.

7. Bloomberg’s Simon White recently described the underlying risk structure in US equities: a gamma squeeze driven by single-stock options is holding individual vol elevated while VIX stays suppressed. It’s a rare configuration historically, and it’s sowing the conditions for a disorderly unwind when the squeeze exhausts.

Macro

8. Real personal income less transfers, measured on a 6-month annualized basis, has turned negative at -1.8%. Historically, that inflection has preceded a ~1.3 percentage point softening in 12-month payroll growth, and roughly doubles recession odds over the following year (25% to 57%).

We don’t think a recession is imminent. AI capex and fiscal deficits remain large enough to offset the signal — though the fiscal impulse is decelerating. But this is another data point confirming how unusual the current environment is. Reliable signals are misfiring. That tells you something about the regime, even if it doesn’t change the near-term outlook.

9. Alyosha’s bearish oil thesis rests on a simple premise: scarcity fears are overstated. With roughly 8 billion barrels of petroleum in global storage (~5.25B crude) and meaningful non-GCC spare capacity still available, the market has more than a year of runway even under a severe supply deficit. In his framing, squeeze attempts remain self-limiting — and crude can’t hold a rally because the cushion is larger than the bulls believe.

The bull case argues the opposite: that much of that storage is functionally unusable (tank bottoms, line-fill), that SPR depletion has removed a real buffer, and that the live Iran/Hormuz risk compounds the tightness. Alyosha’s counter is that unusable-barrel claims are overstated, the SPR release is largely term-lending already priced on the curve, and scarcity is a function of time rather than a hard wall.

Note: this summarizes his view, not an endorsement. The assumptions are stylized. Recent price action, however, appears to be voting in his direction. Below is a chart we made to illustrate his point.

10. Bonds remain the fulcrum for everything else in macro right now. Our bias is that long bonds break lower. However, the May bar is shaping up as a failed breakdown — which doesn’t change the bias, but does demand patience and flexibility. Nothing to do here except stay attentive and let the tape tell us what’s next.

Trade Setups / Topical Charts

11. DXY continues to coil in a 12-month-plus range. The long-term bias is lower — a 3-to-5-year secular move driven by the reversal of capital flows out of Core and back toward the Periphery as US exceptionalism gets re-rated.

12. That said, a number of conditions are aligning that mirror the setup preceding the early ‘21 DXY breakout. Our Large Spec 3-Year Oscillator is coming off a bearish consensus hit — same as early ‘21. DXY yield spread momentum is accelerating in the dollar’s favor — same as early ‘21. Relative US equity outperformance is positive. Relative USvsRoW growth is accelerating, driven by the AI trade. And the US is meaningfully insulated from rising energy costs via Strait of Hormuz (SoH) closure risk in ways that most of the world is not.

13. Defense appears to have finished correcting. PLTR sits at the intersection of AI and defense — two of the most durable secular themes in the current environment. The weekly chart looks constructive. New highs look to be on the horizon.

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,

Alex

When top-tier hedge funds need to recruit portfolio managers, they call Ilana Weinstein. At Sohn New York this month, Jawad Mian asked her what makes an investment professional worth betting on.

I knew her answer too well:

“I think special people tend to have a chip on their shoulder. There’s usually some historic thing they had to overcome that left an imprint. [...] I think this underdog syndrome matters because public markets test your resolve.”

Her examples were vivid: a learning disability, a speech impediment, bullying.

Some obstacles, though, run deeper—into the subconscious.

Jawad traces his own ambition to a childhood hunger for the approval of his father, a driven, successful entrepreneur. He names that unfulfilled desire as the engine that carried him to conventional success, yet the hunger it ran on never eased.

Follow that thread far enough, and it arrives at a fork.

The first instinct is to condemn it all—the pattern and everything it built.

But just because the chase was hollow does not mean the skill is.

The breakthrough: you have a choice.

Not just to walk away. But to reengage. Consciously, for the first time.

Perhaps out of curiosity. Perhaps for the intellectual satisfaction of building something and watching it fly. Perhaps as an explorer alongside others, rather than alone carrying something to prove.

Jawad’s final question to Ilana: what, over time, has she come to value?

“A sense of humour. The fiercest competitors I know also know how to laugh at the end of the day.”

Perhaps, God forbid, you actually have fun playing this infinite game.

Momentum & Continuation

In the May 9th, 2026 issue, I highlighted the Nasdaq’s weekly trendline breakout, stating that it offered the “almost unfathomable potential for further acceleration of the trend.”

The following week formed a hesitation Doji as the initial move digested. I mentioned I was watching for a breakout from its boundaries to confirm direction. We got that break this week.

“Unfathomable” upside continues until price action dictates otherwise …

Top momentum traders utilize relative strength as a primary filter for identifying opportunities, particularly during aggressive corrections when true leadership becomes apparent.

During the market volatility of early April, I identified Brookfield Renewable Partners (BEP), Bread Financial Holdings (BFH), and Dell Technologies (DELL) as standout performers due to their resilient price action.

Their moves since have been significant: BEP and BFH successfully reached their measured move targets, and DELL entered a full parabolic phase, capped off this week by a $9.7 billion U.S. Pentagon contract on Wednesday and an exceptional Q1 earnings report on Thursday.

The sheer velocity of DELL’s recent ascent has been remarkable.

Around the World

In other areas of the market, December Soybean Oil Futures broke out of the pennant I’ve been featuring. This is a tight pattern that should impulse quickly if it is going to move.

November Canola also broke out—but encountered immediate resistance on Friday.

The best breakouts are those that never look back. This one is already out of the “best of” running.

Soybean Futures continue to form a Symmetrical Triangle on the July contract.

Mexican Peso Futures are holding just below the neckline of their Head & Shoulders Continuation.

And Euro / Aussie is still trying to put in a Double Bottom.

Trends are hard to turn. The dropping volatility could be an early precursor to a new price equilibrium taking hold.

The Pauses That Refresh

This week, a fresh array of tickers emerged on my radar, suggesting that market breadth could widen beyond the AI narrative if these consolidations successfully clear overhead resistance.

Here are the names that caught my attention:

Active watchlists, real-time trade alerts, 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.

Against that, three developments warrant attention: our Trifecta Lens Score deteriorated last week; fund manager sentiment surveys show signs of euphoria; and BofA’s Bull-Bear Indicator triggered a sell signal. We are not calling a top. But the distribution of outcomes has widened. The appropriate response is to trail stops, size down on risk and tactically ride the momentum.

Separately, we examine Healthcare Equipment, which is registering its most oversold reading in recorded data and merits a closer look as a mean-reversion candidate.

***Quick housekeeping note: Enrollment into our Collective is open until the end of this week. The Collective includes all of our research, a full library of reports and videos on theory and strategy, our proprietary market dashboard, plus our internal slack where the team and I, plus fund managers and die-hards from around the world talk shop, exchange ideas, and shoot the shit. We will be raising our prices by over 25% within the next few months. So if you’ve been on the fence, now’s a good time to jump so you can lock in current pricing. Looking forward to seeing you in the group. ***

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. The portfolio ended last week down 344 bps, bringing year-to-date returns to +46.56%. We are now 14% below our YTD NAV high of +61%.

Current positioning: elevated cash, select beaten-down software, healthcare, and cybersecurity names; short ETH/USD; long the Bloomberg Commodity ETF; short duration; long solar; a handful of idiosyncratic equity positions.

2. We are structurally bearish the long end of the curve but acknowledge it is technically oversold at a meaningful support level. Front-end positioning has grown crowded on the short side, and ceasefire speculation has begun unwinding that trade. A tactical long entry in the front end is worth considering. Any strength in the long end we will use to re-up our short.

3. We significantly reduced long energy exposure last week. The tape was heavy, and ceasefire chatter introduced enough headline risk to justify trimming ahead of a positioning flush — regardless of where fundamentals stand. Our base case remains that any ceasefire will be short-lived, measured in weeks rather than months. However, we have no interest in stepping in front of a narrative-driven unwind, even when the fundies increasingly favor being long.

From Warren Pies: “The last month recorded the largest cumulative draw of total U.S. petroleum inventories on record. Gasoline inventories on a seasonally adjusted basis are at their lowest since 2014. Distillate inventories are at their lowest since 2003. The next few weeks represent a crucial window for oil fundamentals.”

We will look to re-engage on any washout.

Trifecta Charts

4. Trifecta Lens Score dropped to -3 last week. This reading is not yet confirmed — it could reverse quickly. But historically, a reading at or below -3 that persists has preceded elevated volatility regimes with high reliability. We are watching closely.

5. Aggregate Breadth Indicator remains at +2, which is supportive of the broader trend. Historically, larger corrections have not been preceded by readings above 1. No deterioration here yet.

6. My friend Dean has built a really deep sub-industry dataset back to the 1960s, and one of his favorite tells is what defensive groups are doing versus the S&P over a rolling 63-day window. In his latest work (link here), that indicator went from 100% of defensive sub-industries outperforming during the Iran conflict pullback to literally 0% afterward—something his history has never recorded before.

As Dean notes, when fewer than 10% of defensive groups are outperforming, the S&P has historically posted about a +21.5% annualized return, which is a pretty powerful bull-market signal.

7. BofA’s latest Global Fund Manager Survey shows record equity allocation, a sharp drop in cash holdings, record expectations for earnings growth, and a second consecutive Bull & Bear Indicator sell signal. The prior signal triggered February 26 — just ahead of the Iran-conflict selloff.

Sentiment at these levels does not predict the direction of the next move. It does reduce the margin for error.

Macro

8. The “Issuance Signal” study tests whether surges in equity supply — IPO proceeds normalized to GDP, combined with Baker-Wurgler’s classic equity share of new issuance — predict weaker forward S&P 500 returns. Across 50 years (1975-2024), the composite signal fires in just 9 instances (1991-96 cluster, 1999-2000, and 2021), and in those years subsequent 12-month returns averaged just +4.7% versus the +13.3% baseline, with maximum drawdowns averaging -21% over the following 24 months versus -16% otherwise.

Critically, the 2026 projection of ~$160B in IPO proceeds plus ~$440B in follow-on issuance would produce a composite z-score of +2.11 — the highest reading in the entire 50-year sample, exceeding even 1999-2000 and 2021 — though this is contingent on the projection materializing rather than coming in like the muted 2023-24 cycle.

The signal should be read as a late-cycle regime warning rather than a market-timing trigger: it can fire 2+ years before the actual peak, but every prior reading above +1.8 was followed within three years by a peak-to-trough drawdown of at least -20%.

9. Nomura’s Charlie Mcelligott’s latest on the inevitable “shock down”.

10. The AI CAPEX spend is driving a massive surge in US vs RoW economic outperformance. This growth divergence has driven a breakout in US vs RoW equities. Yet, what’s interesting is that DXY — which typically tracks relative growth and equity performance — remains firmly in its 12m+ range. A sign of USD oversaturation? I think so.

Trade Setups / Topical Charts

11. BofA GFS relative allocation to cyclicals (tech + industrials) versus defensives (healthcare + staples) has climbed to its highest level since Jan 18’. Time for some mean reversion in this trend?

12. Healthcare Equipment — Dean’s relative performance data shows Healthcare sitting at or near all-time lows relative to the S&P. The sector is at a historically extreme oversold reading.

13. We have begun building a basket using three filters: (1) technical leadership off the lows, (2) meaningful share repurchase activity underway or authorized, and (3) insider buying at significant scale.

14. UNH is one name we are evaluating for inclusion. The monthly chart, including relative performance, is shown below

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,
Alex

I know of only one cure for the fear of death. It is not what people want to hear: experience death, and then live again. This is what happened to a mentor of mine.

She was whitewater rafting the Pastaza River in Ecuador. Her boat capsized, and she was swept away by a rip current. She fought at first. But the water swallowed her, slammed her like a ragdoll, and the inevitable became apparent.

While losing consciousness, her experience shifted: a lightness, an expansion, a still silence. A sudden freedom, unchained from societal conventions, expectation, identity.

Then, she woke up at the bottom of the boat. A guide had pulled her from the water and resuscitated her.

Her body survived. But a different part of her—the domineering corporate executive she thought she was—died that day. What remained: the stillness; the lightness; the freedom from all that was revealed to be trivial.

When trading greats talk about the moments that shaped them, I hear this same experience.

Paul Tudor Jones lost over 60% of his clients’ accounts on a single cotton trade. Stan Druckenmiller watched a bet on interest rates implode and was forced to sell a portion of his company. Louis Bacon saw a third of his initial funding evaporate, leaving him mortified.

I used to see stories like this as acts of perseverance. I would reduce their experiences to a motivational footnote: when the greats get knocked down, they get right back up. Doing so trivialized what had occurred.

Their raft capsized. They were thrown into a rip current. The inevitable became apparent: the trader they thought they were was losing consciousness.

Placing those investor letters in the mail. Signing away a portion of the company. Transferring all remaining capital out of the account.

Their bodies went unharmed. But the identities they once held died.

What remained: the trader who had experienced death, and then lived again.

Futures in Focus

Market hesitation persists following the weekly Doji on the Nasdaq that I pointed out last week. That candle appeared just above a multi-point weekly trendline, and as we finished this week inside of last week’s range, the state of uncertainty remains. I am still monitoring for a breakout beyond last week’s boundaries to confirm the direction of the next intermediate trend for equities.

Last week, I noted that Rough Rice reached its 1X measured move target with real momentum. That strength indicated that this could be the beginning of an extended advance. The 2X target is currently projected at approximately 13.945. We maintain our long in the Macro Ops Portfolio.

The established uptrend in Soybean Oil remains healthy, now appearing to be in a period of consolidation following several legs to the upside. On the December contract, a three-week pennant pattern has potentially developed.

Canola displays a similar look.

And Soybean Futures have taken on the form of a Symmetrical Triangle on the July contract.

Featured Forex

Euro / Pound continues to flirt with the neckline of its Head & Shoulders Top. The boundary could not be better defined, and the right shoulder has taken on the look of a Descending Triangle. My only qualm is just how large (in time) this pattern has grown. Applying daily-timeframe trade management to a pattern going on 46 weeks in length can result in being chopped out on volatility that, zooming out, never affects the integrity of the pattern itself.

The potential Double Bottom in Euro / Aussie highlighted last week continues to hold its form. A talented Macro Operator tells me positioning strongly supports this possibility.

And Mexican Peso Futures have formed a Head & Shoulders Continuation. The neckline looks well defined with multiple price pivots.

The Pauses That Refresh

The S&P 500 Equal Weight completed a Cup & Handle Continuation pattern this week.

This has led several individual equities to exhibit similar technical setups. If you decide to trade these names, remember to manage concurrent risk.

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

Active watchlists, real-time trade alerts, 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 by over 25%. You can lock in the current rate by joining today. Enrollment is open until this Sunday at midnight.

JOIN THE COLLECTIVE

• Fundamentals: Is it cheap relative to where it could trade over the next 18-24 months?

• Technicals: Does it have an actionable technical setup that allows us to get a large notional size with minimal actual risk?

• Sentiment/Positioning: How hated is this idea, and how one-sided is the positioning?

Our best trades historically have all met the Trifecta Lens criteria. In fact, we’d be much more profitable if we only took Tier-1 Trifecta Lens setups.

We believe Solar Energy is the next Trifecta Lens Setup in markets. It meets all our criteria:

• Fundamentals: Solar stocks are bombed out, trading at 5-10 year lows, with a much cleaner supply/demand outlook over the next 18-24 months.

• Technicals: Solar has one of the highest Relative Strength scores and has outperformed the S&P 500 by 70% from its May 2025 bottom.

• Sentiment: Nobody’s talking about solar energy right now, even though it’s one of the only bipartisan energy sources in a world where Energy At All Costs will require even more solar energy capacity. Value and growth investors hate it.

We’ve been pounding the table on the solar energy theme since last August and have since built a basket of solar stocks to express our bullishness.

This week, I’m sharing Part 1 of our Solar Energy Value Chain Deep Dive Research series.

Solar Energy Value Chain (Part 1): Polysilicon & Wacker Chemie (WCH)

We’re deconstructing the Solar Energy Value Chain piece by piece so Collective members can gain a deeper understanding of the market’s next potential outperformer.

Which reminds me.

We’re opening enrollment to the Collective for the rest of the month. The Collective is one of the few places on the internet where serious traders/investors meet, build lasting relationships, share investment ideas, and foster a truly rich life. It’s unlike anything else out there.

The Collective includes all of our research, a full library of reports and videos on theory and strategy, our proprietary market dashboard, plus our internal Slack where the team and I, plus fund managers and die-hards from around the world talk shop, exchange ideas, and shoot the shit. We will be raising our prices by over 25% within the next few months. So if you’ve been on the fence, now’s a good time to jump so you can lock in current pricing.

We’re off to a good start this year (+45% YTD), but we know we can do better.

So if you’re interested in learning more about our Trifecta Lens trading philosophy, our Solar Thematic research (or all our other research), or what it would look like to join our community, click the link below.

JOIN THE COLLECTIVE

I can’t wait to see you in there.

Your Value Operator,

Brandon

“If each of us are hunting by ourselves, we can kill a bunny. But if the two of us hunt together, we can take down a stag. And then we can have a lot more meat to go around.”

Startup entrepreneurs grasp this intuitively: skilled teams collaborating in high-trust settings carry a material advantage over isolated individuals.

But traders and investors can be slower to learn this truth. The mythology of market speculation is a solitary one: the lone savant, the self-made millionaire, the romantic ideal of the deeply secluded obsessive.

I spent a large portion of my trading career inside that mythology and still trade this way at my prop firm. I take satisfaction in sharpening my sword week in and week out.

But trading together at Macro Ops—as The Collective—we achieve something else entirely.

We don’t trap bunnies. We take down stags.

Navigating the last two months of market turmoil is the clearest example.

In the first week of March, as the conflict in Iran escalated, we made a joint decision: flatten our equity book entirely. No heroics. Just out.

Here is what our Macro Ops Team Lead, Alex, shared with The Collective:

In the month that followed, we sidestepped deep corrections in tech and an overall risk-off skid across the indices.

Then, on April 4th, I spotted price action in the Russell suggesting strength was returning. I called it out in my weekly report.

Alex took the idea and ran with it.

He identified favorable positioning in the Russell, alongside a confirming Trifecta of data inputs, signaling an intermediate bottom in risk assets.

He framed the trade. Our Macro Ops portfolio went long the same day.

Six days later, our lead equity analyst Brandon—who had been tracking a starter position in Intel supporting the risk-on environment—opened a basket of AI and tech names for the portfolio.

The names added included Oracle, Intel Corp, Bloom Energy, and the AI & Technology ETF, CHAT.

Over the four weeks that followed:

The Russell moved from 2,550 to new all-time highs just shy of 3,000.

Oracle moved from 153 to 200.

Bloom Energy from 176 to 310.

CHAT from 70 to 89.

Intel from 52 to 130.

Our Macro Ops Portfolio surged to a high watermark of +61.2% YTD before settling at +50.9% YTD as of this writing.

This is what it looks like to hunt stags.

The collaboration extends beyond our core team.

Every week, members of The Collective share research, setups, and trade ideas from across specializations and geographies—ideas that would never cross an isolated trader’s desk, surfaced, vetted, and acted on together.

Discounted Korean corporates trading at 40% NAV discounts with active share buyback programs:

U.S.-based clean energy plays positioned to capture data center power demand:

The Macro Ops Collective is where private investors, CIOs, and individual traders come together to do what none of us can do alone.

Every member is entrepreneurial in spirit. Every member has come to understand that high-trust collaboration in markets isn’t a soft advantage—it’s a structural one. The kind that shows up in your returns at year end.

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 for the hunt ahead. 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.

If you’re ready to stop trapping bunnies and start taking down stags, join us on the hunt.

JOIN THE COLLECTIVE

***Quick housekeeping note: Enrollment into our Collective is open until the end of this week. The Collective includes all of our research, a full library of reports and videos on theory and strategy, our proprietary market dashboard, plus our internal slack where the team and I, plus fund managers and die-hards from around the world talk shop, exchange ideas, and shoot the shit. We will be raising our prices by over 25% within the next few months. So if you’ve been on the fence, now’s a good time to jump so you can lock in current pricing. Looking forward to seeing you in the group. ***

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. Last week was a painful one for the MO port. Mid-week it hit a YTD high of +61%, only to give back all the weekly gains and then some. The port ended Friday down -210bps, sitting at +50.7% YTD.

Core book: high levels of cash, long AI and semi plays, long RTY, long BTC, long BBG Commodities ETF, short bonds, long VIX, long Ags, long RBOB and Brent, short KC Coffee, long solar, long lithium and RE miners, plus a couple idiosyncratic equity names.

2. Back in September of last year I began writing about the increasingly tight compression regime that bonds were entering, suggesting a large trend was cooking (link here). Then in early March I noted the record long positioning in bonds, tilting the odds in favor of a bearish breakout (link here). The long end is now down at its lower monthly band and looks ready to punch through, while its monthly Bollinger Band has hit its tightest compression for which we have data. If this bearish breakdown holds, it’ll have significant repercussions across all major assets. This is the most important chart in macro at the moment.

3. We got short last week on the completion of this H&S continuation pattern (chart is a daily).

4. What’s interesting is that the recent rise in yields has been primarily driven by real yields, not inflation — despite one of the largest energy shocks since the 1970s, notes BBG’s Simon White. He writes “Real yields are rising as the market prices in a higher terminal rate for the Federal Reserve, with the peak implied rate from SOFR futures rising from under 3% on the eve of the Iran war to 3.85% now. Ten-year inflation breakevens have risen only about 20 basis points… That leaves a glaring risk if the market decides to take inflation risks from rising energy prices more seriously.”

The most obvious (to me, at least) and underpriced risk to this market is that we not only don’t get a ceasefire but things intensify, significantly.

5. And it’s probably a good time to start taking inflation risk seriously… Chart on the left shows BCOM Index in white, leading CPI (in orange) higher. While the chart on the right shows our Leading Inflation indicator hockeysticking higher.

6. Dec 27’ SOFT rate has traded above the Fed Funds target rate for the first time this cycle, putting the rate cutting cycle on notice.

Trifecta Charts

7. Long bond positioning has quickly flipped bearish, but it’s doing so from all-time record long positioning on a nominal basis. There are many events that could reverse this breakout (Hantavirus narrative, US-Iran deal, etc..) but with our indicators pointing to 6%+ NGDP and rising inflation volatility, bonds seem to be grossly overpriced.

8. Someone sent me this interesting chart from @MacroCharts showing MSCI Momentum / Minimum Volatility spread’s % distance above the 200dma is at an all-time record high, surpassing the previous extreme reading in 2000.

This isn’t an immediately actionable chart. But it does point to the late cycle characteristics of the current rally.

9. I’m increasingly split on this market. The “Whaley Price Thrusts” off the April lows, was significant. It also followed a -10% correction and when you get a 10% correction followed by a significant V price thrust to new highs, it’s highly unusual to see another significant (5%+) correction over the following six months. However, this is also just a highly unusual environment and the v-bottom wasn’t accompanied by any other classic breadth thrusts.

What does all this tell us? Not much, other than to keep humble and stay nimble, as we’re not in your typical bull market anymore. Give this thread from OG Walter Deemer a read where he shares his thoughts on the subject.

10. Speaking of unusual… our friend Dean Christians at TPMR makes a similar point in a recent note writing “in all but one case—1994—when fewer than 70% of stocks were above their 200-day moving averages for 358 consecutive sessions, the S&P 500 was in a bear market.”

Macro

11. And “A component of the TCTM Risk-Off composite issued a new alert when more than 7.75% of S&P 500 constituents fell to 52-week lows as the index hovered near a multi-year high. Historically, this kind of breadth deterioration has often preceded periods of increased market stress.

What makes this latest signal unusual is that it occurred while the S&P 500 was at a record high and still exhibiting strong upside price momentum.”

12. Our preferred short-term breadth gauges, the McClellan Summation Index and Oscillator have both firmly rolled over. This raises the likelihood that the market has started a technical correction. Whether that correction is sideways (through time) or down (through space) will depend on how quickly yields reprice, imo.

Trade Setups / Topical Charts

13. Increasing inflation volatility and rising yields should start to bring some action back into the FX majors soon. The dollar index (DXY) continues to compress within its 15m+ sideways range. A BIG move is coming. Our bias is for a break lower but we’ll happily play a trend in either direction.

14. Our Lead Technical Analyst, Mike G, pointed out EURAUD’s potential double bottom in his always excellent weekly, This Infinite Game. I like this trade as positioning is crowded long AUD while it’s quite short EUR. And price is reversing off a mutli-year significant level.

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,
Alex

George Coyle, co-author of the upcoming Market Wizards: The Next Generation, has been making the interview rounds.

Nearly every interviewer asks a version of the same question: what core trading principles do all wizards share?

Coyle’s answer won’t surprise anyone familiar with the iconic series: respect price action, hold winners, cut losses. Find a strategy that aligns with your temperament and lifestyle.

But one interviewer asked a different question: who were the human beings behind the tactics, and what traits did they share as people? Coyle identified six:

Self-awareness: A deep understanding of oneself and what works.

Clear goals: Precise objectives for what they’re trying to achieve.

Unjustified self-belief: Profound persistence, even after significant failures.

Independence: A preference for autonomy over traditional career paths.

Extreme passion: Devotion to trading as a primary reason for being.

Commitment and persistence: Willingness to press on despite the fear of failure.

These aren’t tactical choices. They are ways of being.

Across nearly all performance fields, aspiring players seek ‘how to’s’ of the elite performers, only to end up mimicking surface-level actions.

The doing is seductive because it’s observable. You can see the setups, the entries, the exits. You can backtest it, forward-test it, replicate it.

But the tactics bloom from the traits. The being births the doing.

The being requires you to look inward. To ask: Do I truly know myself? Do I have clear goals? Do I believe in this work even when the evidence says I shouldn’t? Am I willing to walk away from a traditional career path? Does this craft call me forward?

When you study a Market Wizard, be curious about their tactics. Learn their setups.

But do not seek to copy their trades. Seek first to cultivate their traits.

Futures in Focus

The Nasdaq printed a Doji this week, signaling market indecision right above its multi-point weekly trendline. With open skies overhead and a lack of structure below, I expect the direction for the next two-to-three week move depends on which side of this weekly range breaks first. In this scenario, this next phase will either trigger a significant reversal of the recent v-shaped rally or spark an accelerated blow-off move.

Rough Rice met its 1X measured move target this week. Thrusts out of patterns don’t get much stronger than this, suggesting it could be the start of a larger move. We’re long a risk-defined position in the Macro Ops portfolio.

Cocoa Futures hit their 1X target and are retracing to the breakout level. Note Cocoa’s strength relative to Rough Rice. Tony D-L, our resident Vol expert and futures trader, caught much of this move for the MO Portfolio via an early entry last month.

A theme we’ve seen—and played (see: A Real Gusher)—since the turn of the year has been the major trend changes across the commodity complex. Soybean Meal is attempting such a trend change right now.

The December contract had the cleanest boundary, in my view. Price is experiencing volatility as it attempts to breakout from the ~323 level.

Soybean Oil already established its uptrend and is pausing after multiple legs higher.

Canola has a similar look.

Bucking the uptrend is Coffee, which I’ve been highlighting in recent issues. Price closed Friday definitively below prior support on the weekly continuation chart.

Individual contracts show support from last July still in play. For the September contract below, that level sits at 251.50, where I expect more volatility before direction is ultimately decided. Our MO Portfolio is short a risk-defined position in the July contract.

I’m sneaking one currency cross into the futures roundup as it displays price structure very similar to the commodity reversals we’ve seen. Perhaps one of our traditional Macro Operators can provide the economic rationale for going long Euro short Aussie …

The Pauses That Refresh

There’s a mix of equity consolidations ready to break out and others ready to break down in this week’s screen.

Here are the names that caught my attention:

Active watchlists, real-time trade alerts, 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.

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. Portfolio rose +288bps last week, sitting at +53.8% YTD.

Core book: long AI and semi plays, long RTY, long BTC, short SOLUSD, short DAX, long silver, long BBG Commodities ETF, long KC HR Wheat, long Dec Brent, long RBOB Dec gas, long 2y USTs, long lithium and RE miners, plus a couple idiosyncratic equity names.

2. Back at the start of April (link here) we flagged the long setup in Intel Corp (INTC):

“Adding a small starter long in INTC here. INTC’s value as an indispensable strategic asset is going to become more self-evident as markets wake up to the fact that the global order is dead and Taiwan is not in our sphere of influence…”

3. INTC has shot up 165% since. We’ve taken partial profits on the way up and are trailing a tight stop on the remainder.

Trifecta Charts

4. Our base case for the past month was that Qs would run quickly to the upper level of their broadening top in a lockout rally. Not only did that play out — they punched through the upper bound entirely last week. Six consecutive weekly bull bars. That kind of price action signals a large demand/supply imbalance and historically leads to further trend continuation.

5. Our friend Dean at TPMR made a similar point recently: “On Thursday, we noted a sharp expansion in 252-day highs among technology sector stocks — the strongest reading since 2024. Historically, when similar signals have emerged near market highs like today, subsequent returns and win rates for the sector have been exceptionally strong.”

6. The rally is also bringing a marked acceleration in sentiment and retail flows. From Citadel: “Net buying on our platform last week alone was in the 98th percentile of weekly flows since 2019. Monthly net flows for April clocked in at the 87th percentile of monthly activity since 2019.”

7. Equity allocation just hit its highest level in five years. April marked the biggest monthly shift since November 2020, per StateStreet.

Macro

8. Last week we flagged the negative divergence in LQD/IEF — one of our preferred market internals. It’s still diverging. Lead times tend to be long and we haven’t hit danger levels yet. A complementary view comes from Jim Carroll’s High Yield Bond Cumulative A-D line (link here). If this divergence continues, the odds of a cyclical top rise dramatically.

9. Tony, our resident vol expert, digs into the Nasdaq-VXN correlation hitting an extreme (market up, vol up) — and much more — in his latest Vol Street Journal.

Trade Setups / Topical Charts

10. Our lead Technical Analyst Mike G highlighted Coffee’s recent completion of a H&S continuation pattern in his must read weekly (link here).

11. Zooming out to the weekly, you can see the larger breakdown at work. If this holds, it marks a significant change of trend — and a clean entry to get short.

12. Positioning and sentiment are neutral. Coffee enters its most bearish seasonal window in two weeks.

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,

Alex

What does money represent to you?

Complete this sentence with the first three words that appear: “Money is ______ .”

When I ask traders this question, the same qualities surface time and again. They surfaced for me, too.

Money is freedom. Money is choice. Money is security.

Now, name the opposite of each quality you just wrote. Use those words to complete this sentence: “Without money, I am ______ .”

Without money, I am imprisoned. Without money, I am coerced. Without money, I am unsafe.

See what money has stolen from you.

See what you believe must be protected when your account reaches new highs. What you believe is being taken from you when your account draws down.

This perceived theft is what disconnects traders from their process as their account scales.

They are not protecting capital. They are protecting their sense of freedom, their sense of choice, their sense of security—all of which have been projected onto an account balance.

What if you could reclaim these qualities? Not by pretending the money doesn’t matter. But by recognizing the qualities exist independent of the numbers on the screen.

The work is seeing it: you have freedom, you have choice, you are secure—at new highs and in drawdown.

Limit your drawdowns. Compound your returns. Care deeply about the process. But do not trade in pursuit of life’s most precious qualities.

Trade because the craft itself calls you forward.

A Trader’s Journey

Last weekend, a member of the Collective reached out to Alex, our Macro Ops Team Lead, seeking advice on how to cultivate his ability to act more independently as a trader. Alex subsequently shared this inquiry with the broader community:

“Just renewed my subscription … been loving the community and learning from you guys. I’ve been enthusiastically reading and applying what I read as it relates to trading/macro (eg, just today backtested what happens to JPYUSD post MOF/BOJ intervention given the news and whether it makes sense to follow that trade through) but the volume of info and content to consume far outpaces what I can realistically get through and don’t feel like I’ve grown too much as an independent-thinking trader (where I can generate ideas myself without leaning on what you, Brandon, Mike write about) so wanted to ask what you recommend as the best path forward -- do you think it’s a function of time spent reading books and eventually things clicking into place, reading research papers, etc.? what would you attribute to driving better idea generation and trading, and what do you think is the most optimal path forward for someone in my shoes (~6Y working in finance in banking, PE, and now credit with ~1-2Y of trading experience but honestly mostly riding the coattails of you guys and 1-2 others whose work I trust)? appreciate any help. thanks!”

Several members of the Collective stepped up to provide mentorship based on their personal experiences. This exchange highlights the strength of our community and brings to life one of our foundational principles: iron sharpens iron.

In my contribution to the discussion, I aimed to synthesize the initial inquiry and provide a structured framework for the various recommendations offered by the group.

I am including that response below as a real-world application of the concepts explored in the introductory essays of This Infinite Game.

You’re consuming ideas faster than you’re developing your own judgment. That’s normal at this stage (”~1-2Y of trading experience”) and fine as a starting point. But now you need to shift from observer to operator. The path forward isn’t more books or reading (external input). It’s narrowing your focus and building reps in one specific area until you develop proprietary pattern recognition.

Here’s what I’d suggest:

Pick one domain. Not ten. One. Maybe FX interventions. Maybe credit dislocations in a sector you know from PE. Pick one thing where you’re genuinely curious and have some edge from your background. (See: Enabling Constraints)

Let your curiosity lead. Audit your last few months of trading-related work. What work has dropped you into flow state—where you followed a thread for hours with no regard for time? By contrast, what felt like a homework assignment with a looming deadline? Double down on flow state. (See: Trade Where Time Falls Away).

Study it obsessively for 3-6 months. Build a database. Track every instance. Backtest different approaches. Develop your own framework for when it works and when it doesn’t. If you’re more of a price-action trader, you can use my trade log template. If you’re more of a thesis-driven trader you can use a journaling software like Notion.

Trade it in small size. Real money, but small enough to learn without bleeding. The goal isn’t profit yet, it’s judgment. The best you can, tune out all other market commentary. Tune in to the budding intuition that is taking root as you apply your “classroom” study to real-world live markets. You’ll learn more about your own market sense from taking 20 small trades in your domain than from 100 hours of reading what others have to say on those same markets. (See webinar: Your Ears Are Your Enemy)

Share what you’ve learned and ask about topics where you feel blocked. By this point you will have original thoughts on your individual domain, and specific questions as to what you believe is blocking your next stage of growth (much like you shared with Alex, as it happens). Ask questions specific to your study and your experience trading your strategy in small size. This community will route you to excellent, curated resources on those specific topics.

You don’t have to remain in this single domain forever. But for right now, deep expertise in one thing will cultivate your ability to think independently.

Commodity Whiplash

A slew of commodity breakouts saw their advances undone this week when reports hit that the U.S. and Iran were close to a peace agreement. My current commodities ruleset stopped me out of positions in Brent Crude, Soybeans, KC Wheat and Corn for a smattering of tiny wins and tiny losses.

What’s survived? Rough Rice, holding its Ascending Triangle breakout …

… and Cocoa Futures, holding its Ascending Channel breakout.

Fresh breakdowns appeared in Lean Hogs—possibly a Secondary Completion of April’s Head & Shoulders Top …

… and a real surprise based on what I was anticipating in Coffee: a Head & Shoulders Continuation to the downside.

If you recall from earlier issues, I was monitoring the lower boundary of a massive range between ~280 and ~420, scanning for either a reversal pattern at the lows or a continuation pattern after an initial move higher.

Yet the market now appears on the verge of breaking down.

Other markets I’m watching right now include Australian Dollar / New Zealand Dollar, which broke down the Rising Wedge featured in recent issues.

This wedge is small and price is above a rising moving average, so expectations are low.

Euro / British Pound’s Head & Shoulders Top.

Feeder Cattle’s Cup & Handle Continuation.

A multi-point trendline in Robusta Coffee Futures.

The Dollar looking increasingly weak at the mid-point of its range.

And the runaway train that is the Nasdaq …

The above chart is weekly and displays the almost unfathomable potential for further acceleration of the trend with this week’s closing breakout. Grab your popcorn.

The Pauses That Refresh

There are a number of consolidations in equities hovering right at All-Time Highs.

Here are the names that caught my attention:

Active watchlists, real-time trade alerts, 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.

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. Portfolio rose +597bps last week, sitting at +50.9% YTD.

Our core book: long AI and semi plays, long RTY, long BTC, short SOLUSD, short DAX, long silver, long BBG Commodities ETF, long KC HR Wheat, long Dec Brent, long RBOB Dec gas, long 2y USTs, long lithium and RE miners, plus a couple idiosyncratic equity names.

2. We wrote about the budding mean reversion set up in cocoa last month, and while the tape hasn’t kicked off on a bull leg yet, price continues to compress and the Trifecta setup (positioning, technicals, macro/fundamentals) is there.

3. We have a tight compression regime following deep Bull Volatile SQN readings, which tend to mark significant lows. We’re long and have orders to add on a volatility breakout.

Trifecta Charts

4. Last week I wrote that Qs will run quickly to the top of their broadening top pattern. They’re now 2.25% away and we think they close the rest of the gap fast.

5. We’re bullish and think the tape continues to run over the next 1-2 weeks, but concentration is narrowing and we’re starting to see some concerning divergence in measures of credit, one of our favorite internals (tan line).

6. Here’s another way of looking at the same chart, but on a divergence oscillator basis. Credit is not confirming the recent bull trend in the stocks. This doesn’t mean anything over the very short-term. But if it continues, it will significantly raise the odds that NQ is setting up for a larger corrective period..

Macro

7. What will be the thing that turns this market cycle over? The same thing as always: rising rates and tightening liquidity.

Here’s a weekly chart of UST 2yr yields. It’s broken out from a MAJOR compression regime. Compression regimes precede expansionary regimes (BIG trends). A big trend is coming and that trend looks more and more like it’ll be up.

8. From StateStreet: “Hard to find a reason to be dovish… Although uncertainty is high, justifications for Fed dovishness are fading. Even ahead of the FOMC meeting, the media began to interpret Fed speak as net hawkish. And while US GDP came in weaker than expected, there are few signs of outright weakness in the economy, especially as services consumption is growing at a pace still above pre-Covid averages… Inflation pressures, the potential for rising term premium and uncertainty over economic impacts have added two-way risks to the Fed’s next move, whenever that may come.”

9. U.S. Capital goods orders (nondefense ex-aircraft) just posted its largest MoM increase since 2020, signaling a significant pickup in business investment activity (chart via StateStreet).

10. Concentration risks are mounting… From StateStreet “As recently as a few quarters ago, equity investors were lamenting concentration and its associated risks. This concentration has returned in force, yet market participants are not fretting to the same degree.

“There are only 3 sectors globally where institutional investors are net buyers – Energy, IT and Financials. All three sectors are crowded and expensive but seeing robust earnings.

“The rest of the market is seeing net outflow pressure from institutions.”

Trade Setups / Topical Charts

11. Dean Christian’s shared shared some great research last week (link here), showing the increasingly bullish development in both the broad commodities complex as well as Ags, specifically.

He points out that “The Bloomberg Spot Commodity Index surged to a new high this week, marking the 38th instance over the past year in which it registered a new 252-day high.

“That has happened only 11 other times in history.

“As the chart below illustrates, when the rolling count reaches 38, the index has historically generated an annualized return of 14.3%, more than double its long-term average return.”

Last week we added our fourth leg to our BCI long.

12. He specifically highlights Ags as looking bullish, with wheat, corn, and soybeans all simultaneously reaching a 100% trend composite reading for the first time since early 2022. Dean points out that “when at least two of the three grain trend composites (wheat, corn, soybeans) register 100%, the S&P GSCI Spot Agriculture Index has historically generated a 30.3% annualized return. This meaningfully outperforms environments where only a single commodity reaches 100% and across all observations since 1969.”

Last week we pitched the Ag ETF DBA. We also like MOO.

13. And we still like the Adeocagro (AGRO) to play this theme. For those of you who remember, we first pitched this name back in early March (link here). It’s since broken out of its massive consolidation pattern and is already trading over +40% higher. We think this name is a 3-5x bagger over the next few years.

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,

Alex

To trade is, in part, to navigate discomfort. The ambiguity of selecting trades, the vulnerability of putting on risk, the tension of extended drawdowns.

To grow in trading is to develop one’s capacity for doing so.

So when someone promises to eliminate these for you—completely remove them from your trading experience, for one low fee—you’ve found my favorite screen in finance.

Such engagements are not mentorship. They are marketing. Even at their best, the enrichment flows one way, and the result is dependency.

What, then, distinguishes a true mentor? Start with your own lived experience.

Whether you have traded for a few years or a few decades, you have made contact with many truths of trading: the ambiguity, the vulnerability, the tension; the euphoria, the invincibility, the ephemeral sense of arrival.

Even in the faintest of ways, you already know these textures.

A mentor is someone steadier in the places that have left you off balance. Their contact with the realities of trading is more persistent, more tapped in.

And when you observe them closely, you can see it—not because they claim it, but because you’ve touched that same truth yourself and recognize its depth in another.

Each aspect of trading carries its own truth: market sense, sizing up, adding asset classes, trading under the eyes of risk managers or LPs.

You don’t need someone who has mastered it all. You need someone closer to whichever aspect is blocking your next stage of growth.

And once you find them, watch how they meet you. Do they offer guidance, or do they manage you? When you challenge their ideas, do they defend, or do they open?

Marketers sell dependency. Mentors cultivate your liberation.

High-Flying Commodities

In the April 4th issue, I noted that Light Crude’s “loose” price action lacked the asymmetric risk-to-reward required by my swing-trading playbooks.

While it has since whipped around that same range …

… Brent Crude broke out of the Flag noted in the April 18th issue and is testing March’s swing high. Clearing this resistance targets a 1X measured move of 109.

Energy isn’t the only sector moving; Iran conflict spillovers are aggressively driving agricultural commodities higher.

KC Wheat’s breakout, noted last week, nearly hit its 1X target:

Soybean Oil broke out of a 7-week Running Wedge. As I commented in the Macro Ops Comm Center, I preferred the three upper-boundary pivots on the December contract, but early entry on the nearby July contract was rewarded.

On Friday, the November “new crop” soybean contract broke past the upper resistance level of a seven-week Ascending Triangle pattern.

And the reversal in Corn continues to take shape with price pushing further away from the neckline of a multi-month Head & Shoulders, which is part of a large double bottom formation.

We’re long a number of these commodities in our Macro Ops Portfolio, and have added multiple times this year to our position in the Bloomberg All Commodity ETF (BCI).

Rounding out a look at agricultural commodities, Rough Rice pivoted off of the 11.45 level multiple times since mid-February, forming an Ascending Triangle on the continuation chart. Note that this market is significantly thinner than those previously discussed.

Featured Forex

I’ve been tracking a potential Head & Shoulders Continuation in Yen Futures, specifically the tight coil at the right shoulder. Following a Wednesday breakdown, the Bank of Japan intervened at the neckline to halt the decline. Thursday’s surge then breached the right shoulder high, signaling a possible trend reversal.

This possibility gets much more interesting when zooming out to the weekly.

The BOJ defended a level that was first tested back in 2024. Much like the range in Coffee covered last week, a reversal from this lower boundary would offer plenty of room for a run back to the top of the two-year range.

The US Dollar continues to trade at the midpoint of its established range:

The potential Head & Shoulders Top I’ve featured in the Euro / Pound ended the week right at the neckline:

And the Australian Dollar / New Zealand Dollar has been on a tear and is coiling at highs:

The Pauses That Refresh

Responding to Collective member requests, I’ve added Sector and Industry labels to the upper right of every chart on my active watchlist. This update makes it easier to track names within specific groups or themes.

Here are the stocks that grabbed my attention during this week’s screen:

Active watchlists, real-time trade alerts, 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.

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. Portfolio rose +210bps last week, sitting at +45% YTD. Two weeks ago, following the bear trap reversal in the major indices, we began aggressively adding risk — reducing cash holdings from 65% to 35%.

Our core book: long AI and semi plays, long RTY, long silver, long gold miners, long BBG Commodities ETF, long Dec Brent, long RBOB Dec gas, long 2y USTs, plus a couple idiosyncratic equity names.

2. We still hold a large Bcom index (BCI) long we’ve been sitting in since last summer. The chart is overextended, but overextension can persist. It’s been consolidating its gains and looks like it’s gearing up for another leg highe (Weekly chart.)

3. The NQ100 weekly is a great-looking chart. Tight 7-month sideways compression, textbook bear trap reversal, lockout bull market rally. We flipped long a bunch of AI/semi names on the reversal over the past two weeks — respect for the tape, plus the technical setups were there. Anthropic’s Mythos announcement — likely the most significant step-function model improvement in a while — is adding serious juice to the AGI narrative.

When this trend ends is anybody’s guess. My read: the Qs probably run fairly quickly to the top of the broadening megaphone, around 28,500. (Daily chart.)

Trifecta Charts

4. Dean Christians at Turning Point Market Research (link here) flagged last week that his long-term Dual-Trend system flipped bullish on S&P 500 information technology — annualized returns at this signal are strong.

5. I’ll admit — it’s a strange market. Historic price thrust, but no confirming breadth thrusts. Breadth remains incredibly narrow (see next chart). And our Liquidity Gauge still sits sub-40%. That could change — Warsh is coming in soon, and maybe he starts jawboning rates down before taking the Fed’s helm. Anything can happen. We’ll keep a close watch on this one.

6. High dispersion, narrow breadth. That’s the story right now.

Macro

7. Via GS: The world’s oil buffers are being rapidly depleted — crude inventories poised to hit record lows even if the Strait of Hormuz fully reopens by month end.

8. JPM's recent Oil Flash Note, "Simple Math," is worth a read. Here's the meat of it. Collective members can find the full report in our research channel.

9. Via @WarrenPies: “A historic earnings boom is developing. Estimates growing faster than they did in the mid-90s or the late internet bubble years. Only the COVID recovery saw a greater inflection. And this boom is unique — it’s not coming off an EPS drawdown.”

10. But like breadth, the strong earnings revisions are concentrated in tech and commodities. (Charts via State Street.)

Trade Setups / Topical Charts

11. Sentix’s Strategic Bias continues to positively diverge from the underlying. Solid sign and high odds of a coming bull leg in bitcoin.

12. We have starter longs in both BTC and ETH. IF we get a breakout from this channel, we’ll look to add to our positions.

13. Invesco’s Agriculture fund (DBA) has broken out from its 12m compression regime. The macro backdrop remains highly supportive of Ags. We may initiate a starter long in DBA this week (chart is a weekly).

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,
Alex

Developing traders often see constraints as boxes that limit them. When they watch a trader commit to a single setup, a single timeframe, a single ruleset, they misread what’s happening. They think: “That trader has boxed themselves in.”

But constraints don’t create a box. They create riverbanks.

Your creative energy—the spirit of your trading—moves like water. That spirit flows through the charts you watch, the setups you track, the trade data you collect.

Without banks, that water flattens into a shallow marsh. The potential power within you dissipates rather than builds because it has no direction to its flow. But introduce riverbanks and everything changes. The banks don’t block the water. They channel it.

By narrowing the path, the water gains depth. It gains speed. And suddenly it has the power to move your understanding, your experience, your wisdom forward.

This is what I see when traders make their biggest leaps. Not commitment to trading in general. Commitment to self-imposed enabling constraints.

David Ryan made this leap after blowing up his account early in his career. He audited a year of shallow waters: buying extended stocks, chasing pullbacks, mixing styles. He made a commitment:

“I was so focused. I wasn’t buying pullbacks. I wasn’t buying extended stocks. I was buying exactly right. I didn’t care what the rest of the market looked like. I was buying one setup and one setup only.”

He went on to become a three-time U.S. Investing Champion.

The constraints you choose—if only for a season—become the banks that give your trading depth and force.

Choose your riverbanks. Let them channel the spirit of your trading forward.

Futures in Focus

In last week’s issue, I highlighted Brent Crude flagging after the impulsive move up in energy. This week, it attempted to break out.

We’re long close cousin RBOB Gasoline Futures in the Macro Ops Portfolio.

Let’s see if they follow through next week.

Also attempting to break out this week is KC Wheat. Broadening Patterns are inherently volatile. The boundaries diverge from one another, representing the expanding volatility. This makes it challenging to define an appropriate risk point.

KC Wheat, however, compressed just below the upper boundary. Such pre-breakout conditions make for excellent risk-reward setups as they offer a clean structure to define risk and frame an asymmetric trade.

KC Wheat blasted out of that short price compression on Thursday, but ran into sellers on Friday. Another one to watch for followthrough or lack thereof next week.

Coffee is at an important juncture. Price is reacting to the ~280 level for the third time in nine months. The last test was March’s failed reversal attempt from a 7-week Head & Shoulders Bottom.

Zooming out to the Weekly, the picture becomes more compelling. Coffee could be reversing off the bottom of a massive range between ~280 and ~420.

The ideal setup would be a clean continuation pattern on the daily in the lower half of that range, launching a move back to the upper boundary.

Yen Futures continue to coil, as highlighted last week:

Euro / Pound could be forming a Head & Shoulders Top, with price drifting back to the neckline:

And the Corn Futures Continuation chart is attempting to push away from the neckline of a 54-week Head & Shoulders Bottom pattern (with a cautionary flag for the downward sloping neckline).

The Pauses That Refresh

There are a number of consolidations in equities this week that are building up power just below their All-Time Highs.

Here are the names that caught my attention:

Active watchlists, real-time trade alerts, 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.

What is the destination for your trading? Not your goals for this week, this month, this year. What is the vision for it all?

Dr. Brett Steenbarger spent four years at Tudor Investment Corporation and has worked with countless hedge fund managers since. At SMB Capital’s New York trading summit last month, he shared what he’s observed: those who dedicate a percentage of their profits to causes they deeply believe in transform their relationship with market speculation.

They’re inspired to trade well because the profits fund something meaningful. They stay disciplined because the cause matters more than any single position. And they hold better emotional balance because their identity isn’t tethered solely to market swings.

Dr. Steenbarger cites Paul Tudor Jones as an example of this principle: a man trading not for a number on a screen, but for his Robin Hood Foundation. The foundation is the destination that pulls him forward—his vision for his trading.

You don’t need PTJ-level wealth to feel this pull.

My wife and I have a young family and an equally young nest egg. We both care deeply about our local community and the next generation being raised here.

A few times a year, we’ll find ourselves driving through town and spot a commercial space for lease. My wife, an entrepreneur in architectural design, begins painting a picture of what could be created to support the flourishing of the people we care about. I soundboard. We assemble a shortlist of collaborators who could bring the vision to life.

The timing isn’t today. But there’s a real sense that the day will arrive when we have the capacity to move on one of these visions—if not multiple. The trading desk feels different the next morning. My attention is less magnetized to the minutiae: to today’s action, to this week’s performance.

I return to process—one I know will persist indefinitely, and compound until we arrive at the day the resources and timing are no longer ahead of us, but at our feet.

This is all it takes. No philanthropic foundation. No WSJ headline.

Just a destination you truly care about, and can make out clearly enough to feel its pull.

A Rip-Roaring Rally

Two weeks ago, in the April 4, 2026 issue, I featured the “loose” markets of Crude Oil and the Nasdaq, and contrasted them to the “tight” price compression on the Russell. Shortly after, the Russell popped out of that range with our Macro Ops Portfolio positioned long.

Things looked pretty good last week when I wrote I’d be watching what would develop next—potentially a bear-market “Rounding Pattern” or a tight, low-volatility consolidation.

What we got was a hot knife through butter:

In that same April 4 issue, I covered three names that had exhibited notable relative strength in the face of all the turmoil.

Bread Financial Holdings has gone on to meet both its Head & Shoulders Continuation and Symmetrical Triangle 1X targets:

Dell encountered initial selling pressure but pushed into new All-Time Highs:

Brookfield Renewable Partners pulled away from its Cup & Handle Continuation boundary on the daily timeframe, which can act as a launching pattern completing the massive Head & Shoulders Bottom on the weekly timeframe:

Of note: there is a boatload of overhead resistance to the left on the weekly chart:

Futures in Focus

Japanese Yen Futures looked like they were forming a Head & Shoulders Continuation, but volatility is contracting above the neckline. It’s a small pattern with potential to break either direction.

I’ll be watching to see if the upper boundary can clean itself up (I’m not thrilled with boundaries defined more by wicks than closes).

Brent Crude is flagging after the impulsive move up in energy. Brent Crude is a cleaner pattern than Light Crude if looking to play continuation in energy prices. December contract shown here.

I’ve been following the breakout in Cotton since initiating work on my commodities playbook earlier this year. The March break of the Declining Channel on the May contract kicked off a huge rally.

That breakout on the daily coincided with a breakout from a multi-month trendline on the continuation chart.

The Dollar continues its rangebound action between ~96 and ~100. It’s currently smack in the middle of the range. Both boundaries have been tested multiple times.

The ideal scenario for Platinum would have been a low-volatility contraction along the upper boundary of this Falling Wedge. This would have allowed energy to build for a breakout.

Instead, price bled right through the boundary, which tells me this boundary is not significant to market participants and the pattern as I labeled it is likely to morph.

Corn is trying to hold a retest of a multi-month Head & Shoulders Bottom breakout.

Note: Head & Shoulders with necklines slanted in the opposite direction of the breakout are considered weaker than those where the slant of the neckline aligns with the direction of the breakout.

A continuation pattern forming on the daily would be an ideal setup from here.

The Pauses That Refresh

A month ago, many of these same equity setups appeared ready to break out. The conflict in Iran sent them to the opposite sides of their ranges. Now, they are looking back in play.

Here’s what rose to the top of my equity screen this week:

Active watchlists, real-time trade alerts, 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.

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. Portfolio rose 10bps on the week, sitting at +37.5% YTD. This is a wait-and-see market — and we need to do more of nothing.

Still running high cash. Core book: long RTY, long silver, long gold miners, long BBG Commodities ETF, long Dec Brent, long 2y USTs, plus a couple idiosyncratic equity names.

2. We have a starter long in cocoa. It’s setting up in a tight compression following a deep Bear Volatility regime SQN reading — which tends to mark bottoms.

3. Positioning and sentiment are crowded short, while the tape is deeply oversold. We’ll be adding to this long on a confirmed volatility breakout (VBO).

Trifecta Charts

4. Our Trifecta Lens fell back to -2 last week. Combined with severely depressed liquidity readings, the message is clear: best case, we chop sideways from here. A move to -3 or lower signals a likely cyclical top is in.

5. Durable bottoms need breadth thrust confirmation — a big, fast reversal in investor behavior. That may still come. But we haven’t seen any thrusts yet.

Tony — our resident vol expert — breaks down why this rally was hedge-unwind driven: a collapse in implied correlation, not individual stock vol. That trade is largely done. Implied correlation is back to normal, the next leg lower needs individual stock vol to drop, and with earnings ahead and the war still live, that’s unlikely. VIX stalls in the high-teens, VX curve stays flat, equities lose a key fuel source. Full weekly vol rundown here.

6. Our combined Aggregate Breadth + Thrust indicator is now at +2 and falling. Lowest reading since last April’s Liberation Day selloff. If this number doesn’t materially improve, odds are rising that we’re putting in a cyclical top.

Macro

7. Our Leading Inflation Indicator (amber line) is starting to hockey stick higher — now at its highest level since 2023.

8. BBG’s Simon White shows China’s input prices PMI, advanced 6 months, has also risen to multi-year highs and is still climbing.

9. Despite this, longer-term inflation expectations remain anchored.

A few reasons for that: (1) labor markets remain weak, wage growth keeps falling; (2) the market is looking through the supply shock and pricing the coming demand shock of higher energy/food prices hitting an already anemic consumer; and (3) the market may still be too optimistic on a near-term resolution to this war.

10. From GS: “Since the start of the conflict, 5y5y traded inflation has declined slightly despite the large repricing in the near-term inflation path. While it’s reasonable that markets would price a supply shock as a one-off boost to inflation, we think that has been reinforced by the comparative stability in longer-dated oil futures, which have meaningfully lagged their typical beta to the front-end of the oil curve.”

11. Last week we talked about the DXY and its 12-month sideways range. Still watching for a setup — breakout above or below. My bias is lower. I’m willing to take small swings short at the top of this range. State Street shows the USD’s domestic bid losing steam.

12. Paulsen put out a great post last week (link here) making the case for slowing US growth. His geo-weighted index of 10yr USTs and real USD, inverted and advanced 3 months, is pointing to negative economic surprises ahead.

13. Same picture when you add oil. Paulsen’s not calling for growth falling through the floor — just that already-slow growth continues coming in lower.

14. Atlanta Fed’s GDPNow is at its lowest level since the Liberation Day selloff, and falling fast.

Trade Setups / Topical Charts

15. The AI trade is nowhere near over. @WarrenPies:

“As the Iran War has ebbed and flowed, GPU availability for B200s has collapsed to zero...H100s close behind. Whatever happens with the war, the AI complex is likely to lead any true sustainable bull market. Unsurprising to see SMH less than 1% from a new ATH.”

16. Semis (SMH) continue to lead the charge.

17. I’m turning more bearish on crypto — but I think we likely see a counter-trend rally first. Sentix noted this past week that Strategic Bias is signaling a likely intermediate bottom in BTC:

“Against a backdrop of bearish sentiment, Bitcoin managed to defend its price level just below US$70,000. So far, so good. However, this negative sentiment has now subsided. At the same time, nothing has been achieved in technical terms. The oscillating movement that has persisted for weeks is, so far, consistent with a consolidation within a downtrend, and neutral sentiment often marks the end of such a consolidation phase. However, something noteworthy is happening on another level. Medium-term underlying confidence is rising significantly, and more sharply than the recovery in sentiment. This therefore reflects a new willingness to build positions that goes beyond simply covering short positions. The $76,000 mark could therefore be tested. But only once prices move above this resistance level would the chart picture be viewed more constructively.”

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,
Alex

The best traders I’ve studied share one visible quality: the wilder markets become, the more still they appear.

In an attempt to emulate their external personas, I used to default to emotional detachment when markets came unhinged. It kept me out of trouble. And out of opportunity.

Without attunement to my inner state, the only action I could take was inaction.

This guarded against impulsive trading and protected capital. But it also suffocated perfectly valid trades that fit my playbook: opportunities I had trained for, conceived clearly—and then watched pass from behind the glass of detachment.

The traders I admired weren’t numb. They were spacious.

Numbness flattens the signal along with the noise. Space preserves the signal, and creates just enough distance to keep the impulse from pulling the trigger.

When the temptation to act arrives—to release the excitement, to resolve the unrest—the answer is not to extinguish it. It is to recognize the reactive impulse, and to pause.

In that pause, aligned action becomes clear: does this impulse fit what was conceived in calm? Does it match the trade plan built before the storm?

If yes, the pause is confirmation of the trade.

If no, the pause is the trade.

This is what separates the two traders who appear identical from the outside: both quiet and seemingly unmoved.

One has gone numb.

The other has learned to anchor in stillness without severing the signal.

Around the World

There’s been a strong focus on U.S. equities in recent issues, so this week I took to my full futures universe and grabbed the charts that caught my attention.

Japanese Yen Futures show a potential Head & Shoulders Continuation on the daily:

The Dollar continues its rangebound action between ~96 and ~100. Both boundaries have been tested multiple times. I’d love to see price tighten up against one of the two levels in anticipation of a breakout.

London Cocoa has formed an extremely tight price range between ~2500 and ~2300. Low volatility precedes high volatility …

We’re currently long the American Cocoa contract in the Macro Ops Portfolio.

The scale of this Falling Wedge on Platinum is enormous. So much so I question its tradability. Silver exhibits a similar pattern, but the upper boundary on Platinum looks cleaner to me.

The ideal scenario would be a low-volatility contraction along the upper boundary to allow energy to build for a breakout.

And, of course, there’s the Russell, whose tight price compression along the convergence of the 200EMA and multi-point trendline I featured last week.

I felt the Russell offered the best asymmetric setup of all the indices, allowing for either a conservative stop placement below the entire consolidation, or aggressive stop placement using the low of the last daily bar inside the range.

Russell popped this week, but the move lands it back in a congestion zone. The next 1-2 weeks are key: will we see a bear-market “Rounding Pattern” or tighter, lower-volatility consolidation?

The Pauses That Refresh

Many stocks continue to form clean consolidations. The following names stood out in this week’s screening:

Active watchlists, real-time trade alerts, 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.

JOIN THE COLLECTIVE

MO Portfolio & Trades

1. Portfolio fell -136bps on the week, sitting at +37.39% YTD. Getting chopped around more than we should be. This is a wait-and-see market — and we need to do more of nothing.

Still running high cash. Core book: long silver, long gold miners, long BBG Commodities ETF, long 2y USTs, short cotton, plus a couple idiosyncratic equity names.

2. We took profits on CENX last month, but decided to take another swing at the aluminum trade — adding Alcoa (AA) to the book last week following its recent breakout. An Iran/Hormuz closure starves bauxite and alumina shipping lanes, spikes global energy costs, and crushes smelting capacity for energy - import-dependent competitors. AA, powered by cheaper domestic grid power, takes share. Meanwhile, the defense and aerospace procurement surge that follows any Gulf escalation is aluminum-intensive — front-loading demand exactly when supply is most constrained.

3. This is one of the more important macro charts to keep an eye on. DXY continues to coil near the upper bound of its 12 month sideways compression/rectangle pattern. Short-term positioning got ahead of itself, and is a near-term headwind, but longer-term positioning is still muted. We’re agnostic on direction and will play a move in either direction.

Trifecta Charts

4. Ding ding ding. Our Trend Fragility indicator — a composite of sentiment, positioning, and flows — fell to 19% last week, triggering a conditional buy signal. Past signals marked by green vertical shading.

5. Our friend Dean Christians flagged this in a recent note: the 7-week Bull-Bear spread in the Investors Intelligence survey has “fallen dramatically to -43.5% — the largest decline since the COVID crash, occurring in fewer than 1% of observations since 1971.” Historically, extreme readings like this have preceded sharp reflex rallies, with SPX generating annualized gains near 30% when the spread falls below -43%. Classic contrarian setup.

6. Our Aggregate Breadth Indicator continues to chug along at +3 — a solid reading. Points to recent market weakness being more about rotation than broad distribution. At least for now.

7. The Liquidity gauge, however, hit the floor last week — 0% reading, now sitting at 7%. Red dots mark past instances when this gauge first crossed below 5%.

All of the above keeps telling me: at best, we’re in a larger sideways volatile regime — and likely a cyclical topping process — that plays out until we start seeing cracks in the labor market.

8. We have conditional buy signals from TF and sentiment surveys, but we never saw true capitulation. The kind that marks an enduring low and gets followed by breadth thrusts.

That said, we’ve probably seen enough for a short-to-intermediate bottom. My working assumption: SPX chops in a ~700-point range between the recent 6,300 low and the 7k high.

9. If you haven’t read Mike G’s latest note yet, do it — the full piece is on the Collective site, excerpt on Substack here. He’s watching the Russell closely: “More interesting to me in the equity world is the Russell, which has held its tight price compression right at the convergence of its 200EMA and multi-point trendline.”

Macro

10. Who leads matters. Dean Christians again — this time on why energy leading the charge isn’t a great sign: since 1950, the S&P 500 has returned just 1.12% annually during periods when energy led, versus an all-period average of 8% (link here).

11. Short-term, flows into energy are large and positioning looks a bit overcooked — sector is likely due for a breather. But as State Street recently noted, positioning relative to historical averages is still far from crowded. It’s coming off a very low base.

12. Updated US Price Stats YoY% from State Street. Inflation is about to rip. The question is how much the Fed chooses to look through supply-disruption-induced inflation — watch the upcoming minutes for any signal.

13. Earnings estimates have held up, but the longer the Strait stays partially closed, the more it squeezes an already stretched consumer through higher energy costs.

14. From BBG’s Simon White…

Trade Setups / Topical Charts

15. Aerospace & Defense names are oversold within a broad uptrend (chart via @RenMacLLC.

16. Rheinmetall (RHM) was one of our big equity winners in ‘24. It’s been consolidating those gains in a sleepy sideways channel — and just reversed off the lower bound on the weekly. RHM is the purest expression of European rearmament at the exact moment a Gulf escalation makes NATO’s 2% GDP floor look politically untenable as a ceiling. Germany and Poland are tracking toward 3-4% trajectories, and RHM is the primary domestic prime contractor for both. The FX tailwind is underappreciated: Euro fiscal expansion strengthens EUR while RHM’s DM revenue base drives simultaneous earnings and multiple re-rating.

17. Mr. X and I are doing another interview soon — updating on Iran, but also covering China and Taiwan. Conviction is building that China moves on the island within the next 18 months.

One pair trade I’m considering: long INTC / short TSM. Relative performance looks to be turning after a mostly one-way trade for the past decade. More on this for the Collective soon.

18. INTC on the weekly and daily. Likely adding a small starter long. INTC’s value as an indispensable strategic asset is going to become more self-evident as markets wake up to the fact that the global order is dead and Taiwan is not in our sphear-of-influence…

19. Crypto is nearing a make-or-break point. All major pairs compressing in a tight bear flag. The weekly SOLUSD chart shows a large completed multi-year H&S top. My bet is this resolves lower and crypto enters a devastating bear. But we’ll see — as always, we’ll let the tape tip its hand.

JOIN THE COLLECTIVE

Thanks for reading.

Your Macro Operator,

Alex