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:

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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.”

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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:

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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.

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Thanks for reading.

Your Macro Operator,

Alex

Markets have reached levels of extreme uncertainty. I can see it in the cascading conditionals on social media. I can feel it in the chat rooms.

As the cone of possibilities widens its jaws, it swallows our footing. Our need to know rushes to the surface. Should I be long here? Hedged? Flat?

There’s a part of you looping on unknowable outcomes. Minute after minute, day after day. Inhaling the headlines, refreshing the feeds, dredging the torrent for the data point that will finally reveal what should be done.

And there’s another part, connected to what’s actually unfolding before it becomes intellectualized, that already knows how you should be positioned.

The part that knows is not concerned with benchmarks. It’s not the voice ready to pounce on you for being “trapped” by a bear-market rally or “shaken out” by a V-reversal.

Those voices are your personality defending something—your competence, your identity as a trader, your need to not look foolish. They write the story you tell yourself about your actions.

The part that knows sits below the story. And before any probabilities are assigned, before any analysis is compiled, it simply knows.

Accessing it requires stepping out of the defended posture. The part that needs to prove it saw it coming. That it didn’t get fooled. That it beat the benchmark.

It requires curiosity instead of certainty. Wonder instead of worry.

Wonder about this moment in market history: 100% unique, impossible to backtest or probability-weight into submission.

Audit your posture right now. Is it wide and curious? Or narrow and defended?

One part aches to know. The other already does.

Loosey Goosey

Buy ‘em tight, sell ‘em loose. So goes the swing trading maxim.

It’s “tight” price action that allows swing traders to set tight stops, put on meaningful size, and attempt to capture significant price expansion. When that “tight” price action becomes “loose,” it’s not the time to put on risk. It’s time to take it off.

We discuss this internally at Macro Ops often: our highest expectancy trades are ones taken on moves out of compressed price action—”tight” ranges on the charts.

And we tactically implement fast-moving trailing stops when price reaches elevated ATR levels beyond a key moving average, systematically selling “loose” price action.

The irony is that interest in specific stocks or commodities runs just the inverse. When price action is tight, it’s seen as too boring to be of interest.

And then when price gets loose? Everyone wants to speculate on the next big leg.

Right now, there is a ton of interest in gold, oil and commodities. I understand there are important economic implications at play here.

But from a purely swing trading standpoint, these charts are way too loose to offer much in the way of asymmetric risk-to-reward according to my playbooks.

Over the last month, we tracked the price compression in the Nasdaq that broke down last week:

This week, price bounced right back to the converging resistance of the 200EMA, lower trendline, and compression range.

The Nasdaq was tight, now it’s loose.

This is even more apparent on the closing price line chart:

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.

While the Nasdaq could whip around from here irrespective of the next intermediate move for equities, the Russell may give a cleaner read when it expands from this compressed range.

Relative Strength

If the next direction in equities is up, there are a few names that jumped out as exhibiting particular strength over the past two weeks of turmoil.

Brookfield Renewable Partners (BEP) completed a Cup & Handle Continuation on the daily:

And this corresponds with completion of a massive Head & Shoulders Bottom on the weekly:

Dell Technologies (DELL) is threatening to complete an equally massive Head & Shoulders Continuation on the weekly:

And Bread Financial Holdings (BFH)—featured from the very first issue of This Infinite Game—has held its breakout from a year-long Head & Shoulders Continuation pattern, and formed a Symmetrical Triangle consolidation above the breakout level.

The Pauses That Refresh

There are a number of patterns that have held their consolidations, as well as many opportunities to play on the short side or between range boundaries.

Here are the names that caught my eye 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.

QOTW: “The market’s consensus seems to be that 30-50% of Gulf energy infrastructure getting wiped out will have zero lasting consequences. No plastics shortages, no fertilizer crunch, no chip supply issues from helium depletion. The tail risk is so catastrophically bad it can’t really be priced — so the default is just buy the dip and pray everything goes back to normal.” ~ anon

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MO Portfolio & Trades

1. Portfolio fell -234 bps on the week, sitting at +38.76% on the year.

Still running high cash. Core book: long HRW Wheat, long sugar, long corn, long silver, long BBG Commodities ETF, plus a couple of idiosyncratic equity names.

2. BBG Commodities Index ETF (BCI) is flagging and setting up for another add.

3. SolarEdge Technologies (SEDG) is a new addition to our book. It recently completed a 12m+ Cup-n-Handle. Solar remains a deeply unloved sector of the market, while the Iran conflict is highlighting the growing importance of energy security. Brandon did a great write-up on solar in his latest report, which Collective members can find hung up in Slack.

4. A few weeks ago, I pointed out how the massive March 20th quarter OPEX ($1.3trn in delta notional), along with the equally large JPM collar trade on the SPX that expires March 31st, had been keeping the market pinned in a tight trading range (one of its narrowest year-start ranges in over 20yrs).

My teammate and MO resident Vol expert, Tony, discusses this idea in length in his latest Vol-Street Journal video (link here). He flags two things worth highlighting: SPX and NDX are both breaking out of their compression regimes on the daily and weekly — and doing it with real momentum. He’s also been watching VIX futures track spot VIX much more closely than they did at the start of the war, which he reads as vol traders not pricing in a quick reversion.

SpotGamma recently made a similar point, writing: “The role of dealer positioning sits at the core of the market’s regime shift. To put it simply, the stabilizing force of positive gamma is now absent.

“We remain firmly in a negative gamma environment, where dealers hedge with price action—selling into weakness and buying into strength. This flips the market’s behavior from mean-reverting to momentum-driven, increasing the likelihood of any sharp directional movement.”

This is important. Expect larger moves going forward.

Trifecta Charts

5. Getting closer… Trend Fragility fell to a reading of 22% last week. Need a cross below 20% to give a conditional capitulation signal.

6. And still no signs of a washout from our Capitulation tab.

7. One bright spot in an otherwise bleak backdrop is our Aggregate Breadth Score actually rose one point last week. This is because this indicator also includes various divergent measures of breadth, as well as nominal.

My base case is that we’re forming what will become a larger, volatile sideways range, which may become a much larger cyclical top depending on how things progress on the geopolitical front.

Macro

8. State Street’s PriceStats MoM% index shows that inflation is going to become a real problem if the Strait isn’t reopened soon.

9. More importantly, if we don’t see resolution soon, recession risk starts getting priced in. Central banks are laser-focused on wages becoming the next inflation problem — but the labor market may not even be strong enough to get there. Meanwhile, unemployment has appeared stable on the surface, but household sentiment tells a very different story. The latest Michigan survey shows unemployment fears at recession-level readings (chart via State Street).

10. From BBG’s Simon White: “A splintering in increasingly fragile sentiment has the capacity to rapidly induce a recession, forcing an abrupt repricing of US rates. Recessions are born on negative feedback loops developing between hard and soft data. Hard data is rising; if soft data also deteriorates past a certain point, then recession risk will rapidly increase.”

Trade Setups / Topical Charts

11. The DXY is consolidating near the upper-bound of its 15-month rectangle pattern, as it caught a geopolitical risk premium bid this past month, which hit when bearish USD sentiment had reached a consensus. With US yields breaking out, we may see DXY follow. We’ll get long on a confirmed breakout (chart via Fidelity).

12. Earlier this month I pointed out the record long Spec positioning in long bonds, along with the bearish technicals giving us a solid short setup. This trade has played out nicely. Now, we have record-short positioning on the front end, along with deeply oversold levels across all timeframes. This move looks overdone to me, as the longer energy prices stay high, the greater the odds of a reflexive recession kicking off.

13. 2s have put in a double bottom on the daily. We’re taking a swing at getting long.

14. Last week, we started dipping our toes in on long spot silver and gold miners. This is a small tactical trade as we test the waters. But there is evidence that we’re getting nearer to a bottom.

SentimenTrader’s Optix crossed below 20 last week. Gold was higher 12m later 89% of the time.

15. Idaho Strategic Resources (IDR) continues to be one of our favorite plays in this space, as it’s one of the few junior gold producers actually making money — strong cash flows, with a clear production ramp ahead. The stock’s cheap on gold alone, but the market is completely sleeping on what could be a massive rare earths + thorium play at Lemhi Pass. Collective members can find Brandon’s write-ups on IDR going back to 23, when he first started pitching it.

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Thanks for reading.

Your Macro Operator,

Alex

In March of 2023, I joined 25 others for a week-long psychospiritual retreat on the outskirts of Petaluma. Among us: a CFO of a Fortune 500 company, multiple entrepreneurs and founders, at least one billionaire. We came to unravel the unconscious patterns steering our lives.

Our phones and laptops were locked away for the retreat’s duration. We knew each other by nicknames only. No talk of professional identity was allowed until the final day.

Despite our varied backgrounds, the patterns were the same. Our facilitators had seen them time and again. Some obvious: No matter how much money I make, it’s never enough. Others, more subtle: Seeing negative emotions as personal failings.

One pattern jumped out at me: Can’t look foolish.

Across the week, I traced this pattern’s origins and the ways it had been reinforced. A home where missteps were named and shamed. A school system that rewarded recitation over experimentation. A work culture that promoted confidence over deference.

Of all the patterns we unpacked that week, this one speaks most forcefully during market volatility.

Each gap down brings cries of risk off. Each gap up, a hedge. “Nibbling here.” “Adding back.” “Reversing with a tight stop.”

I used to see this as tactical opportunism. Now I see it for what it is: the compulsion to act so that, should the market bottom tonight, “I didn’t get shaken out.” I wasn’t fooled.

These trades never add to an edge. And the mental drain of the constant in-and-out suffocates the creative flow that could be put to use sharpening one’s sword or developing new playbooks.

If you’ve found yourself tethered to each market open and close this month, consider what unseen pattern is puppeteering you. Not to shame it. To see it clearly.

The pattern you’ve been rewarded for all your life may be exactly what’s working against you right now.

Guidelines for a Selloff

In the March 7, 2026 issue, I shared that our Macro Ops team had flattened our equity book.

That Friday, the primary trend filter for my long-equity breakout system flashed risk off. It’s remained risk-off since:

From that same issue, NQ is moving toward its 22,200 measured move target:

The Nasdaq 100 Equal Weight has already reached its measured move target of 123.50:

Even the poster child of the AI revolution is threatening breakdown from a Head & Shoulders Top:

It’s important to remember what measured move targets are—and what they are not. A measured move target is not a prediction. It is neither a minimum nor an extreme.

It is simply a guideline.

In the most basic sense, a measured move target says: “Price could reasonably move to this level because, very recently, price repeatedly made the same size move within a range.”

No magic about it.

The Pauses that Refresh

There are a number of patterns that have held their consolidations, as well as many opportunities to play on the short side or between range boundaries. If these are playbooks that you have yet to develop, now could be the perfect time to do so.

Here are the names that grabbed 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.

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​​​​​​​MO Portfolio & Trades ​​​​​​​

1. Portfolio fell -150bps on the week, sitting at +41.3% on the year.

Still running high cash. Core book: long crude, short EM, long HRW Wheat, long sugar, long corn, long BBG Commodities ETF, plus a couple idiosyncratic equity names.​​​​​​​

​​​​​​​2. Two weeks ago I flagged the developing double-bottom in sugar — Trifecta setup with sentiment, macro, and technicals all lining up. Last week confirmed the bottom and it’s off to a nice start. We’re long. ​​​​​​​

3. Back in early March we wrote about record Small Spec longs in UST bonds syncing up with a bearish technical picture — good short setup. We took profits too early and it kept running. It’s nearing larger support now, so we’ll see how it reacts. Still in a larger compression regime and increasingly looks like this could just be the beginning of a much bigger move lower.​​​​​​​

​​​​​​​Trifecta Charts

4. Trend Fragility getting closer to a conditional bottom signal, but we’re not there yet. As we saw in ‘22, this condition can persist. Patience. ​​​​​​​

5. Worth keeping an eye on internals — they should lead or at least confirm any real bottom. Starting to see some potentially constructive action in Discretionary vs. Staples, Cyc vs. Def, High vs. Low Beta, and SMH vs. SPX. Too early to call anything, but worth watching.

6. Aggregate Breadth Indicator fell to +2 last week — first time since the Mar/Apr 2025 selloff. Not great. If breadth can’t hold here, we’re probably in the early stages of a larger move lower.. ​​​​​​​

7. Russell 3k % of stocks above their 50 and 200dma are still well above washout levels (sub-20%). Bottom line: equities selling off, bonds dumping, credit spreads widening, and we still haven’t hit washout conditions. Hold cash, trade little. ​​​​​​​

​​​​​​​Macro ​​​​​​​

​​​​​​​8. From BofA…. ​​​​​​​

9. From @SubuTrade: “Cash allocations at 14.19% — investors holding the least cash in 4 years. This happened 3 times in the past 20 years: late-2017, Jan 2020, late-2021. Each preceded significant volatility and losses.” This checks with the FINRA Margin Debt data we shared last week.​​​​​​​

10. From BBG’s Simon White: “The commodity market’s view on the financial impact of the Iran war errs more bearishly than equity and rates markets. Commodity traders need only be half right on their current outlook for stock and bond pricing to be very wrong.” Worth sitting with. ​​​​​​​

​​​​​​​Trade Setups / Topical Charts

​​​​​​​11. Not seeing anything I love right now, but keeping a close eye on precious metals. Still one of our favorite multi-year trades — we haven’t even entered a classic PM bull market yet. ​​​​​​​

12. Silver is off nearly 50% from highs and approaching support. How it reacts here will be telling. ​​​​​​​

​​​​​​​Thanks for reading.

Your Macro Operator,

​​​​​​​Alex

Most retail traders catch the bug the same way: chasing fast money on the side. A good portion burn through their cash at the starting line. A smaller portion survive long enough to build something meaningful.

And for those who do, the goalposts shift. Trading is no longer about extra cash alongside a primary income. It transforms into a pathway to freedom.

But here’s what goes unseen: this idea of freedom gets misattributed to external circumstances, seen as manipulable by money. Traders convince themselves that hitting a certain account balance will resolve a restlessness inside them.

Some get stuck in this loop forever. The felt sense of arrival keeps receding. They hit their number, move the goalposts, hit the new number, move them again. Because freedom is overwhelmingly an internal state, not an external one.

But a small fraction—true outliers—either last long enough or hit a number so stunning, they actually pause. And in that strange space of having money concerns covered while witnessing all that money cannot solve, they ask: “What is the purpose of trading beyond individual financial gain?”

Here’s what I ask them to consider: trading has no purpose. Just as no professional title grants its holder a purpose. Instead, it’s the qualities we develop through the experience of trading that enable us to deliver on our deeper calling in the world.

Dr. Brett Steenbarger writes, “In mastering risk and uncertainty; in cultivating the ability to pursue opportunity in effortful ways; in making ourselves better as decision makers; in becoming more disciplined actors; we seize the opportunity not only to become better traders, but also to become better human beings.”

These qualities spill into every area of life. They make us better business partners, spouses, parents, and friends. And those relationships, deepened by who we become through trading, nourish us in ways money and market speculation never can.

This is where freedom actually lives. Not in trading, but in what striving for mastery builds within us.

Building a Commodities Playbook

For the last few issues, I’ve shared that equities have moved into a risk-off posture. So long as this condition remains, my primarily long equity breakout system is on pause.

When pauses such as this occur, it offers the opportunity for rich, in-depth post-analysis, and the development of new trading playbooks and complementary strategies. It was, in fact, just such a pause last year that allowed me to refine my breakout regime filters, and develop the intraday version of my end-of-day strategy.

This time, I’m turning my focus to futures, with a major focus on commodities.

Commodities have not played a major role in my trading since 2022. At that time, I traded them using the same framework and trade management as my equity trades.

Since then, my focus has been lasered in on equities: the specific patterns they form, how they move, the regimes they cycle through as definable by indices such as SPY.

And because of the intimacy I’ve developed with this asset class, the foundation I’ve used for approaching commodity futures is, ironically, equities. What attributes do they share? And, more importantly, where do they differ?

There is a single, often-overlooked page in Edwards and Magee’s Technical Analysis of Stock Trends that speaks directly to these questions. Here is what they write (emphasis mine):

“News about weather, drought, floods, etc., that affect the growing crop, if we are dealing with an agricultural commodity, can change the trend of the futures market immediately and drastically [...] Analogous developments in the stock market are extremely rare.

Under what might be called normal market conditions, those chart patterns which reflect trend changes in the most simple and logical fashion work just as well with commodities as with stocks. Among these we would list Head-and-Shoulders formations, Rounding Tops and Bottoms, basic trendlines. Trendlines, in fact, are somewhat better defined and more useful than in stocks.

Other types of chart formations which are associated in stocks with short-term trading or with group distribution and accumulation, such as the Triangles, Rectangles, Flags, etc., appear less frequently in commodities and are far less reliable as to either direction or extent of ensuing move. Support and resistance levels, as we have already noted, are less potent in commodities than in stocks; sometimes they seem to work to perfection but just as often they don’t. For similar reasons, gaps have relatively less technical significance.”

Whereas in equities, trends tend to build and reversals are rare, the opposite is true in commodities, where “immediate and drastic” reversals are commonplace.

Whereas in equities, the polarity principle—that prior horizontal resistance turns into new support and vice versa—can be used to protect stops, in commodities horizontal support is rarer and less reliable.

Whereas in equities, diagonal trendlines should be viewed with suspicion, in commodities they should be viewed with greater confidence.

An initial playbook can therefore adapt setups in equities with these differences in mind.

For my personal equity setups, two price pivots at the same horizontal level allows me to draw a support or resistance line. Three price pivots make that level tradeable. For commodities: two price pivots along the same diagonal level allows me to connect them as a trendline. Three price pivots make that trendline treadable.

Drop the rigidity of the 200EMA trend filter, as reversals are common.

Manage trades for “immediate and drastic” changes in price, rather than for the choppy backing and filling of equity trends.

The polarity principle should not be relied upon to protect stops.

Let’s look at some examples from my early chart model playbook:

A valid trendline in Soybean Oil Futures, May 2026 contract.

A decisive breakout through that trendline.

An immediate trend period.

A valid trendline in Coffee Futures, May 2026 contract.

A decisive breakout through that trendline.

An immediate trend period.

A valid trendline in Sugar No. 11 Futures, Jul 2026 contract.

A decisive breakout through that trendline.

An immediate trend period.

These are best-case scenarios: model charts that will live in my futures playbook.

They represent price action that is repeatedly identifiable, allows for a logical risk-defined entry, and offers asymmetric reward-to-risk.

Doing further work on the entry, stop and trade management techniques that fit my personal psychology, risk tolerance, and trading objectives is something I very much look forward to exploring over the coming months.

The Pauses That Refresh

There are a handful of patterns that have held their consolidations, as well as a number of opportunities to play on the short side or between range boundaries. If these are playbooks that you have yet to develop, now could be the perfect time to do so.

Here are the names that grabbed 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.

A lot has happened. We got back on the phone across two sessions on March 13 and 18. What follows is the edited transcript of those conversations, updated with context from market data and reporting through March 19.

The headline update from Mr. X: a regime change has already occurred in Iran — just not the one anyone was hoping for. Power has shifted from the theocratic class to the IRGC. The nuclear material question is more concerning than two weeks ago. And in the last 48 hours, the conflict has entered a genuinely new and more dangerous phase that deserves its own section.

The full interview — covering the GCC’s precarious position, a deflationary cascade scenario the market hasn’t priced, and a detailed breakdown of the China-Taiwan military picture and what a Chinese move actually looks like — is available exclusively to Macro Ops Collective members. We cut it off below so you can get a taste. If you want the rest, you know what to do.

Join the Collective

Where Things Stand: Tactical Win, Strategic Fog

Alex: It’s been about two weeks since we last spoke. Before specifics — how on or off script has this gone?

Mr. X: On the tactical side, the US military has executed well. The line of effort was clearly laid out: degrade ballistic missile launch capability, take out drone production, gut the IRGC and what was left of their conventional navy. They’ve hit over 6,000 targets. Launch-capable assets have been driven down from the hundreds to the low twenties or thirties. If you give the military a clear objective, they’ll accomplish it.

Mr. X: But strategically, I think this is going to fail. The stated objective for going in was removing Iran’s ability to build nuclear weapons. We hit Fordow, Natanz, and Isfahan back in June or July. But they already had the material to make roughly 15 nuclear bombs — and we don’t know where any of it went. We telegraphed our intentions publicly for months. They had time to disperse everything. Our analysts estimate 50 percent of the enriched uranium has been moved and or buried. You’re not finding that with airstrikes. You’d need boots on the ground and far better human intelligence than we have.

Alex: So we’ve degraded the delivery systems but potentially left the underlying material intact.

Mr. X: Exactly. And we may have created the exact conditions that incentivize them to use it.

The Regime Change Nobody’s Talking About

Alex: You told me something last week that I keep coming back to — that a regime change has already happened.

Mr. X: It has. Everyone keeps talking about regime change as the goal. I’d argue it already occurred — just not the kind anyone wanted. We went from the theocracy running the place to the IRGC running it. Nobody is discussing this.

Alex: Walk me through it.

Mr. X: When I was at the agency, our assessment was clear: Mojtaba Khamenei was not going to be the Supreme Leader. His father had essentially removed him from the line of succession. The reason Mojtaba went the IRGC route was because he knew he’d never have the religious credibility to lead the clerical establishment — no beard, no true scholarly credentials, fundamentally a military man. Then Larijani — the actual gatekeeper between the IRGC and the Supreme Leader, probably the second most powerful figure in the country — was killed. What I think happened is that the IRGC and Larijani together had positioned Mojtaba as someone they could control. With Larijani now gone too, the IRGC has stepped into that vacuum and consolidated power. That’s a regime change. It just went from father to son, which makes it easy to miss. But these are two fundamentally different power bases — religious versus military.

Alex: And practically, what does an IRGC-controlled Iran mean?

Mr. X: His father had a religious edict against nuclear weapons. That edict expired with his death. The IRGC are military thinkers. They watched us start bombing them in the middle of peace negotiations — twice in nine months, according to the Omanis. Their conclusion, the only rational one, is that they need a nuclear weapon for regime survival. I think that becomes priority number one now. And honestly? I don’t entirely blame them for it.

The Oman Foreign Minister Moment

Alex: Something significant landed this morning that I want your reaction to. Oman’s Foreign Minister Badr Albusaidi — the man who personally mediated the last round of US-Iran nuclear talks — published an op-ed in The Economist. He said, and I’m quoting here: ‘America has lost control of its own foreign policy.’

Mr. X: I saw it. It’s extraordinary. This is the man who was in the room. He’s a neighbor of Iran’s, a country that has itself been struck multiple times by Iranian missiles in this war. And he’s saying Iran’s retaliation was inevitable — that it was ‘probably the only rational option available to the Iranian leadership.’ He’s not a naif. He just has no incentive left to be diplomatic about what happened.

Alex: He writes that twice in nine months the US and Iran were on the verge of a real deal — and both times, hours or days after productive talks, Israel and the US launched military strikes. The UK’s National Security Advisor Jonathan Powell, who attended some of these talks, has confirmed that Iran was making genuine concessions on its nuclear program. And then the bombs dropped.

Mr. X: That’s the thing that I think has been underappreciated. The diplomatic damage here may be worse than the military damage. Iran has now been taught — twice — that negotiating with the United States is a trap that will literally get their people killed. The supreme leader gone, Larijani gone, commanders killed while talks were ongoing. What rational actor signs up for round three of that?

Alex: Albusaidi’s conclusion is that the greatest miscalculation wasn’t tactical — it was strategic. He writes: ‘Israel’s leadership seems to have persuaded America that Iran had been so weakened by sanctions, internal divisions, and the bombings of its nuclear sites last June, that an unconditional surrender would swiftly follow.’ And he adds — this is the brutal part — that for Israel to achieve its actual goal, the US would have to commit troops on the ground and open a new front in the forever wars. Which is exactly what Trump promised he would never do.

Mr. X: The IC’s read has always been that regime change probability is effectively zero. Not low — zero. And yet here we are, burning through stockpiles we need for other theaters, deploying carriers that are now approaching record-length deployment, at $200 billion in additional war spending the Pentagon is requesting. For an outcome that cannot happen. It’s hard to look at this and not conclude that we got played.

Israel Goes Rogue: The South Pars Strike and What Comes

Alex: I have to address what happened today, because it changes the picture significantly. Earlier today, Israel struck Iran’s South Pars gas field — the largest natural gas field in the world, shared between Iran and Qatar. Iran retaliated by hitting Qatar’s Ras Laffan LNG hub, two refineries in Riyadh, energy facilities in the UAE and Kuwait. Brent hit $110. Trump claimed the US ‘knew nothing’ about the Israeli strike, then threatened to ‘massively blow up’ South Pars if Iran kept hitting Qatar. Qatar — a US ally, home to Al Udeid Air Base — is now calling Iran’s retaliation ‘a dangerous escalation that threatens regional stability.’ Saudi Arabia says it reserves the right to ‘military actions if necessary.’ Oman, the only neutral party in the region, has been struck multiple times despite trying to stay out of it. What the hell just happened?

Mr. X: Israel played its hand. This is what I’ve been worried about. Look at the Gaza precedent. Israel leveled an entire territory, killed tens of thousands of civilians, did it openly, and largely shrugged off international condemnation. They developed a political tolerance for doing what they believe is necessary regardless of what allies prefer. That same logic is now being applied in Iran. Their stated strategic objective is permanent destabilization of the Islamic Republic. The US’s stated objective is much narrower — degrade military capabilities, then negotiate. Those are not the same objective, and we are discovering that the hard way.

Alex: An energy analyst I follow — Anas Alhajji — put it starkly. He says Israel is well aware of the basic equation: if it strikes Iranian energy infrastructure, Iran will retaliate against GCC energy facilities. That’s not a bug — it’s a feature. Either the GCC gets dragged into fighting Iran directly, which benefits Israel, or they suffer serious economic damage, which reduces their regional influence and economic power. Israel wins either way.

Mr. X: That’s exactly right. And the South Pars situation is worse than most people understand. That field is shared with Qatar’s North Field — it’s the world’s largest LNG hub. Qatar supplies LNG to Europe, Asia, everywhere. Qatar has already had to halt all gas production. The cascading effects of this aren’t just regional — they’re global. European gas is spiking. Japan, South Korea, the whole LNG import market is repricing. And if Iran hits Ras Laffan again, or the Saudis’ East-West pipeline, we’re talking about infrastructure damage that cannot be quickly repaired.

Alex: I’ve been thinking about the geography here, because I think maps are deceiving on the Strait. The way I’ve come to understand it: the shipping lanes don’t run straight through — they bend around the Musandam peninsula, and that turn exposes vessels to roughly 270 degrees of Iranian fire control from Qeshm, the surrounding high ground, and further inland. Iran doesn’t need to mine the entire strait or sink a ship every day. It just needs to make that turn lethal enough that no commercial operator will risk it. And the Red Sea precedent is worth remembering — the Houthis, a land power with effectively no navy, fought Operation Prosperity Guardian to a standstill against the most powerful naval force on earth. The Hormuz problem is harder than that.

Mr. X: That’s right. You close the Strait with fear, not hardware. One RPG from a speedboat and the next tanker turns around. And we have spent roughly $20+ billion in three weeks — primarily firing multi-million-dollar interceptors at twenty-thousand-dollar drones. That exchange ratio is unsustainable for everyone. We’re pulling Patriot batteries from Asia, compromising those theaters. The USS Gerald Ford has been deployed for 268 days and will reportedly break the Vietnam-era record for longest carrier deployment if this continues another month. The US is burning through capacity it needs elsewhere.

Alex: So where does this leave us? The off-ramp scenario you described two weeks ago assumed the US would want out after about a month of degrading Iran’s military infrastructure. But now Israel has just struck the world’s largest gas field and dragged Qatar into this. Can the US still engineer an off-ramp while Israel is doing this?

Mr. X: That’s the question I keep coming back to. And honestly, it’s getting harder to answer optimistically. The US objected when Israel first hit oil depots in Tehran without asking. Then, reportedly, the South Pars strike was ‘coordinated and approved’ by the Trump administration — or wasn’t, depending on which official is briefing which outlet on what day. That ambiguity is telling. Trump posted that the US ‘knew nothing,’ then threatened to blow up South Pars himself. That’s not the behavior of a country in control of its own war.

Alex: Which is exactly what Albusaidi said.

Mr. X: Right. And here’s what worries me most going forward: Israel’s interest is not a ceasefire. Israel’s interest is maximum degradation of the Iranian state, maximum isolation of Iran from its Gulf neighbors, and ideally an Iranian internal collapse that eliminates the threat permanently. The US’s interest — or what should be its interest — is a quick off-ramp that doesn’t destroy the global energy system, that doesn’t push Iran into building nukes, and that doesn’t turn every Muslim-majority country in the world into a recruiting poster for anti-American sentiment. These are not compatible objectives. And right now, one of those two countries has clear strategic vision and the other is improvising.

The GCC: From Safe Harbor to Target

Alex: Two weeks ago you said the GCC countries were not at serious risk of destabilization, that Iran’s attacks would produce a rally-around-the-flag effect, and that some were even discussing offensive operations. Does that still hold?

That’s where we’re cutting it for the free version.

The rest of the conversation covers what happens when those 200 million trapped barrels hit the market at once, Mr. X’s updated take on the China-Taiwan military picture, and his revised probability framework on how this whole thing ends. It’s the most important part.

If you want in, now’s a good time. We’re raising prices soon — keeping the Collective small and tight is a feature, not a bug — and the rate we’re at now won’t last much longer.

Join the Collective

Stay frosty,

Alex

​​​​​​​MO Portfolio & Trades ​​​​​​​

1. The MO portfolio gained +280bps on the week and sits at +42.88% on the year.

​​​​​​​We continue to hold elevated cash. Our core positions: long crude, short USTs, short NQ, long HRW Wheat, and long the BBG Commodities ETF.

2. Two weeks ago we flagged the bearish setup in the long end of the curve (link here) — that continues to play out. Last week we went short 2s on their bearish breakdown from a tight compression regime, following a bull trap the week prior.

​​​​​​​Fed meeting this week. We’ll adjust fire as needed.

3. We started last week short the Qs and added to the position as the week progressed. They’ve since closed below key levels on the daily and are now trading under their 200dma — the tape is confirming the thesis.

Nomura’s Charlie McElligott framed the broader dynamic well:

“The ‘Lazy Leverage’ that accumulated during sustained low vol is now being mechanically risk-managed lower as Commodity/Inflation/Rate-Vol risks simultaneously reprice... because the dirty secret is that every asset class is short interest rate volatility.”

Hard to say it better than that.

​​​​​​​Trifecta Charts

​​​​​​​4. The MO Liquidity Gauge fell again last week to 25% — its lowest reading in three years — and historically, that combination of level and trend bodes ill for forward 3-month equity returns.

​​​​​​​
​​​​​​​5. Our Head Technical Analyst Mike Gyulai’s Quantitative Trend Stability Model recently flipped bearish. In his latest note, Mike walks through what that signal means and how he adjusts his strategy in bearish regimes (link here

6. Still a ways to go until we get to a proper positioning and sentiment reset. ​​​​​​​

7. Retail flows have been the primary force sustaining this market for the past six-plus months. Schwab’s STAX index — which tracks actual retail activity — recently climbed to its highest reading since early ‘22.​​​​​​

8. Meanwhile, FINRA Margin Balance/Currency in Circulation is at an all-time high and straight margin is accelerating on a YoY basis. In any other environment, that would be noteworthy. Given current valuations — and the general state of the world — it’s a striking level of complacency. ​​​​​​​

9. On valuations — HF manager Colm O’Shea recently launched a Substack (link here) and his latest post is worth your time:
​​​​​​​
“Current valuations show the same level of optimism about future earnings growth as the 2000 dot-com bubble — except today’s earnings base is far higher. It is that combination that makes the current setup so extreme. What would earnings growth need to look like over the next decade for your stock market investment to simply keep pace with GDP growth? The chart below shows.”​​​​​​​

​​​​​​​Macro ​​​​​​​

​​​​​​​10. The Institute for the Study of War recently published maps tracking the conflict’s progression. The takeaway: the US is methodically degrading Iran’s drone and missile arsenal — the backbone of its war strategy. Iran is still throwing punches, but they’re not landing with the force an existential conflict requires. There’s more work to do, but writing this campaign off now is jumping the gun.Worth noting — ISW is writing primarily to US military objectives, which aren’t necessarily the same as strategic ones. An important distinction. ​​​​​​​

11. Oil’s impact on CPI via BBG. ​​​​​​​

12. Inflation swaps are starting to hockey stick higher. We were already expecting rising inflation in the back half of the year, but it’s looking less like a forecast and more like a foregone conclusion. ​​​​​​​

​​​​​​​Trade Setups / Topical Charts

13. Coal stocks are the obvious beneficiary if Hormuz stays choked and oil holds an elevated floor. The Global Coal Index ETF (COAL) monthly is worth pulling up — it’s showing a completed large inverted H&S nested inside a broader cup-and-handle. That’s a lot of constructive structure in one frame. The tape is telling a story here.​​​​​​​

​​​​​​​14. I ran through the index to find my favorites. Below are their monthly charts. TGA in particular is intriguing. ​​​​​​​

15. We’re short-term bearish on risk assets broadly, but crypto majors are worth watching. ETHUSD is holding a bid and diverging from general risk — running its own race, essentially. It’s also coiling in a tight compression regime, which means a move is coming. Direction TBD, but this one’s on the radar. ​​​​​​​

​​​​​​​Thanks for reading.

Your Macro Operator,

​​​​​​​Alex

QOTW via @Jesse_Livermore: “Best analogue I can think of for today’s market vibe is the period in mid Feb 2020 bf Covid when the news flow was uniformly negative but people weren’t selling bc they were bulled up on other themes and were scared of missing the uptrend that was set to resume once Covid faded.”

Jesse is spot on. We’re living through a major paradigm shift — multiple, actually — and the market remains deeply anchored to the recent past (as it has a tendency to do, see my AI Micron bull these from back in 2020 to learn why). The vol suppression, BTD mentality isn’t going away quietly. The next 6-12 months could be a very rude awakening.

MO Portfolio & Trades

1. The MO portfolio gained +280bps on the week and sits at +42.88% on the year.

We continue to hold elevated cash. Our core positions: long crude, short USTs, short NQ, long HRW Wheat, and long the BBG Commodities ETF.

2. Two weeks ago we flagged the bearish setup in the long end of the curve (link here) — that continues to play out. Last week we went short 2s on their bearish breakdown from a tight compression regime, following a bull trap the week prior.

Fed meeting this week. We’ll adjust fire as needed.

3. We started last week short the Qs and added to the position as the week progressed. They’ve since closed below key levels on the daily and are now trading under their 200dma — the tape is confirming the thesis.

Nomura’s Charlie McElligott framed the broader dynamic well:

“The ‘Lazy Leverage’ that accumulated during sustained low vol is now being mechanically risk-managed lower as Commodity/Inflation/Rate-Vol risks simultaneously reprice… because the dirty secret is that every asset class is short interest rate volatility.”

Hard to say it better than that.

Trifecta Charts

4. The MO Liquidity Gauge fell again last week to 25% — its lowest reading in three years — and historically, that combination of level and trend bodes ill for forward 3-month equity returns.

5. Our Head Technical Analyst Mike Gyulai’s Quantitative Trend Stability Model recently flipped bearish. In his latest note, Mike walks through what that signal means and how he adjusts his strategy in bearish regimes (link here).

6. Still a ways to go until we get to a proper positioning and sentiment reset.

7. Retail flows have been the primary force sustaining this market for the past six-plus months. Schwab’s STAX index — which tracks actual retail activity — recently climbed to its highest reading since early ’22.

8. Meanwhile, FINRA Margin Balance/Currency in Circulation is at an all-time high and straight margin is accelerating on a YoY basis. In any other environment, that would be noteworthy. Given current valuations — and the general state of the world — it’s a striking level of complacency.

9. On valuations — HF manager Colm O’Shea recently launched a Substack (link here) and his latest post is worth your time:

“Current valuations show the same level of optimism about future earnings growth as the 2000 dot-com bubble — except today’s earnings base is far higher. It is that combination that makes the current setup so extreme. What would earnings growth need to look like over the next decade for your stock market investment to simply keep pace with GDP growth? The chart below shows.”

Macro

10. The Institute for the Study of War recently published maps tracking the conflict’s progression. The takeaway: the US is methodically degrading Iran’s drone and missile arsenal — the backbone of its war strategy. Iran is still throwing punches, but they’re not landing with the force an existential conflict requires. There’s more work to do, but writing this campaign off now is jumping the gun.Worth noting — ISW is writing primarily to US military objectives, which aren’t necessarily the same as strategic ones. An important distinction.

11. Oil’s impact on CPI via BBG.

12. Inflation swaps are starting to hockey stick higher. We were already expecting rising inflation in the back half of the year, but it’s looking less like a forecast and more like a foregone conclusion.

Trade Setups / Topical Charts

13. Coal stocks are the obvious beneficiary if Hormuz stays choked and oil holds an elevated floor. The Global Coal Index ETF (COAL) monthly is worth pulling up — it’s showing a completed large inverted H&S nested inside a broader cup-and-handle. That’s a lot of constructive structure in one frame. The tape is telling a story here.

14. I ran through the index to find my favorites. Below are their monthly charts. TGA in particular is intriguing.

15. We’re short-term bearish on risk assets broadly, but crypto majors are worth watching. ETHUSD is holding a bid and diverging from general risk — running its own race, essentially. It’s also coiling in a tight compression regime, which means a move is coming. Direction TBD, but this one’s on the radar.

Thanks for reading.

A colleague of mine told me about the risk manager he worked under. The relationship sounded downright abusive.

The manager would constantly watch over his shoulder, critiquing every chart analysis and order entry. “Everyone else on the floor is having a great month … what’s your problem?” he would ask.

When a trade would stop out, there was the manager again: “That was a dumb place to put your stop. Of course it got run.”

The manager never left my colleague’s side. Always pointing out what he could have done better, framing a profitable trade as a gift from the heavens, blaming losing trades on his incompetence.

He tried to motivate through criticism, shame, and pressure. This made the manager terrible at his job.

My colleague was more uncertain in his trade plan, more anxious in his order entry, more focused on avoiding the next verbal thrashing than on creatively adapting to the market environment and professionally stewarding the firm’s capital.

I told him he had to fire that manager. Find a new one within the firm. Or move firms entirely.

He told me he couldn’t. Because wherever he went, the manager would follow.

The manager didn’t work for the firm. The manager was the voice in my colleague’s head.

Most people battle with their inner critic. They try to silence it, argue with it logically, suppress it. This only entrenches its authority.

The real issue isn’t the voice. The issue is believing it’s an effective manager.

See through this fallacy. See that the voice is driven by fear. That it hasn’t improved your trading one bit.

Then, give that manager the performance review he deserves, and fire him.

Trade Tactics for Bear Markets

Last week, when I shared a chart depicting my long equity regime filter closing, a member of The Collective asked if I simply inverted my trade tactics for bear markets.

My response: “I wish it were so simple …”

Bear Market declines in equities are not the mirror reflection of Bull Market advances, as much as I’d like them to be.

Two things work against trading equities to the short side in Bear Market Regimes: 1) the volatility of the regime and 2) the math of short-side trading.

Let’s start with the math.

On the long side, the math works with you. A $100 stock moving to a measured move target of $130 in three $10 legs requires 10%, then 9.1%, then just 8.3%. Each leg gets easier. Each dollar gain is a smaller percentage ask. Momentum compounds favorably.

On the short side, the opposite is true. That same stock falling that same $30 measured move requires 10%, then 11.1%, then 12.5%. The market must accelerate in percentage terms just to sustain the same dollar move.

While stocks can crash dramatically in percentage terms, maintaining a large dollar move to the downside means the percentage hurdle keeps rising at every step.

And as traders, we are paid by dollar moves.

This asymmetry makes simply flipping a long setup to a short one a more mathematically challenging trade.

This is also why the old saying, “stocks take the stairs up and the elevator down,” is only partially true in percentage terms.

Which brings us to the second major difference about Bear Market Regimes: volatility.

In the Classical Charting bible, Technical Analysis of Stock Trends, Edwards & Magee note that “[Bear Market] down trends are far less regular and uniform in their development than Bull Market advances.”

A figure early in the book highlights a prominent price action feature of Bear Markets: “’Rounding patterns’ [...] typical of rallies in a Primary Bear trend.”

The sustained Bear Market of 2022 exemplified this pattern beautifully:

Far from the “regular and uniform” Bull Market advances, these Rounding Patterns wreak havoc on breakout entries.

Individual equity names will breakdown coincident with a swing low breaking in the indices:

The weakest stocks will make progress toward their measured move targets. The most resilient will just poke through the lower boundary of their consolidations.

Both happen right before a screaming rally back toward the long-term moving average:

I’ve found that these massive rallies, which form the crest of each Rounding Pattern, can stop out even the best looking short setups.

So, as traders, we have to adapt to these market conditions, and adjust our tactics for the Bear Market Regime.

Looking at the charts above in hindsight, the worst place to have shorted would have been in those red boxes. And the worst place to long? The green boxes.

Consider instead: going long in the red boxes and short in the green boxes.

Do not mistake what I’m suggesting as trying to bottom fish or top tick. These are a fool’s errand.

Instead, if we understand that short setups fail and reverse in the red boxes … why not long a failed short setup in this regime, targeting the opposite side of the range?

And if long setups fail and reverse in the green boxes … why not short a failed long setup in this regime, targeting the opposite side of the range?

I’ve found these tactics to be far better suited to Bear Market Regimes than simply inverting my long-side tactics built for “regular and uniform” Bull Market advances.

When the environment is different and the math is different, the tactics, too, must adjust.

Nasdaq’s Roundtrip

In last week’s issue, I covered the consolidation in the NASDAQ between roughly 25,430 and 24,430. I mentioned that this one-month consolidation stood right at the convergence of the (potential) Ascending Triangle’s lower trendline and the 200EMA, which would warrant any breakdown meaningful.

Monday saw the 25,430 level vigorously defended, further showcasing its importance for market participants. By Friday, we round tripped right back to it.

The Nasdaq-100 Equal Weight continues to look like an underside retest of a breakdown.

Expect heightened volatility around the 200EMA of NQ next week. The level has proven significant to market participants, and those who defended it are now under real pressure.

The Pauses That Refresh

There are a number of opportunities to play on the short side or between range boundaries next week.

Here are the names that grabbed 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.

I told myself it was the necessary sacrifice for the high-level of achievement I desired.

From today’s vantage point, I can see it was something else.

Last fall, David Senra’s appearance on the Tim Ferriss podcast gave me the vocabulary for what it actually was. Senra runs Founders, a podcast distilling biographies of history’s greatest entrepreneurs into practical lessons. After 400 biographies, he’s identified a pattern in what drives extreme performers: what he calls Dirty Fuel versus Clean Fuel.

Dirty Fuel presents as fear, shame, insecurity, the need to prove oneself.

Clean Fuel as curiosity, pride in craft, joy in work, the desire to build something meaningful.

Both fuels can power obsession. Both can produce results. But only Clean Fuel creates sustained excellence, performance longevity, and a life worth living.

Obsession is the engine. What fuels it determines the life you get.

Those guest-room holidays were obsession burning Dirty Fuel. Below conscious awareness, I felt I had to prove myself through performance metrics—or pure work ethic if those metrics weren’t corroborating my own impossible standards.

No amount of backtesting or study was going to satisfy. The horizon of “good enough” perpetually recedes.

I’d squeeze every ounce of expectancy from a system, feel the inner critic pipe up anyway, and reset the whole venture: new timeframe, new asset class, new setup criteria. The work was never done because the real unrest was never truly about the work.

In 2022, I recognized what was fueling my obsession. Since then, shifting the fuel source has been a practice: quiet, ongoing, and intentional.

Now in my 40s, I carefully consider any urge to swap the face of a loved one for my laptop screen—during the winter holidays, dinner with my wife, an afternoon walk with our two dogs.

I remain obsessed with this work. What fuels that obsession could not be more different.

Here’s how this shift has presented in practice.

Last year, I completed the latest iteration of my equity breakout system. It required immense amounts of data collection, pattern recognition, trade log analysis. I surgically defined the timeframe, asset category, and setup criteria for my highest-expectancy trades.

When I reviewed the final statistics—Profit Factor, Calmar Ratio, Expectancy—there was a genuine sense that I’d squeezed the last ounces out of this approach.

The statistics were excellent by every measure.

Running on Dirty Fuel, that familiar inner critic would have surfaced anyway: not good enough. And I would have torn it down and started over.

Instead, running on Clean Fuel, I sat with what I’d built and asked with genuine openness: What else wants to be seen here?

What emerged surprised me.

A number of my system’s winning breakout trades had formed short consolidation patterns—high bases and flags—while trending toward their measured move targets.

Looking closer, my failed breakouts rarely exceeded a 1R Maximum Favorable Excursion (MFE) before stopping out within days of entry. Successful breakouts, by contrast, ran for weeks, sometimes months.

Curiosity asked: “What if I defined a sub-universe of opportunities within my own active breakout positions: only those that had already surpassed 1R MFE and been held longer than a week? What if I screened for high bases and flags within those positions, using the sustained breakout as a favorable regime filter for the shorter-term setup?”

What revealed itself was a new opportunity hiding in plain sight: a way to add to winning breakouts using tightly defined risk, compounding gains on trends that had already proven themselves.

As these opportunities emerged in real time, I shared them with The Collective:

This is what Clean Fuel looks like in practice. Not turning against what is. Not resetting in pursuit of a receding horizon. But observing with patient curiosity to see what else wants to be seen in what already exists.

Dirty Fuel would have burned the system down and started over.

Clean Fuel found an entirely new edge inside the one I’d already built.

When I shared Senra’s framework with The Collective last fall, the response was immediate. Members finally had a vocabulary for why strong performance had at times felt turbulent and disjointed … and at other times expansive and aligned.

In the Macro Ops Collective, we don’t just pursue outstanding returns. We pursue sustained excellence, performance longevity, and a life worth living.

If you’re ready to upgrade the fuel source powering your obsession, I invite you to join us.

Enrollment is open until this Sunday at midnight.

I look forward to seeing you inside.

Join the Collective

The goal is simple. I want to say:

1. Here are the strongest thematics over the past year, and here are the best/most actionable setups within those thematics (RS Composite).

2. Here are the strongest thematics over the past 1-3 months; maybe they’ll become the next Relative Strength leaders, and here are the best setups within those thematics (RS Inflection).

We’re obsessed with stacking edges at Macro Ops. Specifically, we focus on three primary edges: Technical, Macro/Fundamental, and Sentiment. This is the bedrock of our Trifecta Lens Trading Philosophy.

The trades that show technical confirmation, fundamental conviction, and asymmetric sentiment tend to be the trades that make our year.

Here’s how the RS Inflection Report helps us find these trades.

The report identifies two of our three edges: technical and sentiment. With one report, we filter the market to the industries and thematics that are outperforming their peers (inflecting higher and showing relative strength leadership) and breaking out of long-term bases in sectors and corners the market has either forgotten or left for dead.

Last summer, the RS Inflection alerted us to solar stocks when nobody wanted to touch solar or renewable energy. It allowed us to build a basket in the relative strength leaders in a left-for-dead (but inflecting) thematic and bag a few profitable trades.

Then, in September, the report flagged lithium as the next potential commodity to move. Lithium ETF $LIT is up 40%+ since then.

Again, it’s about stacking edges … finding setups where technicals, fundamentals, and sentiment align to give us a profitable, repeatable pattern for making money in markets.

We share these reports and individual stocks within our Thematic Leaders each month in our Macro Ops Collective.

If you’re interested in joining and learning more about our Trifecta Lens Process, click the link below.

Just a heads up, we’re raising prices soon. Not as a gimmick. We’re keeping the community at a size where it actually works, not to mention a few new tools, products, and in-person events that get us pumped. If you’ve been on the fence, it’s time to jump!

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Alright, now onto this month’s RS Inflection Report.

Two weeks ago, I described my relationship with AI tools, the dark path I found myself on, and actionable steps I could take to get the most out of them without offloading the critical-thinking part of my job.

Improving our Trifecta Lens Pulse Reports is a perfect use case for Claude/AI tools, and I’m excited to share the results with you.

Top Five RS Inflection Leaders Heading Into March

Here are the top five Thematic Leaders as of 02.28.2026:

1. Global Shipping (BOAT)

2. Oil Services (OIH)

3. Silver Junior Miners (SILJ)

4. Energy Producers/Explorers (XLE/XOP)

5. Gold Miners (GDX)

You can see the full top-ten list below.

The only thing that matters on this list is oil. Oil has inflected sharply over the last two months and is finally flashing the technicals “green light” in our Trifecta Lens Criteria. Funny enough, all that inflecting happened before any of the Iran war news … maybe price is king?

Speaking of price is king, I can’t believe I missed this BOAT trade. Look at the weekly chart below.

That’s as clean a setup as you could ask for … breaking out from an inverse H&S to new ATHs on a strong weekly bar. The market never stops throwing me “don’t overcomplicate this game” reminders.

Anyways, here’s our current portfolio positioning relative to our thematics (rounded):

• Metals & Mining: 22%

• Oil & Gas: 36%

• Aerospace & Defense: 11%

• Other: 19%

We own the stuff that’s working and inflecting, but I want more oil exposure going forward (I’m thinking 50%+ notional). Check out some of these oil thematic monthly charts.

Here’s OIH.

It’s breaking out of a 7-year ascending triangle bottoming pattern. Then there’s XOP (see below).

It’s forming an 11YR inverse H&S reversal pattern (with a four-ish-year rectangle-launching pattern). Again, we don’t need to overcomplicate things. Buy inflections with charts that look like XOP and OIH.

Now, about the Claude-assisted RS Inflection Analysis. Let’s explore “under the hood” with our RS Inflection Thematics.

Under The Hood: RS Inflection Screener Analysis

One of the improvements I made in December was adding RS Inflection & Composite Screener Analysis. Now, powered by Claude.

Here’s how it works.

I screen for stocks based on the same RS Inflection and Composite criteria as above. The result is a detailed breakdown of which industries, sectors, and stocks meet that criteria, and most importantly, the changing distribution of industries, sectors, and thematics over time (MoM).

Warning, this will get “data-heavy” real quick. If you’re a data nerd, you’ll love this. If you’re a visual, chart-based Operator, don’t worry, I’ll get you later.

Sector Distribution & MoM Change

Consumer Staples gained the most share (+2.7%), followed by Energy (+2.4%) and Industrials (+1.0pp). Communication Services (-2.4%) and Financials (-2.0%) saw the largest declines. Materials held steady as the largest sector at ~17%.

Remember, it’s all about energy.

February 2026 Top Industry Rankings

A few notes from this ranking:

1. Oil & Gas Consumables gained twelve spots from January and ranked fourth in February’s Top 10 (was 16th).

2. Machinery stocks climbed eleven spots to sixth on this month’s list (was 17th).

3. Semiconductor & Semiconductor Equipment stocks doubled their share in February, jumping 13 spots from 21st to 8th.

Software, Specialty Retail, and Construction & Engineering exited the Top 10 in February.

Industry Share Movers (% of Screened Results)

We can also view the biggest industry movers as a percentage of their share of the screener results (see below).

Oil and gas, machinery, and semiconductors showed the strongest MoM share growth, with oil and gas doubling its share from January.

Relative Strength Profile: Detecting Inflection Levels

Another interesting analysis exercise is determining the “Inflection Strength” of each thematic or industry. We can find this by measuring the spread between long-term relative strength (1YR) and short-term relative strength (1M/3M). The larger the spread, the stronger the inflection.

Here are February’s results.

This is the RS Inflection Report in one picture: show me the industries/thematics that have the strongest inflections over the prior month.

Also, the spread doesn’t discriminate against past success. Oil and Gas has a 70 1YR RS score, that’s great. But it still shows up in the top three because its 3M RS score is so high (93). It reminds me of what Druckenmiller always says about conviction (and I’m paraphrasing):

“Sometimes conviction means that the opportunity set is actually a lot bigger (and more profitable) than consensus. So even though I may be with the crowd, I can have conviction that the future will look even better than what everyone else thinks.”

From Data Gathering To Idea Generation

All of this data is nice, but it’s worthless if we don’t turn it into an actionable pipeline for idea generation.

I know I just gave you a lot of information, so here’s how I would use this report to plan your monthly investment research:

1. Focus most of your time on the thematics/industries that frequently appear in the top three inflection rankings (Oil and Gas, Metals and Miners, and Machinery stocks this month).

2. After that, spend the rest of your time on the Strongest Inflection thematic/industry (i.e., the one with the highest spread). This could be the next RS Composite leader. This month, that’s Health Care Equipment and Supplies.

3. Download the RS Inflection Watchlist (here) and use Koyfin’s Lots of Charts function to find the best-looking charts (long-term bases, deep pullbacks finding support, potential breakouts, etc.).

Let’s head to the charts to find this month’s setups.

Oil & Gas/Services: This Month’s Big Thematic

Oil and gas is our biggest thematic focus this month. As such, we’re spending most of the month looking for Trifecta Lens setups to add to our portfolio (and get O&G weighting to 50%+).

Here are a few ideas that warrant further attention.

Tourmaline Oil (TOU.TSX)

TOU is Canada’s largest natural gas producer operating from three main areas: Alberta Deep Basin, NEBC Montney, and Peace River. The stock trades at 7x NTM EBITDA with a 5% dividend yield. There are two things I love about this setup:

1. TOU’s monthly chart

2. Natural Gas chart

Check out TOU’s monthly chart below.

The stock is compressing within a four-year ascending triangle (hugging the 50D). But check out natural gas futures, too (see below).

Natural gas is bouncing off 1YR+ support around $3. TOU reports earnings in a week. We’ll see if we get an entry bar post-earnings to go long.

Diversified Energy Company (DEC.NYSE)

DEC is a $1B market cap company that produces, transports, and markets primarily natural gas and natural gas liquids from existing assets in the U.S. Appalachian and Central regions.

It’s one of the cheapest companies in the Energy space, trading at ~1x TBV and 4x LTM FCF.

The stock trades in the middle of a ~2YR rectangle base with increasingly compressed volatility (see below).

Parkmead Group (PMG.LSE)

PMG is for those who love London-based, left-for-dead, micro-cap companies (does that person actually exist?).

The company trades for a $33M market cap with $16M in net cash (50% of MC) and no debt. Historically, the company had a mix of exploration, development, and renewables assets in the UK and the Netherlands.

At today’s price, you’re getting the operating company for $16M in cash and 0.9x book value. Who knows how much book value is actually worth? But the stock is bouncing around support as energy/natural gas enters an upcycle.

Healthcare: Strongest MoM Inflection

Healthcare is eighth in our RS Inflection Sector Ranking and had the strongest inflection within its sub-industry (Equipment and Supplies).

This is another reason I love the RS Inflection Report. I haven’t touched healthcare this year. The only connection I have with healthcare stocks is hearing Druckenmiller call healthcare and biotech “the best use case out there of AI.”

I don’t know … if it’s good enough for Druck, it’s good enough for me. Here are a few interesting names in the healthcare/biotech thematic.

Legend Biotech Corporation (LEGN)

LEGN is a $3.4B market-cap company that discovers, develops, manufactures, and commercializes novel cell therapies, primarily for oncology. According to Koyfin, its lead product candidate is ciltacabtagene autoleucel (cilta-cel), a chimeric antigen receptor (CAR-T) therapy for the treatment of multiple myeloma (MM).

The company also has a portfolio of earlier-stage autologous CAR-T product candidates targeting various cancers, including Non-Hodgkin Lymphoma (NHL), acute lymphoblastic leukemia, gastric cancer, esophageal cancer, pancreatic cancer, colorectal cancer, hepatocellular carcinoma, small cell lung cancer, and non-small cell lung cancer.

The stock is down ~50% since its 2021 IPO. Bombed-out biotech trading near its lows, what’s to like? A lot, actually.

LEGN trades at the cheapest level in its 10-year history at 2.5x NTM Sales and 54x earnings (at least it has earnings!).

Now look under the hood. Since 2021, LEGN has grown revenue from $69M to $909M, increased gross profit from -$245M to +$133M, and reduced net losses from ~$400M to $240M.

Everything about the business has improved except the share price (see below).

The company reports earnings in six days. I have an alert set for a breakout above its January 2026 highs, signaling a mean-reversion long setup.

OrthoPediatrics Corp (KIDS)

Going back to Druck’s comments on AI-winners within healthcare/biotech, I wonder if orthopediatrics would fall into that category. My high-level thesis is that AI will enable better, cheaper, and more anatomically aligned prosthetics and deformity correction products (KIDS’s core market).

Additionally, there could be an element of “brand trust” within this orthopedic segment. Take bike helmets, for example. Does everyone wear MIPS helmets because they’re the best product on the market? Probably. But could the reason also be simply that everyone else wears MIPS helmets?

I wrote about MIPS’s economic moat here.

Who knows. Maybe parents feel more comfortable with a “KIDS-specific prosthetic or deformity device” than other products.

That said, the company appears to be inflecting as it bounces off all-time lows. Here’s a snippet from the latest earnings report.

The business is inflecting positively, while the stock remains at all-time lows and is at its most fundamentally cheap. KIDS trades at 2x NTM EV/Sales and 3x gross profits. This is the same company that grew revenue by 15% YoY while generating positive FCF for the first time in the company’s history.

Since its inception, KIDS has traded at an average EV/Sales of ~6x. The stock is a double if it trades within a 1std range around 3.5x current sales.

Check out the monthly chart.

This is a stock that’s been left for dead at the exact moment its fundamentals are inflecting higher … not to mention the potential AI benefits along the way. You have a clear R/R setup to buy above this consolidation, with a stop below the all-time lows.

That’s all for this week.

If you’re interested in joining and learning more about our Trifecta Lens Process, click the link below.

Again, we’re raising prices soon. Not as a gimmick. We’re keeping the community at a size where it actually works, not to mention a few new tools, products, and in-person events that get us pumped. If you’ve been on the fence, it’s time to jump!

JOIN THE COLLECTIVE

I ask every new member of our Collective this question. Most answer quickly. Kiran couldn’t.

“I believe I harness the ability to see the big picture,“ he wrote to me. “But I noticed that I don’t take trades, or my timing is off. How can I improve this?“

The standard recommendations would be purely tactical: timeframe alignment, position sizing, a framework for scaling in or out.

But something in his answer stopped me.

I’ve learned that when someone describes a “weakness,” it’s often not a weakness at all. It’s a strength overshadowed by the wrong context.

I probed deeper: “Give me a specific example of a recent ‘big picture’ view you had that was ultimately correct, but where your execution felt mistimed or didn’t happen at all?”

His answer revealed everything.

Kiran told me about RBLX. He bought it at the IPO on fundamental conviction. He saw the moat, believed in the growth story.

He watched it double, didn’t sell, then watched it fall 60%. He held through the entire drawdown: over three years. Eventually, RBLX recovered, Kiran’s thesis proved correct, and he sold his position for a profit.

Kiran told this story as a failure:

“I would have liked to exit at the double and then get back into the position. I’m not too good at taking profits. I always think [my high-conviction bets] will rise more. I need to improve that skillset.”

Kiran had made a high-conviction investment, held through extraordinary volatility, been proven right, made money … and was beating himself up for not trading the cycles in between.

Kiran wasn’t a trader struggling with discipline. He was an investor drowning in trader guilt.

I helped him see who he actually was.

“If you could design your ideal approach to markets with no judgment from others, what would it look like?”

He sat with it. Then: “I would make 5-10 high-conviction investments per year and manage them over 2-5 year periods.”

There it was.

Not because I told him. Because he finally let himself say it.

The “missed opportunities” he’d been flagging—the cycles he could have traded within RBLX’s big move—weren’t real. They were fiction.

The version of himself who perfectly timed the double, had the courage to buy back at -60%, and rode it back up, doesn’t exist.

If he’d tried to trade those cycles, he almost certainly would have found re-entering during the drawdown too unsettling and messy—and ended with less money and more regret than the investor who simply held.

What Kiran needed wasn’t better discipline. He needed permission to lean into what he does naturally well and others find genuinely difficult: holding high-conviction investments through massive cyclical volatility that would shake out even the most cold-blooded short-term traders.

We built a simple structure around who Kiran actually was:

5-8 positions maximum, 18-to-24-month minimum holds, and a quarterly review of each position based not on time or price, but on the original business metrics that had validated the investment in the first place.

We agreed to one tactical overlay for regret management: when a position doubles, consider trimming 25-50%—not to redeploy, but to create dry powder for the next high-conviction idea.

Just portfolio management within an investor framework.

Not fixing weaknesses. Sharpening the right strength.

I believe Kiran’s struggle is more common than most traders realize. How many of us are trading a certain way because we think we should?

How many of us are experiencing not a skill deficit, but an identity mismatch: trying to execute one strategy while our psychology is quietly wired for another?

The fastest path to consistency isn’t learning to override our natural tendencies. It’s building around them.

So here’s the question worth sitting with:

Are you trying to fix a genuine weakness, or overshadowing a real strength by the wrong context? Are you struggling with discipline, or struggling with an identity that was never meant to be yours?

Kiran is no longer fighting himself. He’s building on who he naturally is.

If you’re ready to build on who you actually are—not who another trader says you should be—I invite you to join the Macro Ops Collective, where mastery in markets and mastery of self are considered intrinsically inseparable.

Enrollment is open until this Sunday at midnight.

I look forward to seeing you—and your natural strengths—inside.

Join the Collective

Today I’m sharing excerpts of an interview we conducted last week with members of our Collective and a former intelligence officer — someone who just left one of the three-letter agencies, where his entire focus was on Iran. It’s the most clear-eyed, unfiltered read on what’s actually happening there. I think you’ll find it worth your time.

But first, a quick share on why we were positioned for this before it all started.

John Arnold — one of the greatest energy traders who ever lived — was recently on Invest Like The Best. Great episode, highly recommend giving it a watch (link here).

In it, he credits his success to a concept he calls the best seat in the business. Not the best model. Not the most rigorous process. The best seat. What he meant was a self-reinforcing flywheel: the best economics let you hire the best people, the best people generate the best returns, the best returns attract more capital, more capital buys better data and better systems — and around it goes.

Until you’ve built something nobody else can replicate. The best perspective, the most information, the most advanced tools in the game. All of it compounding on itself.

That’s what we’ve spent the last decade building at Macro Ops.

My seat came out of the intelligence world. I spent years in it, kept the relationships, and kept listening. That network told us to go long oil and commodities heading into this conflict. It told us to cut our entire equities book last week and derisk. We’re up over 40% year-to-date. That same network had us positioned ahead of Russia’s invasion of Ukraine — long wheat, long European energy — while the consensus was still debating whether Putin was bluffing.

Brandon’s seat is different. Every week he sits down with top hedge fund managers and CEOs of companies we’re actively researching. Not once a quarter. Every single week. That’s a proprietary data source most investors will never have access to.

And then there’s the Collective itself — a Slack where professional fund managers and sharp independent investors share what they’re seeing from their own corners of the market, in real time, from genuinely different vantage points. Each member’s network and perspective feeds the whole. That’s the flywheel.

Druckenmiller said recently that after nearly thirty years, macro is back. We’ve been saying the same thing. We’re in the Fourth Turning — a convergence of technological, economic, and geopolitical forces that’s only going to intensify from here. What’s happening in Iran right now isn’t an isolated event. It’s the opening act of something much bigger.

In an environment like this, your seat is everything.

We’re opening enrollment to the Collective this week.

[Get your seat here.]

Today I’m talking with an old friend of mine, who, at his request, will remain anonymous and so be referred to as Mr.X in this interview. Mr. X has a long and storied career in defense and intelligence. He just recently left one of the three-letter intelligence agencies, where his focus was Iran.

We got on a call to talk through the Iran situation — what’s really driving it, who’s miscalculating and how badly, and what the realistic outcomes look like over the next six to twelve months. I had a list of questions from MacroOps readers (a sharp group, as always), and we just went through them. What follows is the edited version of that conversation.

The picture Mr. X paints isn’t particularly flattering for American strategic coherence. But it is, I think, an honest one. His bottom line: the US got suckered into this, Iran blundered spectacularly, regime change is a fantasy, and the most likely outcome is a messy negotiated off-ramp that leaves Iran diminished but intact. He puts the catastrophic scenario — a rogue IRGC igniting a full Gulf conflict — at under 20%.

Make of that what you will.

The Macro Picture: How the US Got Pulled In

Alex: Before we get into the reader questions — just give me your overall read. What the hell is going on, and why are we here?

Mr. X: Where do you even start. Look — this is a reckless endeavor that we got pulled into. It reminds me of 1950s, when Churchill basically dragged the US into toppling a semi-democratically elected Iranian government. We installed the Shah, and it’s been a quagmire ever since. Here we are doing it again — getting sucked into a conflict thousands of miles away where we have no real vested interest. Every Gulf country told us not to do this. We did it anyway.

Alex: So what’s the actual motivation?

Mr. X: We’re backing Israel in an effort to topple the regime. Netanyahu sees this as his legacy — getting rid of the Islamic Republic once and for all. But regime change is wishful thinking. Their apparatus is too strong. You take out the Supreme Leader, and the baton just passes to the next one. You’re still looking at a religious theocracy. The only real shot at something different would be an internal revolt — and even then, it would have to come from the Artesh, the regular army, rather than the IRGC.

Alex: Explain those two organizations for readers who might not be familiar.

Mr. X: Iran has two parallel military structures. The Artesh is the regular army — professional officers, many of whom trained at US war colleges during the Shah’s era. Khomeini didn’t trust them when he took over, so he created the IRGC specifically to protect the revolution. Two separate armies, very different cultures.

The history between them is brutal. When the Iran-Iraq War started in 1980, the regime had thrown most of the experienced Artesh officers in prison. Then they realized they had no one with actual command experience to fight the Iraqis. So they pulled the officers out of prison, promised them freedom after the war — and then executed most of them right after the ceasefire. That’s the kind of regime we’re dealing with.

Iran’s Spectacular Miscalculations

Alex: You said the Iranians screwed up royally. Walk me through it.

Mr. X: The DIA estimated Iran had roughly 3,000 ballistic missiles. If you’re going to use them, you concentrate fire on targets that matter — Israel and Bahrain, where the US Fifth Fleet is based. Instead, Iran fired nearly a thousand missiles at Gulf countries. The UAE shot every single one of them down. What Iran effectively did was let the Gulf States subsidize Israel’s defense.

And people don’t appreciate how layered the Gulf State missile defenses are. The UAE isn’t just running American tech — they have South Korean and Russian anti-missile systems as well. Iran spread their salvos so widely they even attempted to hit Turkey, which is a NATO member. You want Article 5 invoked against you? I don’t see NATO nations joining the conflict; however, they can certainly start deploying assets to assist on the defensive end, which France and UK have already started.

Their internal talking point before this started was: if we go down, everyone goes down with us. They tried to execute on it and failed completely. The Iranians are, frankly, hyper-irrational in their strategic decision-making. You know that concept in the Steve Jobs biography — the reality distortion field? These guys have a collective version of it. They genuinely believe that launching a missile at Israel, even after losing their Supreme Leader and their top commanders, constitutes a victory. I remember them pulling that logic after Soleimani was killed in Iraq and when Nilforoushan was killed in Lebanon.

Alex: Where does that mentality come from?

Mr. X: It’s a fundamental pillar of Shia identity — always being the underdog. When Khomeini took over in 1979, one of the revolution’s core tenets was to export it globally, which put Iran on a permanent collision course with the Gulf monarchies. They’ve been running proxy wars against those kingdoms for decades. Everyone knows it. No one says it out loud. But the IC and the military were not surprised when Iran started lobbing missiles at Gulf countries — they’ve been trying to destabilize those governments for years. They just severely underestimated how prepared those governments were.

And the diplomatic blowback has been severe. Before the attacks, Gulf countries were telling Israel they couldn’t use their bases. After Iran crossed the line by launching missiles against them, some of those same countries said: ‘okay, you can use our bases.’ Iran handed their adversaries the political permission slip to go fully on offense.

The Killing of AFGS Bagheri and Israel’s Decapitation Strategy

Mr. X: The single biggest mistake before all of this was killing AFGS Bagheri. He was probably the second most powerful figure in Iran after the Supreme Leader, and he was a relative moderate. Clean-cut military bearing — you’d notice him immediately in a lineup of Iranian military generals because he didn’t have the beard, didn’t have the Revolutionary look. He was the kind of figure the US could have worked with. Not regime change, but a managed transition to someone we could at least dictate terms to.

But Israel’s strategy — same as what they did with Hezbollah — is kill from the top and keep going all the way down. You elect a new leader, they go after him too. It’s been effective tactically, but it has foreclosed any path to a moderate successor.

GCC Stability and the Real Regional Risk

Alex: One of our readers asks: how likely is it that GCC governments themselves get destabilized — infrastructure damage, desalination plants, food imports slowing?

Mr. X: Not likely at all. These are Sunni kingdoms that deeply despise the Persians, Iranians, and Shiites — three separate reasons to hate them, as I like to say. Ballistic missile attacks on their territory aren’t going to fracture these governments politically. It is likely going to produce a massive rally-around-the-flag effect. The GCC was literally formed because of Iranian territorial aggression. Some of these countries are now openly discussing offensive operations against Iran.

The real risk isn’t GCC destabilization. It’s the IRGC speedboat navy. Iran’s conventional navy has been largely wiped out, but those small, fast, hard-to-track craft in the Strait of Hormuz — which is only about 21 miles wide — can do serious economic damage through sheer harassment. If they move to close the strait, the Gulf States retaliate. That’s the scenario that could spiral into a prolonged Sunni-Shia regional conflict — especially if the US steps back and leaves Israel provoking both sides.

Iraq is Iran’s only remaining satellite state, and even they’re staying out of this.

Off-Ramps and the Martyrdom Trap

Alex: Is there a martyrdom trap here — does sustained bombing actually strengthen the regime internally?

Mr. X: You’ll get a temporary rally-around-the-flag bump, sure. But I think an off-ramp gets offered within a month or two, and Iran takes it. They almost capitulated a year and a half ago — they knew they had basically no air defenses. The Israelis were literally flying sorties past Tehran just to troll them, and Iran couldn’t do anything about it. In public they’ll say death to America, death to Israel — that’s for domestic consumption. Behind closed doors, the Iranians will take the off-ramp that is offered. This is the first time their counter-attack actually killed US military members, they will spin this as their reason for victory and take the off-ramp.

Alex: Would Israel even accept a ceasefire without regime change?

Mr. X: Yes, I think so. They’re practical at some level, because full regime change is simply not going to happen. The IC’s probability on that is effectively zero — 0.00001%, if you want to be precise. Israel’s real goal is permanent destabilization. If Iran is consumed by internal chaos and can’t fund proxies in Lebanon, Syria, and Gaza, Israel wins on the terms that actually matter to them. Both the US — through the Swedes — and the Israelis maintain back channels with the Iranians. And Oman was actively mediating right before the bombing started. There were reportedly positive developments. Then the bombs dropped. Make of that what you will.

Alex: What does the US off-ramp actually look like?

Mr. X: If these were two fully rational actors, a deal would already exist. The most credible US pressure point might simply be telling Israel: we have nothing left to give you. We’ve been transferring Patriots and THAADs to Ukraine — our stocks were already depleted before this started. They’re now talking about pulling batteries from South Korea and Japan, which compromises those theaters considerably. At some point the US says ‘we can’t support you any further,’ and that creates the conditions for negotiations. There’s also apparently already a Trump back-channel to Tehran that Netanyahu caught wind of and tried to shut down — which tells you everything about the internal tensions in this coalition.

Missiles, Launchers, and the Drone Problem

Alex: Iranian launches have slowed. Is that a strategic decision or degradation of capability?

Mr. X: It’s the latter. We have the ability to detect a launch almost instantaneously, and those transporter erector launchers get bombed within minutes. I’ve personally seen probably fifty videos of their launchers getting taken out. You can have a thousand missiles and fifty launchers — take out the launchers and the missiles will just sit there. Israel has been bombing some of those underground storage sites continuously — the logic being if the bombs don’t kill whoever’s inside, the suffocation will. They did that when they went after Nasrallah, bombing the same bunker daily until the job was done. Ruthless, but effective.

By the numbers: Iran started with around 3,000 ballistic missiles, has fired over 1,000, faces a roughly 30% failure rate, and has lost a large share of its launchers. The math doesn’t work in their favor. And last year, Israel destroyed much of their domestic production infrastructure — the fuel mixture equipment has to be sourced overseas and takes years to procure. They can’t replenish at any meaningful rate.

Alex: What about drones? They reportedly have 20,000 of them.

Mr. X: Drones are the bigger long-term problem. Their launching platforms are more mobile and produce far smaller signatures than ballistic missiles — much harder to track and preemptively strike. And they’re genuinely difficult to intercept. Modern air defense systems are designed for fast-moving, high-altitude targets. Drones are like flying Honda Civics — slow, low, and irritating. Firing a two-million-dollar interceptor at a twenty-thousand-dollar drone is not a sustainable exchange ratio.

IRGC: Paper Tiger Abroad, Paranoid at Home

Alex: How effectively has Israel degraded the IRGC’s overseas capabilities?

Mr. X: Remarkably effective. The IRGC’s primary mission was always to export the revolution — build and sustain military structures in Syria, Lebanon, Iraq, and Gaza to encircle Israel. Since October 7th, Israel hasn’t just gone after Hamas and Palestinian Islamic Jihad. They’ve gone after everyone. The IRGC spent billions building military infrastructure in Lebanon over thirty years. It was wiped out in weeks.

That’s caused serious discontent within the Artesh, who feel that money should have been used to build actual military divisions rather than proxy militias that collapsed the moment they got bombed. And those proxies were paper tigers. Hezbollah fighters in Lebanon fled when the campaign started — they were there for the Iranian paycheck, not ideological conviction. The Iraq situation is almost comical. The paramilitary units treat their IRGC affiliation like a weekend drill. When missiles started flying, they were suddenly very busy with other things.

The command structure is in freefall. After they killed a senior Hezbollah commander, the IRGC was so short on qualified personnel that they had to pull a retired general out of retirement, but the poor guy got killed almost immediately. You can’t make this stuff up.

Hidden Capabilities and the ‘Ace Up the Sleeve’ Question

Alex: There’ve been persistent rumors — a nuke quietly provided by China, hypersonic missiles, some kind of hidden ace. Anything to any of it?

Mr. X: No. It sounds like the last days of Nazi Germany — ‘we have a secret weapon, we have V2 rockets, jet airplanes.’ They don’t have anything. And the dynamic that generates those rumors is actually instructive: the IRGC and Artesh are in constant budget competition with each other. Neither organization fully discloses its capabilities to the other because transparency could mean budget cuts. So they feed each other — and outside observers — a steady diet of exaggerated or fabricated weapons programs.

We just killed their Supreme Leader and nothing new has been deployed. That tells you everything you need to know about the state of their hidden capabilities.

The corruption compounds all of this. Commanders protect subordinates who are skimming money, because everyone is skimming money.

Revolution, Opposition, and the Shah’s Ghost

Alex: Consensus among analysts seems to be no viable opposition, revolution highly unlikely. Do you agree?

Mr. X: Completely agree. The regime has been systematically eliminating opposition figures for years. And here’s the thing — you only need about 5 to 10 percent of the population as armed loyalists to hold everyone else down. There’s no established political opposition. Every candidate for office has to be approved by the regime. Even former prime ministers who were deemed too moderate have been barred from running. There’s no infrastructure for a movement to attach to.

The Kurdish incursion from the north is essentially a sideshow. And as for rallying around the Shah’s son — look, the revolution happened because the Shah was corrupt and deeply unpopular. That was over forty years ago. Nobody credible is sitting in exile ready to step in. This government is going to remain. The most realistic outcome is a moderate, eventually rising within the existing structure.

The Domestic Threat: Iranian Sleeper Cells in the US

Alex: What’s the realistic threat of IRGC operatives or Hezbollah sleeper cells launching attacks on US soil?

Mr. X: Honestly? They’re a joke. I wish I could be more specific about how much of a joke, but their operational security is terrible — we catch most of their plots before they get anywhere. The Caracas route, where Hezbollah would fly operatives from Tehran to Venezuela, give them fake documents, and filter them into the US through the southern border — that’s been shut down. That was actually the real reason the US moved on Venezuela. Not cartel activity. Iran, Russia, and China were operating essentially unchecked in the Western Hemisphere and we put a stop to it.

They’ve been trying to kill about twenty targets on their Soleimani retaliation list since 2020. They’ve gotten nowhere. Their standard approach is to hire Pakistani criminals or German-Turkish biker gang members as cutouts. It has failed every single time. I’m not losing any sleep over Iranian sleeper cells in America.

The Strait of Hormuz: Can Iran Close It?

Alex: Can Iran actually close the Strait? And is it feasible for the US Navy to escort tankers through, or is the asymmetric swarm threat just too great for commercial insurers?

Mr. X: Iran has the capability to block it, yes. Even with a US naval concentration of force, you’d have escort convoys with five- to ten-mile gaps — and a fast speedboat can cover that gap and hit a tanker before anyone responds. No commercial operator takes that risk without government-subsidized insurance that pays out quickly, and even then you’re still losing the ship. The Iranian coastline is much longer than the strait itself; attacks can come from multiple vectors simultaneously. The market would price that risk accurately, and the answer would be: not worth it.

Iranian Financial Networks: Vast, Leaky, and Hard to Kill

Alex: If the US moves to freeze Iranian financial nodes, do they have a crypto or Beijing-backed workaround?

Mr. X: Their financial network is vast but extraordinarily disaggregated and inefficient. The IRGC doesn’t sell oil on the open market — they have shadow networks of operators who go directly to countries like Venezuela, India, and China: ‘Want to buy some oil?’ There’s no central node to take out. You can’t just sanction their central bank and cripple the whole system.

They’ve dealt in untraceable crypto — Monero and Dash — but mostly for stashing personal wealth, not funding operations. The old Lebanon pipeline, where couriers would fly in carrying bags of cash and hand them off airport-side without so much as a receipt, has been shut down. The inefficiency is staggering — couriers go missing with millions of dollars a couple of times a year. Sometimes they find them. Sometimes they don’t.

The two things worth watching: whether the UAE starts freezing Iranian assets held there, and whether Qatar gets fully flipped. Qatar is genuinely bizarre — they fund everybody. The US, the Taliban, al-Qaeda, ISIS, Iran — they just want to be friends with everyone and make sure the Saudis don’t get too powerful. If Iran’s miscalculation convinces Qatar to pick a side, that would meaningfully cut into Iran’s financial networks.

Why Is the US Really Here?

Alex: The administration’s stated reasons — payback for IEDs from a decade ago, nuclear threat reduction — doesn’t hold together. So what’s the actual US strategic goal here, if there is one?

Mr. X: Honestly, I don’t think the US had a coherent strategic goal. We got dragged in. The DoD’s operational vision is narrow: remove Iran’s ability to project naval force, ballistic missiles, or any meaningful threat beyond its own borders. They can probably accomplish that in two to three weeks — except on the drone side. China losing access to Iranian oil is a secondary benefit that the administration may now be leaning into, but it wasn’t the motivation.

Trump got suckered. He was sold a narrative that this would be a quick operation — a Venezuela-style decisive win, four or five days, Iran comes to the table from a position of weakness. That story hasn’t held up. And it doesn’t make sense on its face. We’re burning through stockpiles we need for other theaters. He ran on being anti-war. It’s not popular with the MAGA base. The IED rationale is dredging up grievances from ten years ago. The only explanation that actually coheres is: Israel called in a favor, and we said yes.

Alex: That’s a strange amount of influence for a foreign government to have over us.

Mr. X: It’s not just this administration. It spans at least the last forty-plus years. Ever since the one president who publicly questioned whether Israel should have nuclear weapons was assassinated, then 200 pounds of plutonium goes missing from a facility in Pennsylvania. Everyone else has fallen in line afterwards. Not trying to be conspiratorial; however, it puzzles the entire Intelligence Community as to why we support Israel so much.

Alex: I did not know that about plutonium.

Mr. X: Most people don’t. It’s not something people talk about. But it’s there if you look.

Base Case: The Next 3 to 12 Months

Alex: Walk us through your base case — and your worst case with a rough probability.

Mr. X: Base case: the US and Israel spend roughly the next month systematically destroying Iran’s military infrastructure, nuclear development capacity, and ballistic missile production and launch capability. We’re already using B-1s and B-52s — slow movers, but we can afford to use them because Iran’s air defense apparatus has been largely neutralized. No need for F-22s or F-35s anymore. We’re launching F-15s, older planes, older bombs. But from a B-52 you can drop dozens of bombs on targets in a single pass. Volume matters.

Once that phase is substantially complete, back-channel negotiations open up in earnest. The offer to Iran is binary: continued escalation on economic targets, or a negotiated exit. Iran takes the exit. They’re already running low on launch capability and resorting to hitting closer Gulf targets because they can’t meaningfully reach Israel anymore. They’ll come to the conclusion that they can’t sustain this indefinitely.

The endgame is a new, more moderate Supreme Leader — someone who publicly maintains anti-US rhetoric for domestic consumption but privately accepts the new constraints: no funding proxy groups in Syria, Lebanon, or Gaza. Iraq and Yemen groups’ funding would be tolerated at minimal levels. Any proxy attack on Israel triggers direct accountability against Tehran. That red line was established after October 7th and it holds.

It’s worth noting the historical context. Before October 7th, Netanyahu’s government actually tolerated limited Hezbollah activity — rockets and drones within a few miles of Israel’s northern border. There was a tacit gentleman’s agreement. October 7th ended all of that permanently. The Lebanese government has since told Hezbollah to disarm. The parameters of this new order are much tighter.

Alex: Worst case?

Mr. X: I’d put it at around 20 percent. The scenario is that a faction within the IRGC goes rogue — their top commanders have been killed, their ability to meaningfully strike Israel is near zero, and they’re angry. They decide to concentrate all remaining capabilities on Gulf State targets, particularly the US Fifth Fleet in Bahrain, in defiance of political leadership in Tehran. Pure revenge.

If that happens, the Gulf States respond. You get a prolonged regional conflict that shuts down the Strait of Hormuz and sends energy markets into genuine chaos. The Gulf States don’t want that war — that’s what keeps this probability below 20%. But if the IRGC keeps provoking them, the Gulf States may not have a choice.
En

End of excerpt…

The conversation above is a small taste of the sourcing and analysis that drives our positioning. The full version — and everything else informing how we’re thinking and trading right now — lives inside the Collective.

Enrollment is open this week.

[Get your seat here.]

Stay frosty and keep your head on a swivel.

Your Macro Operator,

Alex

Mr. X is a former US intelligence officer with extensive operational experience in the Middle East. He spoke on background. This transcript has been condensed and edited for clarity.

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​​​​​​​MO Portfolio & Trades ​​​​​​​

1. The MO portfolio gained +40bps on the week — though that number flatters the experience. We climbed to +41.6% on Tuesday, gave back to +36.3% by Thursday, and settled back at +40% YTD. Plenty of vol in between.

We cut the entire equity book last week. Waiting for clarity, starting fresh. Current positions: long oil futures and calls, long BBG commodity index, long KC HRW Wheat, short T-Bonds, short NQ futures.​​​​​​​

2. Last week we highlighted two Treasury trades — a bullish breakout in the front end and a short setup in the long end. The 2s were a bull trap; we stopped out. Still tracking it closely though, as it remains in a major compression regime. The short in the long end has played out well. It’s short-term oversold and sitting at its lower daily band. We’ll assess on Monday whether to take partials or let it run.​​​​​​

3. Our Lead Technical Analyst Mike Gyulai published a sharp note over the weekend covering the evolution of our long oil trade, among other things worth your time. [Read it here.] We’ve taken partials and continue to trail stops — but we’re still long futures and calls. ​​​​​​​

​​​​​​​4. WTI is in extreme backwardation. Historically, that’s a signature you see at or near oil tops and it tends to bode poorly for forward returns. That said, we’re operating in an unusual, event-driven environment — basic historical comparisons need a helping of salt here (chart via @jaykaeppel).

We’ll be watching to see whether long-dated futures catch up to the front end (bullish) or if the front end catches down (bearish). ​​​​​​​

​​​​​​​Trifecta Charts

5. Some notable action in our core models last week, working counterclockwise from the top left:
​​​​​​​

Aggregate Market Internals saw a big jump WoW — still at a weak level though, but worth watching. Trend Fragility (our sentiment/positioning composite) dropped to 51% — a buy signal triggers on a cross below 20%. Our Trifecta Lens Score fell to -2, a level that historically precedes chop and downside vol in the indices. And our Liquidity Gauge collapsed to 39%, a level that historically points to poor forward 1-3 month returns.

6. Last week, I shared the double-channel chart on ES-mini, suggesting a likely breakdown from its 2-month sideways range and a selloff toward November lows before a proper washout bottom. Mike G echoed this with NQ — a break below recent congestion gives it a measured-move target of -9%, or roughly 2,200. ​​​​​​​

7. Our base case is not a cyclical top. The primary trend models remain supportive. That said, I think a larger extended sideways range — 6 months or more, volatile — is a real possibility. Either way, we’ll be tracking the Capitulation tab in our HUD to help identify a bottom. ​​​​​​​

​​​​​​​Macro ​​​​​​​

8. PTJ once said every recession since 1970 has been preceded by a 100% YoY rise in the price of oil. Sans COVID, he’s right. Our Energy & Credit Shock Indicator illustrates this cleanly. We’re fine right now — but this thing can move fast. ​​​​​​​

9. LB Macro put out a great post this week on AI’s economic impact so far. Their take: AI isn’t destroying the labor market — at least not yet. What it’s actually doing is something subtler and probably more consequential: reshaping it faster than any prior technology wave. Entry-level cognitive jobs are getting hit. The composition of employment is shifting at a pace that dwarfs previous tech cycles. The destruction is contained for now, but the reallocation is very much underway.​​​​​​​

10. I mostly agree — for now. But we have to maintain real cognitive flexibility here. This isn’t a normal environment, and AI is not your average technological revolution. Charts like the one from JPM below need to be watched and respected. Don’t get complacent. ​​​​​​​

11. Research has shown it’s not the level of inflation that hurts risk assets — it’s the volatility of inflation. This chart from Nomura is a useful reminder: when inflation runs hot, it also tends to run wild. ​​​​​​​

​​​​​​​Trade Setups / Topical Charts

12. We’re in a cyclical commodity bull, and it’s following the standard playbook to a T: Precious Metals → Industrial Metals → Energy → Agriculture. We’re long Kansas City Hard Wheat, missed an entry on corn last week, and are now tracking a setup in Sugar.
​​​​​​​
Speculator short positioning recently hit its most bearish reading on record. Our sentiment indicators are sitting at the 0th percentile. Relative valuation is nailed to the floor. ​​​​​​​

13. I’ve been patient with Sugar — watching the one-sided positioning, waiting for a technical setup and some news failures to confirm. Now we have both.

The October chart shows a double bottom on both weekly and daily timeframes. We’ve had a series of bearish news failures over the past week. And Sugar is heavily influenced by ethanol prices, which jumped last week. We’re looking to get long this week.​​​​​​​

14. On the equity side, Adecoagro (AGRO) surfaced as an interesting way to play this. They operate primarily in Argentina and Brazil — low-cost producer of sugar and ethanol, with significant corn and soybean exposure. Highly sensitive to the No. 11 sugar contract. The stock has traded in an $8 sideways channel for its entire life as a public company. It jumped last week. No trade yet — but I’d be interested on a clean breakout above $11.50. ​​​​​​​

​​​​​​​One more thing before you go.

The Collective is where we do the real work — live portfolio, full model access, the HUD, Mike G’s technical notes, Brandon’s deep value dives, my macro takes, a dashboard of our proprietary tools, and a community of serious investors and traders who are actually devoted to getting better. It’s not cheap, and it’s about to get less cheap. We’re raising prices to keep the community at a size where everyone gets real value out of it. If this resonates with you, now’s the time.​​​​​​​ Enrollment Is Open This Week.

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​​​​​​​Thanks for reading.

Your Macro Operator,

​​​​​​​Alex

Markets can move for many reasons. Irrational exuberance. Leverage unwinds. A new technology capturing the zeitgeist. A major player missing expectations.

This week, markets moved on violence.

When big moves occur, especially those that force positions past their risk points, I walk away from the screen and widen my aperture. I found myself on the living room floor beside my six-week-old daughter, kicking on her playmat.

One day, she will ask me how human beings can kill other human beings.

This only intensified my unrest.

My body demands I do something. That I act. Ten years ago, action would have been my strategy. Today, I know better. I must clear what’s surging through me—adrenaline preparing my body to fight a non-physical threat.

Half an hour of lap swim. Three rounds of contrast therapy. The chemicals inside have burned away. I now see what fueled them.

The lack of agency over the violence. Mourning the loss of innocent life. The senselessness. My privilege to be so far removed. The guilt woven through that privilege.

A part of me that is not these emotions, but stands before them, acknowledges each. I do not whisk them away. I sit with the lack of resolution. To seek resolution would label these concerns as “problems to be solved,” driving them back underground, still charged—primed to fuel a resurgence of physical survival instinct.

Instead, I stand momentarily with each, and I commune: at times, we lack agency. At times, the world is senseless. In certain contexts, we are privileged and don’t know why.

I hold this posture, regulating their unrest. Knowing that each time I do, I expand my capacity to hold greater uncertainty, senselessness, and contradictory truths.

Knowing she will one day bring these questions to me for the first time. Knowing that when she does, I will need to hold what cannot be answered for us both.

An Equity Cleanse

Our Macro Ops team was in an internal meeting last week discussing our new-member experience. We wanted to streamline the process for following our model portfolio. There had been a lot of action in our book through the first nine weeks of 2026.

Our Lead Value Investor, Brandon, commented: “When our book gets this active, it usually means we’re starting to top.”

At the moment, it seemed like an offhand mention. But I suspect his subconscious had already pattern matched the present environment to his past market experience. And that subconscious knowing was starting to brim at the surface.

This week, we made the decision to completely flatten the equity side of our book.

Here’s what MO Team Lead, Alex, shared in the Comm Center:

“The market right now is a bad table. Too many unknowns, too much headline risk, too many players making moves that have nothing to do with the cards in front of them. In poker, one of the most underrated edges isn’t your ability to bluff or read tells—it’s knowing which table to sit at, and when to pick up your chips and walk. The best players in the world routinely leave good tables because they’ve spotted a better one elsewhere. The second-best move they make is leaving a bad table altogether. This is one of those times.”

The cash raised will act as fresh powder when conditions clear.

While Brandon and Alex have a deep felt sense for market conditions and historical analogues, I lean on technical tools to understand current conditions. Perhaps it is no coincidence that on Friday, the primary trend filter for my breakout system flashed risk off.

Some of these signals end up short lived. At any moment, a peace deal struck could snap the risk appetite right back. But so long as this condition persists, long equity breakouts — viewed through my lens, on my time horizons, with my trade management — have proven negative EV.

From a technical analysis standpoint, two charts have my eye with regard to the next leg.

The NASDAQ 100 has formed a four-month range between 26,260 and 24,000.

The higher low at the start of February, paired with price action contained above the 200EMA, gives the formation a bullish bias as an Ascending Triangle. However, such formations can morph, with price breaking down the lower trendline.

And a smaller consolidation between roughly 25,430 and 24,430 has formed within the larger one.

This smaller consolidation stands right at the convergence of the Ascending Triangle’s lower trendline and the 200EMA, which would warrant any breakdown meaningful.

The smaller consolidation, which could be considered a Launching Pattern, is even clearer on the 4H.

Should the smaller consolidation complete to the upside, I’d expect another test of the highs at 26,260, and renewed conviction in the Ascending Triangle interpretation.

Should it complete to the downside? A measured move target would land at roughly 22,200.

The Nasdaq-100 Equal Weight looks even more dire. It has arguably already broken down its lower boundary and lost the 200EMA.

The smaller consolidation here looks more like an underside retest of the breakdown. A measured move target stands at 123.50.

A Real Gusher

While we’ve purged our book of equities, we’re happy holding our oil longs, T-Bond shorts, and a handful of uncorrelated futures positions.

Our oil long in particular has been a wonder to watch. I can say that because our Head Macro Operator, Alex, has played this one just beautifully and I, along with members of our Collective, have watched him do it in real time.

Rewinding to this past December, crude had been in a multi-year downtrend since peaking in 2022. What began to form on the chart in December—well before this month’s escalation overseas—was a potential double bottom around the 55 level.

That chart was precisely what Alex shared in the Comm Center on December 17, 2025, as the Macro Ops Portfolio entered a buy stop at 56.95 for an initial position.

I combed through the subsequent trade alerts to piece together how things played out from then through this week.

Expertly played.

The Pauses That Refresh

While long equity breakouts may temporarily be off the table, there are a number of opportunities to play on the short side, or between range boundaries this week.

Here are the names that grabbed 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.

​​​​​​​MO Portfolio & Trades ​​​​​​​

1. The MO portfolio gained +90bps last week, helped by our silver and miners longs. It’s now up +39.58% ytd. We’ll see where things open Monday, but I’d expect our long oil calls to be up nicely.
​​​​​​​
If you’d like to join our Collective and have access to our research, tools, Slack, and the team and me, just click here. ​​​​​​​

2. We’ve been stalking this multiple-compression setup in 2-yr T-Notes for months, and it looks like we’ve finally gotten a breakout. We’re already quite long, but we’ll look to add as long as this move holds and the tape stays firm. ​​​​​​​

​​​​​​​3. Last week I reiterated the Trifecta (macro + positioning + technicals) setup in crude, along with the likely positive catalyst of an attack on Iran (link here). We’re heavily long the futures and equities and think this trade has legs. Short-term positioning is shifting fast (26-week oscillator below), but it’s coming off a historically pessimistic base. Seasonality is very favorable, and crude’s relative valuation sits at the 0th %tile.

​​​​​​​Trifecta Charts

4. Our Aggregate Market Internals indicator is in nosedive mode. Not quite at official sell signal levels yet, but it could trip there this week — worth watching closely. ​​​​​​​

5. We still don’t see broad weakness in aggregate breadth, so we can’t turn outright bearish. The full Trifecta picture continues to suggest more chop and vol in the main indices, with risk skewed to the downside. SPX likely retests its Nov ‘25 lows — but this will probably be a grinding move rather than a cascade, as rotation flows and flush liquidity keep other pockets of the market bid. ​​​​​​​

6. Our Trend Fragility indicator has come down to the 68th %tile. BofA’s Bull-Bear climbed last week to a recent high of 9.2 — still well into Sell Signal territory. I expect a full reset in both over the next month or two. ​​​​​​​

​​​​​​​Macro ​​​​​​​

7. AI’s impact on labor, software, credit, and a host of other things continues to be a key market driver. I’m tracking the debate closely. Here’s @WarrenPies’ recent take:
“AI’s impact on the labor market is no longer theoretical. In the most AI-exposed industries, job losses are accelerating — especially relative to pre-AI trend growth. AI-resistant industries continue to add jobs. As the year progresses, expect that wedge to grow.”​​​​​​

8. On these debates, I try to keep an open mind — find the most cogent and honest thinkers on both sides, then track their arguments against the data and what the market is actually saying, while always keeping a pulse on where the Narrative Pendulum sits. Here’s Citadel Securities with a good counter:
​​​​​​​
“It seems more likely that AI will be a complement rather than a substitute for labor in many areas. Historically, technological revolutions have altered task composition rather than eliminated labor as an input. To produce a negative demand shock large enough to overwhelm output expansion, one must assume near-total automation of economically relevant labor combined with extremely weak redistributive responses. To frame this debate correctly, simply ask: was Microsoft Office a complement or substitute for office workers? Ex-ante, the concern skewed toward substitution. Ex-post, it appears a clear complement.”

Here’s the link to the full piece. ​​​​​​​

9. Whichever side ends up being right will have profound implications for markets. The AI-eats-most-jobs scenario is obviously deeply deflationary. The other is potentially quite inflationary. Our models continue to point to falling inflation over the next three months or so, with a potential hockey-stick turn somewhere in the second half of the year. This chart from BBG’s Simon White seems to corroborate that — Truflation (blue) collapsing while his inflation lead (yellow) trends up. ​​​​​​​

​​​​​​​Trade Setups / Topical Charts

10. Honestly, the rally in the long end over the past month has surprised me. Last week, 10s punched through 4% for the first time since October. The AI narrative has been driving it — but in my opinion, the move looks overdone, and the long end looks expensive. Small Spec positioning in long bonds is at its highest level in history, while Commercials hold record shorts. The vertical red lines mark past instances where Commercials moved to large net short positions — it tends to be followed by a significant move lower. ​​​​​​​

11. I’m looking for a potential short here against our long on the front end. The weekly ZB chart shows price reversing off its upper weekly band and downward trendline — a technical ceiling that’s held many times over the past few years.
The long end is also in a major compression regime (pull up a monthly Bollinger Band width chart). Like the front end, this tells us a big move is coming. My bet is that move is lower.​​​​​​​

12. Check out this weekly chart of Moderna (MRNA). It broke out from a 12-month rectangle in mid-January and cleared its recent consolidation last week. Our resident systematic chartist, Mike ,G first flagged the setup on January 17th (link) — also, here’s the link to Mike’s latest. It’s definitely worth a read.

I continue to like biotech. It’s showing solid relative strength. We added JAZZ last week and will likely add MRNA in the coming days.​​​​​​​

Join The Collective ​​​​​​​

Thanks for reading.

Your Macro Operator,

​​​​​​​Alex