Trend Following - Week in Review - May 16, 2025

“In markets, some melt while others surge—the heat just moves.”

This Week In Trend

Welcome to This Week in Trend, your lens into the evolving rhythms of global futures markets and the adaptive world of trend-following.

After April’s sharp swings and early May’s rebalancing, markets this week delivered a more chaotic cadence. There was no clear path—just flashes of strength and pockets of collapse. Systems adjusted on the fly, chasing clarity through the churn.

“Softs Surge While Metals Melt”

The third week of May delivered extremes in both directions.
Softs surged with explosive momentum, led by cocoa and orange juice. Equities climbed, riding tech’s tailwinds. But metals melted, bonds reversed, and volatility collapsed.
This wasn’t just a rotation—it was a rupture. Momentum shifted violently across asset classes. Systems caught some moves, missed others, and were whipsawed in between.

SG Trend Index Performance

• MTD (as of May 15): -3.31%
• YTD: -12.32%
• (Last week MTD: -1.29% | YTD: -10.49%)

The SG Trend Index deepened its drawdown this week. Systems that showed resilience last week are now exposed, as energy, metals, and bonds lost their footing again. While softs delivered strong countertrend moves, their suddenness offered little entry for slower systems.

TTU Trend Barometer: 27% – Very Weak

• Last week: 36%
• 10-day rate-of-change: Falling Rapidly

The TTU Trend Barometer plunged to 27%, marking one of the weakest environments in recent months. Only a handful of clean trends remain, and systems across the board are feeling the crunch.

"Below 40% is cold. At 27%? It's coming close to deep freeze."

The Top Traders Unplugged (TTU) Trend Barometer is a proprietary tool that measures the percentage of markets with medium to strong trends. Similar to a thermometer, where 0 degrees Celsius equates to freezing, a TTU Trend Barometer reading below 40% indicates a “cold” environment for trend-following, while readings above 55% signal a “hotter,” more favourable trend environment.

Weekly Asset Class Snapshot

Source: Finwiz.com

This week’s standout shift came from Soft Commodities, which staged a sharp rally. Equities also pushed higher, particularly tech. Meanwhile, Metals unwound recent gains, and Bonds reversed once more. Volatility crashed further.

Asset Class Breakdown – Wild Rotation

• Energy: -0.39% (Prev: +3.04%)
  Momentum faded. Crude and Nat Gas stalled, giving back last week’s breakout.
• Metals: -1.92% (Prev: +2.22%)
  Gold and silver dropped, reversing their prior bounce.
• Equities: +3.25% (Prev: +0.45%)
  Tech leadership returned, lifting major indices.
• Soft Commodities: +4.14% (Prev: -0.98%)
  Cocoa and OJ exploded higher—offering rare strength.
• Grains: -0.22% (Prev: -1.32%)
  Losses continued, but selling pressure moderated.
• Meats: +0.33% (Prev: +0.38%)
  Still subdued. Some livestock names remain range-bound.
• Bonds: -0.69% (Prev: -0.33%)
  A reversal. Yields rose again, putting pressure on long bond trades and short-term interest rates in particular.
• Currencies: -0.33% (Prev: -0.35%)
  Further drift. No clear directional trends.
• Volatility Index: -16.39% (Prev: -2.37%)
  Volatility collapsed. The calm is becoming extreme.

Performance Highlights – This Week’s Market Leaders & Laggards

Top Market Movers

Biggest Gainers

• Cocoa: +18.94% – Massive breakout. Led the softs surge.
• Orange Juice: +9.77% – Parabola resumes. Volatility remains high.
• Nasdaq 100: +6.27% – Tech strength drove the index higher.
• Lumber / S&P 500 / Heating Oil: +5.33%, +4.76%, +3.58% – Mixed sector strength in cyclical names.

Biggest Losers

• VIX: -16.39% – Calm again. Complacency now dominant.
• Natural Gas: -12.38% – Reversal from recent strength.
• Gold: -4.15% – Precious metals unwound quickly.
• Coffee / Cotton / Corn: -5.73%, -2.21%, -1.50% – Mixed moves across softs and grains, with sharp drawdowns in coffee and modest declines elsewhere.

Portfolio View - What the Moves Meant for Systems

• Soft Commodities: Strongest performers, but their violent reversals may have caught systems flat-footed.
• Metals: Hurt portfolios after a strong prior week.
• Equities: A rare bright spot—especially for models long Nasdaq or tech indices.
• Volatility: Collapsing vols stifle trend opportunities.
• Currencies & Bonds: Continued noise and indecision make for choppy trades, with short-term interest rates proving the most difficult.

Final Reflections – A Market Without Memory

We’re back in that strange place again—where last week’s leaders become this week’s laggards, and nothing seems to stick.

The SG Trend Index fell sharply. The TTU Trend Barometer plunged to 27%, signalling a hostile environment for trend-followers. The brief sparks of strength in softs and equities came too fast for many to capitalize on.

In markets like these, systems aren’t just challenged—they’re tested. And the lesson this week? Sometimes survival means staying in the game, even when the signals are faint.

“In times like these, it’s not prediction that wins—it’s persistence.”

 

 

List of Resources used in the Week in Review

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