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Naomi

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A trading system can be simple enough to write on a billboard and still be difficult to follow.

Imagine every rule displayed beside a busy road. The entries, exits, and position sizes are all there for anyone to copy. You could copy the instructions exactly and still have unanswered questions about committing capital to the strategy.

Could the strategy trade effectively as it grew? What market behavior would allow it to earn returns over time? And when performance disappointed, how would you distinguish a difficult period from a process that needed to change?

Those questions are easy to set aside when the track record looks good. The rules seem convincing because the results are convincing. But a lasting investment process has to survive periods when that reassurance disappears, and the rulebook alone cannot supply every answer.

Where the returns can come from

A trend follower takes a position because the rules say to take it. There is no need to approve each signal against an economic forecast or a view about where a market ought to go.

An investor can understand why persistent price moves create an opportunity without needing to explain the cause of each move. Research into the system examines price behavior, trading rules, and their performance. Economic forecasts are not an input to its trading signals.

Several forces can help price movements persist. Economic trends develop over months and years. Financial carry can contribute to the return or cost of holding a position. Information spreads unevenly as participants absorb news and adjust their holdings at different speeds. Feedback can reinforce an existing move, with buying encouraging further buying or selling bringing more sellers into the market.

Think of a boat affected by a current, the tide, the wind, and its engine. Watching its direction does not tell you which force is doing most of the work. Sometimes they reinforce one another. Sometimes one is strong enough to overcome the others.

Trend following responds to the resulting price behavior. These forces help explain how trends can arise, but the system does not need to identify which force is responsible. Carry, for example, can help a position or work against it without becoming a reason to override a price signal.

The holding period is one practical illustration. A position held for months allows carry more time to accumulate than a trade held for days. That affects what a strategy may capture, but it is one design choice within a much broader process.

An investor who understands these mechanisms has more to work with than the statement that markets trend because people behave in certain ways. People also create reversals and markets that go nowhere. The investment case needs to explain both why an opportunity can exist and why it will sometimes be absent.

The exit belongs to the market too

A position that can be traded comfortably in copper may be too large to execute on similar terms in tin. Both are metals, but they offer different amounts of liquidity. The amount of risk a model wants to take does not tell you how much another participant is willing to absorb.

An exit signal is an instruction to act. It cannot guarantee that the market will let the manager leave at the expected price. As positions grow, the choice may become one of accepting a worse price, taking longer to trade, or reducing the size the strategy can carry.

Liquidity also changes. A market can be easier to trade at one time of day than another, and participants can become less willing to transact. Capacity is therefore a moving constraint rather than a permanent number attached to a fund.

Execution costs are evidence worth watching. If those costs rise persistently in a few smaller markets, the pressure may be visible there long before the portfolio's headline returns make it obvious. The cause needs investigating: too much capital in the strategy and a temporary decline in market liquidity require different responses.

This is where growth can create an awkward choice. A manager may need to diversify the approaches being used or change how positions are executed. Investors may interpret those changes as a departure from what they bought. Explaining how the edge will be preserved takes time, especially if assets have grown faster than the dialogue with clients.

The amount a manager can raise and the amount a strategy can deploy effectively are separate questions. The second needs an answer in actual trading costs, not just an impressive track record at a smaller size.

Price does not need an economic explanation

The same economic news can produce very different market reactions. A strong employment report might lift prices on one occasion and unsettle investors on another. A trend follower does not need to resolve that contradiction before acting.

Money supply figures once commanded front-page attention in financial newspapers. The figures remained available when later generations of traders gave them less weight. What mattered to participants had changed.

Someone forecasting the market's reaction needs a view on the news and on how others will interpret it. Trend following can operate without either judgment. Its signals come from price.

If prices rise while the economic news appears to argue for a fall, the trend follower follows the price signals. There is no need to decide whether the move is justified or whether investors have misunderstood the news. Positions are aligned with the direction indicated by the system's rules.

That is a strength of the approach. Changes in what drives other participants do not have to be explained before the system can respond. Research into a price-based trend-following system studies price behavior and how the trading rules perform. It does not require a model of how markets should react to economic releases.

Price signals can still lead to losses. Markets reverse, and trends fail to persist. Following price removes the need to get the economic explanation right; it does not remove uncertainty about what prices will do next.

The discipline is to act on the signals even when the position is difficult to reconcile with the prevailing story. A convincing explanation of why a market should fall is no substitute for the price signal the rules require.

Conviction has to survive contact with the results

Return to the billboard. You know what the system does. The harder test arrives when it keeps producing instructions you find uncomfortable.

A trader can prepare by explaining four parts of the approach: the setup that defines an opportunity, the signal for entering and exiting, the position size in relation to risk and expected opportunity, and the symmetry between potential gains and losses. Each involves a choice about how to pursue the edge and how much uncertainty to accept.

The explanations have to make sense to the person who will follow the rules and to the investor who will live with the outcome. Otherwise, confidence can become little more than a response to recent performance.

A losing period then invites a change of plan. A competing strategy starts to look more attractive. The investor waits until it has performed well enough to feel convincing, reallocates, and begins the same test again. The return earned by the investor can fall well behind the return of a strategy they repeatedly enter and leave.

The answer cannot be an instruction to hold regardless. Execution costs may have risen. A return source may have weakened. The process may have changed in a way that no longer serves the portfolio. Each deserves attention even when questioning a successful manager feels awkward.

A losing period does not, by itself, mean the strategy has stopped working. Trend followers can suffer losses when markets repeatedly change direction. Investors should understand that possibility before committing capital. When losses arrive, they can then ask a more useful question: are these losses consistent with how the strategy works, or is something different happening, such as the manager departing from the rules or trading costs rising beyond what was anticipated?

A manager who can describe only why a strategy should succeed has left the investor poorly prepared. The explanation also needs to cover how it can disappoint, what the response would be, and what would justify changing the process.

Before the next difficult period, try writing down what would make you reconsider the allocation. If the answer is simply that performance might be poor, it leaves you little basis for judgment. If you can identify which assumptions, trading conditions, or features of the process would need to change, you have something to investigate when losses arrive. You can then make a decision about the process rather than start searching for an explanation while your confidence is already under pressure.

DISCLAIMER: This article is based on a conversation from Top Traders Unplugged and reflects themes, ideas, and perspectives discussed during the episode. The views expressed are those of the guest and participants in the conversation and should not be interpreted as investment advice or as the official views of Top Traders Unplugged.

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“Crude Reversed, the Index Fell. Trend Strength Rose to 39%.”

This Week in Trend – 6 November 2026

Welcome to This Week in Trend, our weekly examination of the evolving structure of global futures markets and what that structure means for systematic trend followers. This edition covers market conditions through the US close on Friday, 6 November 2026. Market returns, the SG Trend Index and the TTU Trend Barometer reading are all as at that close.

Market breadth widened slightly, yet trend-following returns fell sharply. Seventeen of 49 futures contracts finished higher, up from 14, the TTU Trend Barometer rose from 36% to 39%, recovering 3 of the 5 points it lost last week but remaining 1 point below the 40% line, and the SG Trend Index fell from +14.92% to +9.74% year to date, its largest weekly decline of the five-week sequence. The week’s defining move came in Energy. Crude Oil Brent, Crude Oil WTI and Gasoline RBOB recorded the three largest declines on the board, each giving back a large part of the advance that had carried it toward the top of its range. Across the board, the largest moves ran mostly against the structures beneath them: of the eleven moves of 5.52% or more, eight ran against, two ran with, and the VIX, up 16.38%, broke above its range. More markets were trending, while the moves that mattered most to established positions ran the other way.

Last week’s report closed by asking whether the Barometer could hold at 36%, the low of its five-week sequence, or would extend toward its late July low of 30%, and whether the 10-day rate of change would turn up. It did more than hold, rising 3 points to 39%, though the 10-day rate of change still reads Falling Weakly. Five other questions were left open. Would Gold’s break below its July low near 4,000 extend, or would the level be reclaimed? Would Soybean Meal hold near the level from which its September climb began? Would the bounce in Bonds become a higher high? Would the pullbacks in the US equity indices deepen after their sharp falls in the final session? And where would November open for the SG Trend Index? Gold reclaimed the level, rising to near 4,080, and Silver, Platinum and Palladium rebounded with it. Soybean Meal slipped to near 319, still above the area from which its September climb began. Bonds rose for a fifth week, and none of the four charts has yet set a higher high. The US equity indices fell further, the Nasdaq 100 by 5.08%. And the SG Trend Index opened November with an estimated -4.07% for the month to date.

Trend Indicators: Barometer Rises to 39%, SG Trend Index Falls Sharply

The Top Traders Unplugged (TTU) Trend Barometer measures the percentage of markets generating medium-to-strong trends. Below 40% reads as a cold environment for trend-following, above 55% reads as a favourable one, and the band between is neutral.

TTU Trend Barometer: 39%, up from 36% last week. TTU describes overall trend strength as Moderately Weak, unchanged from last week, and the reading remains in the cold environment, 1 point below the 40% line and 16 points below the 55% threshold for a favourable environment. The 10-day rate of change reads Falling Weakly, unchanged from a week ago, so TTU’s short-term measure is still declining, though not steeply. The five-week sequence, from 9 October to 6 November, now stands at 50, 36, 41, 36 and 39. The reading is 9 points above the late July low of 30% and 11 points below the 50% at which the sequence begins, and it has recovered 3 of the 5 points it lost last week, finishing 2 points below its 23 October level. The higher reading indicates that more markets met the Barometer’s medium-to-strong trend criteria. It does not, by itself, establish how trend-following portfolios performed or whether those trends were profitable to follow.

Set against the performance table, breadth and the reading rose together, while the moves themselves grew much larger. Seventeen of 49 contracts rose, up from 14, and seven of the ten categories in the snapshot fell for a third consecutive week. The average absolute weekly move increased from 2.54% to 3.71%, and the spread between the largest gain and the largest loss widened from 14.03 to 29.70 percentage points, with the VIX at one end and Crude Oil Brent at the other. The board was far busier, and the busiest part of it was Energy. Wider participation alongside a reading below the 40% line still separates two counts that are easy to conflate: how many markets rose, and how many are trending. The Barometer measures the second, and a market trending lower is part of that count as much as one trending higher.

Because the reading counts trends rather than weighing weekly price changes, a week of larger moves does not necessarily lift it, and this week the measured proportion of trending markets rose even though most of the largest moves ran against established structures. The largest moves on the board illustrate the mix without explaining the reading. Orange Juice and Soybean Oil tied for tenth at 5.52%, so eleven moves make up the group. Two ran with the structures beneath them, down from eight of the ten largest a week ago: Lean Hogs extended its decline to another low, and Soybean Oil fell further below its summer peak. Eight ran against. Brent, WTI and Heating Oil fell sharply from the upper parts of their advances, Gasoline RBOB fell below the range it had held since the spring, the Nikkei 225 fell below its summer range, Sugar pulled back from its high for a third week, and Platinum and Orange Juice rebounded inside their declines. The VIX, the largest move on the board, rose above the range it had held since the spring. Elsewhere on the board, slower declines persisted in Corn, Wheat, EUR, NZD and both cattle contracts. They are examples of established structures that held this week, not identified contributors to the change in the reading, which cannot be traced without the Barometer’s underlying classifications.

The sector data is consistent with a trend environment that warmed slightly even as the week’s largest moves cut across established structures. Running with their structures, Lean Hogs set another low, Lumber fell below 500 to the lowest level on its chart, EUR and NZD moved to new lows, Corn fell for a sixth week and Wheat for a tenth, Soybean Oil broke lower inside its decline, Coffee fell further inside the decline from its July spike, and both cattle contracts extended the declines from their spring highs. Rough Rice set another high. Running against them, the crude contracts, Gasoline RBOB and Heating Oil gave back large parts of their advances, the precious metals rebounded from last week’s lows, AUD fell back below 0.70, Copper fell further from close to its high, Sugar, Canola and Oats fell further from theirs, and the Japanese and US equity indices extended their pullbacks. All four Bonds maturities rose for a fifth week inside their declines. At 39%, the reading sits alongside a board on which established declines extended across Grains, Currencies, Meats and Soft Commodities while the advances in Energy and the equity indices came under heavy pressure.

SG Trend Index: -4.07% month to date for November and +9.74% year to date as of 6 November, on SG’s estimated figure. The year-to-date figure has fallen from +14.92% to +9.74%, a decline of 5.18 percentage points and by a wide margin the largest weekly change in the five-week sequence. Set against the Barometer, the index fell while the reading rose, the reverse of last week. Over the last five weeks the Barometer has fallen 2, fallen 14, risen 5, fallen 5 and risen 3, while the index has added 0.42 percentage points, given back 1.17, given back 0.66, added 0.61 and given back 5.18. This is the fourth time in five weeks that the two have moved in opposite directions. The Barometer counts trending markets, while the index records what institutional trend-following portfolios earned, and a rise in the first need not show up in the same week’s returns. The index’s fall is consistent with an environment in which large reversals in Energy, the precious metals and the equity indices ran against the structures trend-following portfolios would typically have been following, even as slower declines persisted elsewhere. Without the index’s underlying positions and return contributions, the precise sources of its decline cannot be established. Across those five weekly changes, measured from the 2 October close of +15.72%, the index has given back 5.98 percentage points, over the same span in which the Barometer moved from 52% to 39%.

Weekly Asset Class Snapshot

Source: Finviz.com.
Sector averages are simple equal-weighted means of the constituent contracts in each sector.

Equity Indices (-2.52% | prev +0.21%)

Equity Indices fell 2.52% with one of seven contracts higher, reversing last week’s narrow gain and finishing as the third weakest sector on the board. Euro Stoxx 50 rose 0.55%, while the DAX fell 0.15%, the DJIA 1.03%, the Russell 2000 2.16%, the S&P 500 2.78%, the Nasdaq 100 5.08% and the Nikkei 225 6.98%, the eighth largest move on the board. Last week Europe led a recovery while the US large-cap indices fell. This week the pullbacks spread and deepened, with Japan and US technology leading. The Nikkei 225 near 58,370 fell below the summer range in which it had held, to its lowest level since the spring, and the Nasdaq 100 near 27,110 fell further from its high near 31,500, back to levels last seen in the late spring. The S&P 500 near 7,405 fell below the range it had held since July, and the DJIA near 51,390 eased further below its August high near 54,000. The Russell 2000 near 2,760 slipped back toward the lower part of its pullback from the summer high near 3,100. Euro Stoxx 50 near 6,150 held close to the June levels to which its pullback had run, and the DAX near 25,790 finished little changed after trading up toward its August high during the week. The advances that have run since the spring are still visible on all seven charts, but the pullbacks from the highs have now spread from Europe to Japan and the US large caps.

Energy (-6.83% | prev -1.33%)

Energy fell 6.83% with two of six contracts higher, a third weekly decline and by far the largest of the three, making it the weakest sector on the board. Natural Gas rose 3.45% and Ethanol 1.07%, while Heating Oil fell 7.37%, Gasoline RBOB 12.03%, Crude Oil WTI 12.76% and Crude Oil Brent 13.32%, the largest decline on the board. Without Natural Gas and Ethanol, the four petroleum contracts averaged a decline of 11.37%. WTI near 90.3 gave back the four-week rise that had carried it to the upper part of the range it has built since the spring, and now sits near the middle of that range. Brent near 98.0 fell from the top of its own range back below 100. Gasoline RBOB near 2.77 fell below the range it had held since the spring to the lowest level since its March breakout, and Heating Oil near 4.34 extended its pullback from the area of its high. The scale of the move, across both crude benchmarks and both refined products, points to a broad repricing rather than a contract-specific event, though the charts alone do not show the cause. Natural Gas near 3.00 lifted within the base it has held since the summer, a move against the decline that has run since February. Ethanol finished with a small gain close to the highest levels on its chart. Last week the crude advances paused. This week they reversed sharply, and five of the six moves ran against the structures beneath them.

Metals (+3.23% | prev -5.19%)

Metals gained 3.23% with four of five contracts higher, the strongest sector on the board after the VIX and its first weekly gain in four weeks. Platinum rose 7.03%, the second largest gain on the board, Silver 5.41%, Gold 4.51% and Palladium 2.98%, while Copper fell 3.77%. Last week Gold broke below its July low near 4,000. This week it reclaimed the level. Gold near 4,080 recovered last week’s loss and more, Silver near 51.97 moved back above 50, Platinum near 1,537 rose back toward its summer low, and Palladium near 1,022 moved back above 1,000. Each rebound began from a fresh low, and the declines from the late winter peaks remain intact on all four charts, with no higher high. Copper near 6.26 fell for a fourth week to the lower edge of the range it has held since the summer, a larger move away from close to the highest level on its chart. For a portfolio maintaining short exposure to the prevailing declines in the precious metals, the rebounds would have been a cost after three weeks of gains, subject to position sizing and execution, and Copper’s fall would have been a further cost to one following its advance.

Soft Commodities (-1.57% | prev -3.87%)

Soft Commodities fell 1.57% with two of six contracts higher, a third weekly decline and a smaller one. Orange Juice rose 5.52% and Cotton 1.64%, while Coffee fell 2.74%, Lumber 2.91%, Cocoa 5.12% and Sugar 5.79%, the ninth largest move on the board. Orange Juice near 139 rebounded from the lowest levels on its chart, a move against the decline that has run most of the year. Cotton near 79.0 lifted below its August high. Coffee near 271 fell further inside the decline from its July spike, and Lumber near 499 fell below 500 to the lowest level on its chart, extending the decline from its summer high. Cocoa near 5,240 slipped further inside its rebound from the spring, and Sugar near 18.25 pulled back from its high for a third week, by more than in either of the previous two, though it remains well above the area from which its breakout began. Last week the falls in Coffee and Orange Juice favoured a portfolio positioned with their declines. This week Coffee and Lumber ran with their declines, while Orange Juice’s rebound and Sugar’s third pullback worked against the structures beneath them.

Grains (-2.37% | prev -3.00%)

Grains fell 2.37% with one of eight contracts higher, a fourth weekly decline and a smaller one. Rough Rice rose 1.95%, while Corn fell 1.40%, Soybean Meal 1.66%, Wheat 2.03%, Oats 2.84%, Soybeans 3.28%, Canola 4.19% and Soybean Oil 5.52%, tied for the tenth largest move on the board. Last week Rough Rice joined the pullbacks. This week it resumed its advance, rising to near 18.29, another high on a climb that remains steep and intact. Soybean Oil near 62.3 fell to the lowest level since the spring, extending the decline from its summer peak. Corn near 442 fell for a sixth week and Wheat near 590 for a tenth, now below 600 as it continues to unwind its August spike. Canola near 744 fell further from the top of its chart, and Soybeans near 1,195 fell back below 1,200, further from its September high. Oats near 334 and Soybean Meal near 319 eased again, Soybean Meal holding above the area from which its September climb began. Four of the eight moves, Rough Rice, Soybean Oil, Corn and Wheat, ran with the structures beneath them, up from two last week. The advances in Oats and Soybean Meal have now been interrupted for four weeks, Canola’s pullback has deepened, and Soybean Meal remains at the point at which a pullback becomes a test of the advance itself.

Meats (-5.42% | prev -6.18%)

Meats fell 5.42% with all three contracts lower for a second week, the second weakest sector on the board. Live Cattle fell 3.12%, Feeder Cattle 4.04% and Lean Hogs 9.09%, the fifth largest move on the board. Feeder Cattle near 319 and Live Cattle near 214 fell further from the upper parts of their bounces, and the declines that have run from their spring highs remain intact, with no higher high on either chart. Lean Hogs near 53.4 moved to another low, extending the decline from its spring high for a fifth week. For a portfolio carrying short exposure in the sector, all three contracts would have contributed positively for a second week, subject to position sizing and execution. Meats was the only sector in which every contract ran with its structure in both of the last two weeks.

Bonds (+0.40% | prev +0.35%)

Bonds gained 0.40% with all four contracts higher, a fifth weekly gain and a slightly larger one. The 30 Year Bond rose 0.75%, the 10 Year Note 0.44%, the 5 Year Note 0.29% and the 2 Year Note 0.11%. After a week in which the 10 Year Note led, the gains again grew with maturity. The 30 Year Bond near 108.41 and the 10 Year Note near 107.13 have recovered a larger share of their autumn falls, and the 5 Year Note near 105.21 and the 2 Year Note near 102.40 lifted further from their lows. Last week this report asked whether the bounce would become a higher high. It has not yet. The bounce has now run for five weeks, but none of the four charts has set a higher high, and the declines that have run since the winter peaks remain intact on all of them. For a portfolio carrying short exposure across the curve, the week would have been a cost at every maturity for a fifth week, slightly larger than last week’s, subject to position sizing and execution.

Currencies (-0.74% | prev -0.15%)

Currencies fell 0.74% with two of eight contracts higher, as the dollar firmed and the commodity currencies led the basket lower. The US Dollar Index rose 0.43% and CHF 0.29%, while EUR fell 0.27%, GBP 0.32%, JPY 0.76%, CAD 1.29%, NZD 1.64% and AUD 2.35%. The Dollar Index near 102.18 held close to the highest level on its chart. EUR near 1.1157 moved to another low, extending the decline that has run since the summer, and NZD near 0.5550 fell to the lowest level on its chart. AUD near 0.6860 fell back below 0.70 and below the lows of its July and August pullbacks, putting under pressure the climb from last year’s lows that had been the firmest upward structure in the basket. CAD near 0.7089 gave back most of its lift from the summer low, and JPY near 0.6327 eased further inside the decline that has run all year. GBP near 1.3352 eased within the lower part of its range, and CHF near 1.2234 lifted slightly from close to its low. Last week EUR ran with its decline while CAD and CHF lifted against theirs. This week EUR, NZD and JPY ran with their declines, the Dollar Index held near its high, and AUD’s fall cut against its advance.

Volatility, Crypto: The VIX rose 16.38% to near 23.7, the largest move on the board in either direction, rising above the range it has held since the spring to its highest level since the spring spike near 30. Market pricing reflected a week of broad risk reduction, with the crude contracts and the Japanese and US equity indices falling sharply while the precious metals and Bonds rose, though the weekly data does not establish the cause. Bitcoin fell 1.23% to near 75,900, a fifth weekly decline and a smaller one. The rebound from the summer lows near 60,000 has continued to fade below 80,000, and the decline from above 120,000 remains the dominant feature of its chart.

Top Movers

Source: Finviz.com.
Top five up and top five down by single-week percentage move.

The two halves of the table are uneven for a third week, and the declines are again the larger half, this time concentrated in a single sector. The five largest gains range from 16.38% to 4.51%, and the five largest declines from 13.32% to 7.37%. Without the VIX, the largest gain would be 7.03%, smaller than any of the five declines. The gainers come from three sectors. Platinum, Silver and Gold rebounded inside their declines, Orange Juice rebounded from the lows of its own, and the VIX broke above its range. The losers come from two. Brent, WTI, Gasoline RBOB and Heating Oil gave back large parts of their advances, and Lean Hogs extended its decline. Of the ten entries, only Lean Hogs ran with the structure beneath it. The largest moves came overwhelmingly from reversals. That is consistent with the fall in the SG Trend Index, though a sample of ten moves cannot establish the Barometer’s precise reading or account for its 3-point rise.

Portfolio View

For a portfolio positioned with the prevailing trends, the week turned on reversals. The sharp falls in the crude contracts, Gasoline RBOB and Heating Oil, the rebounds in the precious metals, and the deepening pullbacks in the Nikkei 225 and the US equity indices would all have worked against positions following the structures beneath them. The Barometer rose to 39%, 1 point below the 40% line, and the SG Trend Index gave back 5.18 percentage points to +9.74% year to date. On the side of the prevailing trends, Lean Hogs, Lumber, EUR and NZD set new lows, both cattle contracts, Corn, Wheat, Soybean Oil and Coffee fell further inside their declines, and Rough Rice set another high. The rises in Bonds, Orange Juice and Natural Gas would have worked against positions following their declines, as would the falls in AUD, Copper, Sugar, Canola and Oats for positions following their advances. The net result would have depended on each portfolio’s positions, sizing and execution, which a week of prices does not reveal. The week was directional in Energy and in volatility, but the largest moves ran against established advances in crude and equities and against established declines in the precious metals, while the slower declines in Grains, Currencies and Meats continued.

Final Reflections

After a week in which breadth and trend strength fell together, this week they rose together, and the return figure went sharply the other way. Two of the three measures this report tracks rose and the third fell. The split is less contradictory than it looks, because each of the three measures something the others do not.

The week’s lesson sits in the gap between how many markets were trending and which way the largest moves ran. The Barometer counts trends; it does not weigh them, and it does not distinguish a week of steady persistence from one in which a few large, established moves reverse. A higher count can therefore coincide with lower returns when the moves that matter most to a portfolio’s existing exposure run against it.

1. More markets rose, and more were trending. Breadth and trend strength rose together, while the size of the moves increased sharply.

The five-week sequence now reads 50, 36, 41, 36 and 39. The reading sits 1 point below the 40% line, 2 points short of its 23 October level, while its 10-day rate of change still reads Falling Weakly, so the weekly recovery has not yet changed the short-term direction of the measure.

2. The return figure fell sharply while the Barometer rose. The index’s decline is consistent with large reversals running against established trends even as more markets met the trend criteria.

For a trend-following portfolio, persistent movement in the direction of its positions creates opportunities for gains, while reversals can impose losses, and the eventual contribution depends on exposure, position sizing and execution. Only two of the eleven largest moves this week ran with the structures beneath them, so the week offered far less persistence where it mattered most than a rising reading might suggest. Without the index’s underlying positions and return contributions, the precise sources of its decline cannot be established.

This week was a reminder that the direction of a move and its value to a trend follower are separate measurements. Crude Oil Brent fell 13.32%, a move that would have worked against a position following its advance, while Lean Hogs fell 9.09%, a move that would have benefited a position aligned with its decline. Platinum rose 7.03% and would have worked against a position carrying short exposure in its decline, while Rough Rice rose 1.95% and would have benefited a position aligned with its advance. Rising markets are not good markets for a portfolio positioned against them, and falling markets are not bad ones for a portfolio positioned to fall with them. What matters each week is whether a market moved with the structure a portfolio was following.

The week ahead is therefore about whether the Barometer can recover the single point that separates 39% from the 40% line or slips back toward 36%, and whether the 10-day rate of change, still Falling Weakly, turns up. Energy is the sector to follow: WTI and Brent have given back much of their autumn advances, and whether the declines extend toward the lower parts of their ranges or the advances resume will shape the sector. In Metals, Gold has reclaimed its July low near 4,000, and whether the rebound becomes a higher high or the decline resumes matters for the whole precious metals complex. The VIX has risen above the range it has held since the spring, and the Nikkei 225 has fallen below its summer range. Bonds have bounced for five weeks without a higher high. And the SG Trend Index enters the second week of November at -4.07% for the month. In each case the question is the same one it always is: does the structure persist? For trend followers, up or down was never the central question. Persistence was. The opportunity was directional, but not directionally biased.

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In reviewing this document, it should be understood that the past performance results of any asset class, or any investment or trading program set forth herein, are not necessarily indicative of any future results that may be achieved in connection with any transaction. Any persons subscribing for an investment must be able to bear the risks involved and must meet the suitability requirements relating to such investment. Some or all alternative investment programs discussed herein may not be suitable for certain investors This document is directed only to persons having professional experience in matters relating to investments. Any investment or investment activity to which this document relates is available only to such investment professionals. Persons who do not have professional experience in matters relating to investments should not rely upon this document.

This document and its contents are proprietary information of TTU and may not be reproduced or otherwise disseminated in whole or in part without TTU’s prior written consent.

This document contains simulated or hypothetical performance results that have certain inherent limitations AND SHOULD BE VIEWED FOR ILLUSTRATIVE PURPOSES. Unlike the results shown in an actual performance record, these results do not represent actual trading. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR INVESTMENT ACCOUNT.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM OR OTHER ASSET.

There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. No representation is being made that any investment will or is likely to achieve profits or losses similar to those being shown.

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Many assets are patient. Take oil, which can wait in a tank, or a bond, which can sit untouched for thirty years, or a stock, which can be owned for decades without anyone checking the price. Electricity has no such luxury, though, since it has to be produced at the moment someone flips a switch, and the grid has to keep supply and demand in balance every second of every day, holidays included.

That one physical fact makes power prices some of the most violent in finance. A five-minute window in electricity can contain more drama than a month in crypto. That's why it's worth studying even if you'll never trade a megawatt. Strip away the jargon and power markets are a fast-forward version of problems every investor deals with on a slower clock.

Perfect Forecasts, Imperfect Grid

The strange part: almost everything about the grid is measurable. 

Weather models are public, grid operators publish mountains of data, and vendors plant sensors in farm fields next to high-voltage lines to see what individual plants are producing. Yet nobody knows with much confidence how power will flow tomorrow, because a single tripped plant or an overloaded transmission line can turn a cheap afternoon into an expensive one.

Information is cheap, but knowing which piece of it matters today is expensive.

Four Stages of Learning to Live With Fat Tails

Every once in a while, power prices explode.

Utilities, generators, and big industrial users know this, and they would rather overpay for protection most days than be caught naked on the one day it counts. That fear gets baked into prices as a standing premium. How a trader deals with that premium tends to unfold in four stages, and I think most investors pass through some version of them whether they trade electricity or not.

Stage one is seduction. The newcomer sees those spectacular spikes and wants to own every one of them, so they stay long. Day after day they pay the premium and bleed, waiting for a spike that keeps not arriving.

Stage two is the overcorrection. Fed up, the trader flips short and starts collecting the premium instead of paying it. For weeks or months, it feels like the easiest money in the world. Then one ugly day takes it all back, and usually a bit more.

Stage three is where most sensible people settle. They stay short most of the time but learn to spot the dangerous days and get out of the way. It works, as it pays the bills, and it keeps them alive.

Stage four is rare, and it's where the big money usually tends to be. The trader still collects the premium on ordinary days, but when the grid is under genuine strain they stop dodging the spike and turn around to own it, going long with size. Avoiding the tail keeps you in business; owning it is what makes the year.

When Six Days Make 85 Percent of a Year

Those big days rarely come from nowhere, since they usually follow some structural change in the grid itself, like a region moving from one operator to another or a cluster of plants shutting down, after which the old patterns stop working and prices thrash around until everyone recalibrates. One trading firm had a clear read on what would happen when several Ohio zones changed grid operators. That summer, six trading days produced about 85 percent of its profit for the year.

Six days. It's a useful number to keep in your head the next time a long stretch of nothing makes you wonder whether a strategy still works.

The Crowd Has to Be Wrong Before You Can Be Big

Spotting the right day is half the job, whereas the other half is betting enough to matter, and that turns out to be the more painful half.

Think about the mechanics: to build a large position, someone has to sell it to you, and in size. That only happens if a lot of people believe the opposite of what you believe. So the thing that makes the trade possible, the crowd's disagreement, is also what pushes the price against you after you get in. A real drawdown on paper is typically the entry fee.

Few people are wired to stick it out through that. Being right in private while the screen insists you're wrong is miserable, and the ability to tolerate it is a big part of what separates professional risk takers from everybody else.

Conviction and Stubbornness Look Identical in the Mirror

The cruel twist is that the trait that wins on the big day is the same one that sinks you on the bad day. Picture a trader short on an afternoon when one specific transmission bottleneck is driving prices up in a corner of the grid. The broader picture still says prices should fall, so the trader stays put, sure the big picture will win. It doesn't. The exit comes hours later than it should have, and every one of those hours had a reasonable explanation attached to it.

That's what makes it so hard to catch. Nobody holds a losing position while thinking, “I'm being stubborn.” They think they're being patient, or disciplined, or contrarian. The story sounds a lot like the one they'd tell on a day they turned out to be right.

The best filter I know is a blunt question: do I know something here that the market doesn't, or am I hoping? If the answer is hope, the move is to say today isn't the day, take the loss, and go home. There's always another trading day. There isn't always another pile of capital, and money spent defending a bad position is money you won't have when a good one shows up.

Data Centers Arrived Just as the Old Plants Were Leaving

Power is also where one of the decade's big economic stories appears first. Data center demand poured into parts of the eastern US grid right as aging plants were retiring, the two trends overlapped badly, and high-priced days have become more common as a result.

New generation and transmission take years to build, so this won't fix itself quickly, and commodity history says the pendulum will eventually swing too far toward oversupply. The long-term arrow still points one way. Data centers, electric cars, electric heating, more air conditioning: it's hard to picture any future that runs on less electricity.

Hunger Is Unteachable, Context Isn't

So who gets good at this? Some proprietary trading firms have stopped chasing veterans and started hiring young people who already show an appetite for risk in their own trading accounts, at the poker table, or in sports betting. The thinking is that the drive can't be taught and everything else can.

The early results are surprising. What firms assumed would take a year and a half of apprenticeship has, in some cases, taken six to eight months, helped along by young analysts who build models with AI tools faster than their bosses ever built spreadsheets. The tools still need someone who knows where to aim them. That knowledge lies in the heads of experienced people and leaks away with them unless someone deliberately hands it down.

The Grid Settles Arguments in Hours. Many Markets Take Years.

In many markets you can be wrong for a very long time without finding out, and right for reasons that had nothing to do with your analysis. Power doesn't give you that cover. The lights have to stay on, and by evening the market has told you exactly how good your thinking was.

Many of us will never get feedback that fast. That's the reason to borrow what power traders have learned the hard way. Collect the premium when the world is calm, recognize the rare day when it isn't, and bet like you mean it when the crowd disagrees and your reasoning holds up. And when the reasoning has turned into a story, have the honesty to walk away.

DISCLAIMER: This article is based on a conversation from Top Traders Unplugged and reflects themes, ideas, and perspectives discussed during the episode. The views expressed are those of the guest and participants in the conversation and should not be interpreted as investment advice or as the official views of Top Traders Unplugged.

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“Metals Broke Lower, Breadth Thinned. Trend Strength Fell to 36%.”

This Week in Trend – 30 October 2026

Welcome to This Week in Trend, our weekly examination of the evolving structure of global futures markets and what that structure means for systematic trend followers. This edition covers market conditions through the US close on Friday, 30 October 2026. Market returns, the SG Trend Index and the TTU Trend Barometer reading are all as at that close.

Market breadth narrowed for a third consecutive week, yet trend-following returns recovered. Only 14 of 49 futures contracts finished higher, the TTU Trend Barometer fell from 41% to 36%, giving back all of last week’s recovery and moving back below the 40% line that separates a cold environment from the Neutral band, and the SG Trend Index advanced from +14.31% to +14.92% year to date. The contrast was most visible in Metals and Meats. Gold broke below its July low near 4,000, and Silver, Platinum and Lean Hogs recorded the three largest declines on the board, each extending an established downward structure. Meanwhile, several of the year’s leading advances, in Oats, Soybean Meal and the US equity indices, continued to retreat. Fewer markets rose, and fewer met the Barometer’s trend-strength criteria, yet the moves that persisted were substantial: all ten of the largest moves on the board were declines, and eight of them ran with the structures beneath them. Breadth and trend prevalence pointed the same way this week, and portfolio returns went the other.

Last week’s report closed by asking whether the Barometer could hold above the 40% line or would slip back into a cold environment, and whether the 10-day rate of change would turn with it. It fell 5 points to 36%, giving back all of last week’s gain, while the 10-day rate of change eased from Falling Moderately to Falling Weakly. Five other questions were left open. Would the pullbacks in Oats, Soybean Meal and Canola stop above the levels from which their climbs began? Would WTI and Brent hold the upper parts of their ranges? Would Gold’s July low near 4,000 hold? Would the bounce in Bonds become a higher high? And where would October close for the SG Trend Index? Canola held close to last week’s level, while Oats and Soybean Meal fell further, Soybean Meal back toward the level from which its September climb began, and Rough Rice eased from its high. WTI rose for a fourth week while Brent eased slightly from the top of its range. Gold did not hold, falling to near 3,885. Bonds rose for a fourth week, and none of the four charts has yet set a higher high. And the SG Trend Index, which stood at -1.29% for October a week ago, closed the month at -0.77% on SG’s estimated figure.

Trend Indicators: Barometer Falls to 36%, SG Trend Index Recovers

The Top Traders Unplugged (TTU) Trend Barometer measures the percentage of markets generating medium-to-strong trends. Below 40% reads as a cold environment for trend-following, above 55% reads as a favourable one, and the band between is neutral.

TTU Trend Barometer: 36%, down from 41% last week. TTU describes overall trend strength as Moderately Weak, down from Neutral, and the reading has moved 4 points below the 40% line into the cold environment, 19 points below the 55% threshold for a favourable environment. The 10-day rate of change now reads Falling Weakly, compared with Falling Moderately a week ago, so TTU’s short-term measure is still declining, though less steeply. The five-week sequence, from 2 October to 30 October, now stands at 52, 50, 36, 41 and 36. The reading is 6 points above the late July low of 30% and 16 points below the 52% at which the sequence begins, and it has given back all 5 points it recovered last week, returning to its 16 October level. The lower reading indicates that fewer markets met the Barometer’s medium-to-strong trend criteria. It does not, by itself, establish how trend-following portfolios performed or whether the remaining trends became less profitable.

Set against the performance table, breadth and the reading fell together, while the moves themselves grew larger. Fourteen of 49 contracts rose, down from 19, and seven of the ten categories in the snapshot fell, the same as a week ago. The average absolute weekly move increased from 2.34% to 2.54%, while the spread between the largest gain and the largest loss narrowed from 19.74 to 14.03 percentage points, because no single contract moved as far this week as Natural Gas did last week. The board was busier, and most of the extra movement was on the downside. Narrow participation alongside a cold reading separates two counts that are easy to conflate: how many markets rose, and how many are trending. The Barometer measures the second, and a market trending lower is part of that count as much as one trending higher.

Because the reading counts trends rather than weighing weekly price changes, a week of larger moves does not necessarily lift it, and this week the measured proportion of trending markets eased even as the average absolute move widened. The ten largest moves on the board illustrate the mix without explaining the reading. All ten were declines, and eight of them ran with the structures beneath them, up from five a week ago. Lean Hogs, Silver, Platinum, Palladium and Natural Gas extended their declines, Orange Juice fell back toward the lows of the decline that has run most of the year, Coffee resumed the decline from its July spike, and Bitcoin fell further inside the decline from above 120,000. Two ran against: Oats and Soybean Meal fell further from the highs that had led the Grains complex. The largest gain on the board, the VIX at 3.81%, was only the fourteenth largest move overall. Further down the table, the counter-trend share remained large.

The sector data is consistent with a trend environment that stayed cold, with the declines doing more of the work than the advances. Running with their structures, Gold broke below its July low, Silver fell to its lowest level since the winter, Platinum moved further below its summer low and Palladium fell below 1,000. Lean Hogs set another low, EUR moved to the lowest level on its chart, Corn fell for a fifth week and Wheat for a ninth, Coffee gave back its rebound, and Orange Juice fell back toward its lows. WTI rose within its advance. Running against them, Oats and Soybean Meal fell further from the top of their charts, Rough Rice eased from its high, Sugar pulled back from its high for a second week, and Copper eased for a third week from close to its own. All four Bonds maturities rose for a fourth week inside their declines, and the DAX, Euro Stoxx 50 and the Russell 2000 lifted inside their pullbacks. Both cattle contracts gave back their bounces and resumed the declines from their spring highs. At 36%, the reading sits alongside a board on which the declines extended across Metals, Meats and Grains while few advances outside the petroleum complex made progress.

SG Trend Index: -0.77% month to date for October and +14.92% year to date as of 30 October, on SG’s estimated figure. The year-to-date figure has risen from +14.31% to +14.92%, a gain of 0.61 percentage points and the index’s first weekly gain in three weeks, recovering most of last week’s 0.66 point decline. With 30 October the last trading day of the month, the month-to-date figure now covers all twenty-two trading days of October. Set against the Barometer, the index rose while the reading fell, the reverse of last week. Over the last five weeks the Barometer has held, fallen 2, fallen 14, risen 5 and fallen 5, while the index has given back 0.33 percentage points, added 0.42, given back 1.17, given back 0.66 and added 0.61. This is the third time in five weeks that the two have moved in opposite directions. The Barometer counts trending markets, while the index records what institutional trend-following portfolios earned, and a fall in the first need not show up in the same week’s returns. The index’s recovery is consistent with an environment in which persistent declines offered opportunities for short positions, even as several established advances remained interrupted. Without the index’s underlying positions and return contributions, the precise sources of its improvement cannot be established. Across the five weeks the index has given back 1.13 percentage points.

Weekly Asset Class Snapshot

Source: Finviz.com.
Sector averages are simple equal-weighted means of the constituent contracts in each sector.

Equity Indices (+0.21% | prev -0.81%)

Equity Indices gained 0.21% with three of seven contracts higher, the sector’s first weekly gain in four weeks and a narrow one. The DAX rose 2.58%, the second largest gain on the board, the Russell 2000 1.32% and Euro Stoxx 50 1.14%, while the Nikkei 225 fell 0.09%, the S&P 500 0.60%, the DJIA 0.91% and the Nasdaq 100 2.00%. Last week Europe and Japan led the decline while the US indices were mixed. This week Europe led the recovery and the US large-cap indices fell, with Finviz’s charts showing sharp falls in the final session. The DAX near 25,810 recovered last week’s loss, still inside the range below its late August high, and Euro Stoxx 50 near 6,120 lifted from the June levels to which its pullback had run. The Russell 2000 near 2,820 rose for a second week from the lower part of its pullback from the summer high near 3,100. The Nasdaq 100 near 28,545 fell further from its high near 31,500, the S&P 500 near 7,615 eased again from its own, and the DJIA near 51,930 slipped back below 52,000, still under its August high near 54,000. The Nikkei 225 near 62,480 held in the middle of its summer range. The advances that have run since the spring remain visible on all seven charts, but none of the seven set a high this week, and the pullback in Europe has now run for two months.

Energy (-1.33% | prev -0.81%)

Energy fell 1.33% with two of six contracts higher, a second weekly decline and a larger one. Crude Oil WTI rose 0.82% and Gasoline RBOB 0.60%, while Crude Oil Brent fell 0.20%, Ethanol 1.10%, Heating Oil 3.11% and Natural Gas 4.98%, the tenth largest move on the board. Without Natural Gas, the sector average would be close to -0.60%. WTI near 103 rose for a fourth week and holds the upper part of the range it has built since the spring, while Brent near 112 eased slightly after reaching the top of its own range last week. Heating Oil near 4.66 pulled back from the area of its high, and Gasoline RBOB near 3.11 remains inside the range below its spring high. Ethanol near 2.02 eased for a second week from the highest level on its chart. Natural Gas near 2.88 fell again within the base it has held since the summer, and the decline that has run since February remains the dominant feature of its chart. Last week the crude contracts rose sharply while Natural Gas collapsed. This week the moves were smaller, the crude advances paused rather than reversed, and Natural Gas again ran with its decline.

Metals (-5.19% | prev -4.27%)

Metals fell 5.19% with all five contracts lower for a third week, the third weakest sector on the board and a larger decline than last week’s. Copper fell 0.39%, Gold 2.72%, Palladium 6.07%, Platinum 8.09% and Silver 8.66%, the second largest decline on the board. Last week the precious metals fell further and faster, and Gold fell back to the area of its July low. This week that level gave way. Gold near 3,885 broke below its July low near 4,000 to the lowest level on its chart, extending the decline from its late winter peak. Silver near 49.14 fell below 50, extending its fall to the lowest level since the winter. Platinum near 1,435 moved further below its summer low, and Palladium near 978 fell below 1,000 to another low. Copper near 6.51 eased for a third week, a small move from close to the highest level on its chart, and the advance that has run since last autumn is intact. Four of the five moves ran with the structures beneath them for a third week. For a portfolio maintaining short exposure to the prevailing declines in the precious metals, the larger weekly falls would have contributed positively for a third week, subject to position sizing and execution, while Copper’s small decline would have been a modest cost to one following an advance that remains in place.

Soft Commodities (-3.87% | prev -1.14%)

Soft Commodities fell 3.87% with five of six contracts lower and Lumber unchanged, a second weekly decline and a much larger one. Cocoa fell 2.49%, Cotton 2.96%, Sugar 4.35%, Coffee 6.59% and Orange Juice 6.83%, the fifth largest decline on the board. Coffee near 287 gave back the rebound of recent weeks and resumed the decline from its July spike. Orange Juice near 133 fell back to the lowest levels on its chart, extending the decline that has run most of the year. Sugar near 19.37 pulled back from its high for a second week, though it remains well above the area from which its breakout began and the breakout still stands. Cotton near 77.90 eased further below its August high, and Cocoa near 5,455 slipped again inside its rebound from the spring. Lumber near 515 held close to the low it set last week. Last week Sugar’s pullback would have worked against a portfolio following its advance, and the falls in Lumber and Orange Juice would have favoured one positioned with their declines. This week Sugar’s second pullback was a further cost to the advance, while the falls in Coffee and Orange Juice would have favoured a portfolio positioned with their declines.

Grains (-3.00% | prev -2.66%)

Grains fell 3.00% with all eight contracts lower, a third weekly decline and a slightly larger one. Canola fell 0.35%, Rough Rice 0.50%, Soybean Oil 1.39%, Corn 1.81%, Soybeans 2.70%, Wheat 3.44%, Soybean Meal 6.21% and Oats 7.59%, the fourth largest decline on the board. Last week the contracts near their highs pulled back further while Rough Rice extended. This week Rough Rice joined them. Rough Rice near 17.89 eased from its high, a small move against an advance that remains steep and intact. Oats near 344 gave back most of its rise to the high set three weeks ago, and Soybean Meal near 325 fell back toward the level from which its September climb began. Canola near 779 held close to last week’s level below the top of its chart, and Soybeans near 1,234 fell further from its September high. Corn near 448 fell for a fifth week, back toward the level it held before its August gap, and Wheat near 603 fell for a ninth week as it unwinds its August spike. Soybean Oil near 65.8 eased inside the range below its summer peak. Two of the eight moves, Corn and Wheat, ran with the structures beneath them. The advances in Oats and Soybean Meal have now been interrupted for three weeks, and Soybean Meal is close to the point at which a pullback becomes a test of the advance itself.

Meats (-6.18% | prev +0.43%)

Meats fell 6.18% with all three contracts lower, the weakest sector on the board. Live Cattle fell 4.40%, Feeder Cattle 3.93% and Lean Hogs 10.22%, the largest move on the board in either direction. Last week both cattle contracts resumed their bounces. This week they gave them back. Feeder Cattle near 331 and Live Cattle near 221 fell from the upper parts of their bounces, and the declines that have run from their spring highs remain intact, with no higher high on either chart. Lean Hogs near 59.00 moved to another low, extending the decline from its spring high for a fourth week and falling below 60 for the first time on its chart. For a portfolio carrying short exposure in the sector, all three contracts would have contributed positively this week, after a week in which the cattle bounces were a cost.

Bonds (+0.35% | prev +0.73%)

Bonds gained 0.35% with all four contracts higher, a fourth weekly gain and a smaller one. The 10 Year Note rose 0.46%, the 30 Year Bond 0.38%, the 5 Year Note 0.37% and the 2 Year Note 0.19%. For the first time in four weeks the gains did not grow with maturity: the 10 Year Note led, and the long end lifted less than it has in recent weeks. The 30 Year Bond near 107.63 and the 10 Year Note near 106.64 have recovered a larger share of their autumn falls, and the 5 Year Note near 104.89 and the 2 Year Note near 102.26 lifted further from their lows. Last week this report asked whether the bounce would become a higher high or the declines would resume. Neither has happened yet. The bounce has now run for four weeks, but none of the four charts has set a higher high, and the declines that have run since the winter peaks remain intact on all of them. For a portfolio carrying short exposure across the curve, the week would have been a cost at every maturity for a fourth week, though a smaller one than in the previous two.

Currencies (-0.15% | prev +0.47%)

Currencies fell 0.15% with four of eight contracts higher, as the dollar held its ground and the basket split. CAD rose 0.30%, GBP 0.17%, CHF 0.11% and the US Dollar Index 0.10%, while AUD fell 0.06%, EUR 0.26%, JPY 0.39% and NZD 1.14%. The Dollar Index near 101.83 held near the highest level on its chart. EUR near 1.1180 moved to the lowest level on its chart, extending the decline that has run since the summer, and CHF near 1.2184 held close to its low. AUD near 0.7026 held just above 0.70, and its climb from last year’s lows remains the firmest upward structure in the basket. CAD near 0.7170 lifted further from its summer low, and GBP near 1.3392 rose within the lower part of its range. NZD near 0.5640 gave back last week’s lift and fell back toward the bottom of its range, and JPY near 0.6366 eased inside the decline that has run all year. Last week the commodity currencies lifted and EUR and CHF slipped. This week EUR ran with its decline to a new low, NZD and JPY fell back in line with theirs, and the lifts in CAD and CHF ran against the structures beneath them.

Volatility, Crypto: The VIX rose 3.81% to near 20.2, the largest gain on the board, moving back above 20 after last week’s fall while remaining near the middle of its range for the year, well below its spring spike near 30. Market pricing reflected a week in which the European indices recovered while the US large-cap indices fell, with the sharpest falls in the final session. Bitcoin fell 5.61% to near 76,900, a fourth weekly decline and the ninth largest move on the board. The rebound from the summer lows near 60,000 has faded back below 80,000, and the decline from above 120,000 remains the dominant feature of its chart.

Top Movers

Source: Finviz.com.
Top five up and top five down by single-week percentage move.

The two halves of the table are uneven again this week, and for a second week the declines are the larger half, this time by a wide margin and across several sectors rather than because of one move. The five largest gains range from 3.81% to 0.82%, and the five largest declines from 10.22% to 6.83%. The gainers come from three sectors. The DAX, the Russell 2000 and Euro Stoxx 50 lifted inside their pullbacks, WTI rose within its advance, and the VIX rose within its range. The losers come from four sectors. Lean Hogs, Silver and Platinum extended their declines, Orange Juice fell back toward the lows of its decline, and Oats fell further from its high. Across the ten largest moves on the board, all of them declines, eight ran with the structures beneath them, up from five a week ago. The largest moves came overwhelmingly from established declines. That is consistent with an environment in which downside trends persisted, though a sample of ten moves cannot establish the Barometer’s precise reading or account for its 5 point fall.

Portfolio View

For a portfolio positioned with the prevailing trends, the persistent declines in the precious metals, Meats, several agricultural markets and Natural Gas offered potential gains on the short side, while the advances in WTI and Copper held without adding much for long exposure aligned with them. The Barometer fell to 36%, 4 points below the Neutral band, and the SG Trend Index added 0.61 percentage points to +14.92% year to date. On the short side, Gold broke below its July low, Silver, Platinum and Palladium fell further, Lean Hogs and EUR set new lows, the cattle contracts resumed their declines, Coffee and Orange Juice fell back, and Corn and Wheat fell again. WTI rose within its advance, while Rough Rice, Sugar and Copper eased from their highs. The further pullbacks in Oats and Soybean Meal would have worked against positions following their advances, as would the rises in Bonds, CAD and CHF for positions following the prevailing declines. The net result would have depended on each portfolio’s positions, sizing and execution, which a week of prices does not reveal. The week was directional on the downside across Metals, Meats and Grains, while established advances stayed interrupted in the leading Grains and the equity indices, and established declines were interrupted again in Bonds.

Final Reflections

After a week in which breadth and trend strength moved apart, this week they fell together, and the return figure went the other way. Two of the three measures this report tracks fell and the third rose. The split is less contradictory than it looks, because each of the three measures something the others do not.

The week’s lesson sits in the gap between how many markets moved and how far the trending ones travelled. The Barometer counts trends; it does not weigh them. The declines in the precious metals and Lean Hogs were few against the breadth of the board, but each extended a structure already in place, and each was large.

1. Fewer markets rose, and fewer were trending. Breadth and trend strength fell together, while the size of the moves increased.

The five-week sequence now reads 52, 50, 36, 41 and 36. The reading sits 4 points below the Neutral band, back at its 16 October level, while its 10-day rate of change reads Falling Weakly. With declines extending and several of the year’s leading advances still interrupted, the reading gave back all of last week’s 5 point recovery.

2. The return figure rose while the Barometer fell. The index’s recovery is consistent with persistent declines offering opportunities even as established advances stalled.

For a trend-following portfolio, persistent movement in the direction of its positions creates opportunities for gains, while reversals can impose losses, and the eventual contribution depends on exposure, position sizing and execution. Eight of the ten largest moves this week ran with the structures beneath them, so the week offered more persistence than a cold reading might suggest. Without the index’s underlying positions and return contributions, the precise sources of its improvement cannot be established.

This week was a reminder that the direction of a move and its value to a trend follower are separate measurements. Silver fell 8.66%, a move that would have benefited a position aligned with its decline, while Oats fell 7.59%, a move that would have worked against a position following its advance. WTI rose 0.82% and would have benefited a position aligned with its advance, while the 10 Year Note rose 0.46% and would have worked against a position carrying short exposure in its decline. Rising markets are not good markets for a portfolio positioned against them, and falling markets are not bad ones for a portfolio positioned to fall with them. What matters each week is whether a market moved with the structure a portfolio was following.

The week ahead is therefore about whether the Barometer can hold at 36%, the low of its five-week sequence, or extends toward its late July low of 30%, and whether the 10-day rate of change, now Falling Weakly, turns up. Metals are the sector to follow: Gold has broken below its July low near 4,000, and whether the break extends or the level is reclaimed matters for the whole precious metals complex. In Grains, Soybean Meal has fallen back toward the level from which its September climb began, and whether it holds there will shape the complex. Bonds have bounced for four weeks without a higher high. The US equity indices ended the week with sharp falls in the final session, and their pullbacks from the highs remain open. And November opens with the SG Trend Index at +14.92% for the year. In each case the question is the same one it always is: does the structure persist? For trend followers, up or down was never the central question. Persistence was. The opportunity was directional, but not directionally biased.

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List of Resources used in the Week in Review

Important Disclaimers

This document is directly solely to Accredited Investors, Qualified Eligible Participants, Qualified Clients and Qualified Purchasers. No investment decision should be made until prospective investors have read the detailed information in the fund offering documents of any manager mentioned in this document. This document is furnished on a confidential basis only for the use of the recipient and only for discussion purposes and is subject to amendment This document is neither advice nor a recommendation to enter into any transaction. This document is not an offer to buy or sell, nor a solicitation of an offer to buy or sell, any security or other financial instrument. This presentation is based on information obtained from sources that TopTradersUnplugged (“TTU”) (“considers to be reliable however, TTU makes no representation as to, and accepts no responsibility or liability for, the accuracy or completeness of the information. TTU has not independently verified third party manager or benchmark information, does not represent it as accurate, true or complete, makes no warranty, express or implied regarding it and shall not be liable for any losses, damages, costs or expenses relating to its adequacy, accuracy, truth, completeness or use.

All projections, valuations, and statistical analyses are provided to assist the recipient in the evaluation of the matters described herein. Such projections, valuations and analyses may be based on subjective assessments and assumptions and may use one among many alternative methodologies that produce different results accordingly, such projections, valuations and statistical analyses should not be viewed as facts and should not be relied upon as an accurate prediction of future events. There is no guarantee that any targeted performance will be achieved Commodity trading involves substantial risk of loss and may not be suitable for everyone

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In reviewing this document, it should be understood that the past performance results of any asset class, or any investment or trading program set forth herein, are not necessarily indicative of any future results that may be achieved in connection with any transaction. Any persons subscribing for an investment must be able to bear the risks involved and must meet the suitability requirements relating to such investment. Some or all alternative investment programs discussed herein may not be suitable for certain investors This document is directed only to persons having professional experience in matters relating to investments. Any investment or investment activity to which this document relates is available only to such investment professionals. Persons who do not have professional experience in matters relating to investments should not rely upon this document.

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This document contains simulated or hypothetical performance results that have certain inherent limitations AND SHOULD BE VIEWED FOR ILLUSTRATIVE PURPOSES. Unlike the results shown in an actual performance record, these results do not represent actual trading. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR INVESTMENT ACCOUNT.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM OR OTHER ASSET.

There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. No representation is being made that any investment will or is likely to achieve profits or losses similar to those being shown.

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The Returns Catch Up

September added to August’s gains and opened a clear gap over equities. All three trend benchmarks gained between 3.03 and 4.26 percent, while the S&P 500 Total Return Index slipped 0.35 percent. The TTU Trend Barometer read 55, 59, 45 and 52 across the four weekly closes of the month. August had climbed in a straight line from 30 to 55, and September did not repeat that. In the second week the reading moved into the favourable band for the first time since the late July low. It fell 14 points the following week and recovered half of that fall in the fourth. The returns took a steadier path. The SG Trend Index gained in every week of the month and gave back a little only in the final three sessions. Its largest weekly gain came in the week the fewest markets rose.

The ranking of the three benchmarks changed again. The SG Trend Index led at plus 4.26 percent, followed by the TTU Trend Following Index at plus 3.77 percent and BTOP50 at plus 3.03 percent. The spread from first to third widened to 123 basis points, from 92 in August. The order of the two pure trend benchmarks has now flipped in each of the past two months. The SG Trend Index moved from third in August to first, and the TTU TF Index slipped to second. BTOP50, the broadest of the three constructions, finished last. That ordering fits a month in which the payoff came from established trends in a limited number of sectors. The two pure trend benchmarks appear to have captured more of it than the broader BTOP50 mix.

The weekly path shows how the month unfolded. The first week left the Barometer unchanged at 55, and the SG Trend Index opened September at plus 0.59 percent. In the second week the reading rose to 59 even though only 14 of the 49 contracts in the weekly market review finished higher. The index added 2.20 percentage points, its strongest week of the month, as much of that week’s persistence ran downward. The third week reversed the relationship between breadth and the Barometer. Eighteen contracts rose, the reading fell 14 points to 45, and the index added only 0.44 percentage points. In the last full week, to 25 September, the reading recovered to 52 and the index added 1.24 percentage points to reach plus 4.47 percent. It gave back 0.21 percentage points in the three sessions to month end and finished at plus 4.26 percent. The Barometer held at 52 through the week that straddled the month end.

The benchmark results for September were as follows:

  • TTU Trend Following Index: +3.77 percent for September (trailing 12 months +20.08 percent)
  • SG Trend Index: +4.26 percent for September (trailing 12 months +21.33 percent)
  • BTOP50 Index: +3.03 percent for September (trailing 12 months +17.80 percent)
  • S&P 500 Total Return: -0.35 percent for September (trailing 12 months +15.74 percent)

Trailing twelve-month returns eased across the board despite the month’s gains. September 2025 has now left the window, and it was a stronger month for each benchmark than the September that replaced it. The TTU TF Index moved to 20.08 percent from 22.23 percent and the SG Trend Index to 21.33 percent from 23.04 percent. BTOP50 moved to 17.80 percent from 17.96 percent. The S&P 500 Total Return Index fell furthest, to 15.74 percent from 20.38 percent. Year to date, the SG Trend Index stands at 15.80 percent, BTOP50 at 14.81 percent and the TTU TF Index at 14.16 percent, against 12.75 percent for the S&P 500 Total Return Index. A month ago all three trend benchmarks trailed the S&P 500 on the year. All three now lead it, by between 141 and 305 basis points. The TTU TF Index still trails the SG Trend Index by 164 basis points and BTOP50 by 65.

August showed returns lagging the Barometer as it rose. In September the returns caught up, and then they began to move with the reading rather than behind it. Week by week, the Barometer held, rose 4, fell 14 and rose 7. The SG Trend Index gained 0.59, 2.20, 0.44 and 1.24 percentage points month to date over the same weeks. The return figure closed the gap in the first fortnight. After that its weekly gain shrank when the reading fell and recovered when the reading recovered. The best week came when only 14 of 49 contracts rose, because many of that week’s persistent moves were declines, and a trend follower can profit from a falling market as readily as from a rising one. The cycle that began in January remains intact, and September closes with the Barometer at 52, three points below the favourable band.

August 2026 Trend Index Performance

September was a second consecutive gain for the trend benchmarks, and this time equities did not come with them. The SG Trend Index gained 4.26 percent, the TTU Trend Following Index 3.77 percent and BTOP50 3.03 percent, while the S&P 500 Total Return Index lost 0.35 percent. August had drawn its return from a changing set of sources. In September the largest persistent moves came from a few established trends: the petroleum advance in the first half of the month, declines in Bonds and the precious metals for most of it, and the upper reaches of Grains late in the month. The Barometer was less orderly than in August. It rose to 59, fell to 45 and recovered to 52, yet the SG Trend Index improved at each of the four weekly closes. The index gained most in the weeks when established moves extended, and least in the week when the largest moves on the board ran against existing trends.

September opened with one sector doing most of the travelling. In the week to 4 September, Energy gained 5.95 percent with all six contracts higher. WTI rose 9.69 percent, Brent 9.28 percent, Heating Oil 6.85 percent and Gasoline RBOB 5.39 percent. The crude pair reclaimed the ground it had surrendered late in August and pushed above the levels that had contained it through July and August. Breadth across the 49 contracts in the weekly market review barely moved, from 21 to 24 higher, but the average move across the board rose from 0.43 to 2.24 percent. Elsewhere, the quieter moves extended trends already in place. Bonds fell across all four maturities, with the declines growing with maturity, to or near the lowest levels on their charts. Metals fell for a second week with four of five contracts lower, Coffee extended a decline running since spring and the VIX fell for a seventh week. Grains paused after their late August surge, with Wheat giving back 6.38 percent of its 12.12 percent gain, and the currency basket split four and four. The Barometer held at 55 and the SG Trend Index opened the month at plus 0.59 percent. The week’s largest move took the petroleum complex out of its summer range, so it was still young as a trend.

The second and third weeks showed the difference between extension and interruption. In the week to 11 September only 14 of 49 contracts rose, yet the SG Trend Index posted its best week of the month. The petroleum complex extended, with WTI up 9.37 percent to near 100, Heating Oil up 9.23 percent and Brent up 8.65 percent. Bonds fell across all four maturities again, with the 30 Year Bond down 1.78 percent and the sector average close to four times the prior week’s. Metals fell on all five contracts for a third week, led by Palladium at minus 5.70 percent. Orange Juice fell 6.98 percent back to the lows of a decline running most of the year, and Coffee fell for a third week. The cattle pair moved against their declines and Natural Gas fell 4.84 percent, but these were exceptions. The Barometer rose to 59 and the SG Trend Index added 2.20 percentage points to reach plus 2.79 percent month to date.

The week to 18 September broke that coherence. Breadth improved to 18 of 49 contracts higher, but the Barometer fell 14 points to 45. Metals rose on four of five contracts, with Silver up 3.01 percent inside its decline. The 30 Year Bond rose while the shorter maturities fell, and the Nasdaq 100 and Nikkei 225 gained while the other five equity indices fell. Soft Commodities fell 5.19 percent on all six contracts. Cocoa, Cotton and Sugar fell against their summer advances, with Cocoa down 10.64 percent, while Coffee, Orange Juice and Lumber extended their declines. Energy gained for a third week as leadership rotated to Gasoline RBOB, up 6.66 percent, and Oats rose 7.26 percent to the highest level on its chart. Six of the ten largest moves on the board ran against the prevailing trend in their market. The SG Trend Index added only 0.44 percentage points to reach plus 3.23 percent.

The last full week of the month looked like rotation, but most of the turnover was the previous week’s interruptions reversing. In the week to 25 September six of ten sectors changed sign, with Soft Commodities and Meats moving from weakest to strongest. Silver, Palladium, Gold and Platinum resumed the declines they have traced since February. Bonds fell across all four maturities to new lows, again with the declines growing with maturity. Grains gained 1.61 percent with six of eight contracts higher. Rough Rice rose 6.04 percent and Oats 3.38 percent, and Soybean Meal reached the top of its chart. The Nasdaq 100 set a new high, and the US Dollar Index led the currency basket higher for a second week. Against that, Energy turned sharply lower. Heating Oil fell 7.72 percent, Gasoline RBOB 4.04 percent and WTI 3.82 percent from the upper end of their charts. Orange Juice, Natural Gas and Feeder Cattle also produced large gains inside declines that remain intact. The Barometer recovered 7 points to 52, and the SG Trend Index added 1.24 percentage points to reach plus 4.47 percent at the last full weekly close. It gave back 0.21 percentage points in the three sessions to month end and closed September at plus 4.26 percent.

At 30 September 2026, the TTU Trend Following Index contained 52 active programs, unchanged from August. Forty-five programs had reported by the cut-off, leaving seven outstanding, as highlighted in the table below. They are Eckhardt Trading Company: Evolution Strategy, Finaltis: Cyril Systematic Strategy, Purple Valley Capital: Diversified Trend 1, QQFund.com: Alpha Beta Program, Salus Alpha Capital: Directional Markets (DMX), Seven Capital Management: Seven Absolute Return Fund and Winton Capital Management: Winton Multi-Strategy. Three of the seven, Finaltis, Purple Valley and Seven Capital, were also outstanding at the August cut-off. Reporting coverage has slipped from August, when four programs were outstanding, but remains ahead of July, when nine were. August’s return has since been revised to 3.86 percent from the provisional 3.63 percent as late reporters came in. The September return of 3.77 percent may also change as the remaining seven programs report, and with 45 of 52 in, the scope for revision is wider than it was a month ago. The construction methodology is unchanged and continues to require a fully verified 15-year track record.

September’s relationship with equities was divergence. The S&P 500 Total Return Index lost 0.35 percent, and the trend benchmarks gained between 338 and 461 basis points more. The S&P 500 contract was unchanged in the first week, lost 0.80 percent in the second and 0.19 percent in the third, and gained 1.18 percent in the fourth. The equity indices fell for three consecutive weeks as a sector, uniformly so in the week to 11 September. None of the seven contracts gave up the ground that would put its spring advance in question, and the Nasdaq 100 finished the month at new highs. For portfolios carrying long equity exposure, that pullback was more likely a modest cost than a source of return. The long-run correlation between the TTU TF Index and the S&P 500 remains minus 0.09. The month’s largest established moves were outside equities: Energy in the first fortnight, Bonds and the precious metals for most of the month, and Grains in the last full week.

SG Trend Index

The SG Trend Index is designed to track the 10 largest trend following CTAs of the Managed Futures space.

Criteria for inclusion in the Index, as determined by Société Générale, are as follows:

  • Must trade primarily futures (including FX forwards);
  • Must be broadly diversified across asset classes;
  • Must be an industry recognized trend follower;
  • Must exhibit significant correlation to trend following peers;
  • Must be open to new investment; and
  • Must report returns on a daily basis (net of fees).

The index currently is:

  • Equally weighted;
  • Calculated in base currency;
  • Has an inception date of 1st January 2000;
  • Rebalanced annually on 1st January; and
  • Reconstituted annually on 1st January based on eligibility criteria.

There was a slight modification to the Index from January 2013 to the present. Previously, the Programs needed to be a constituent of the SG CTA Index, and the 10 largest Managers was not a requirement.

For the 2026 year, following the annual rebalance of the Index, we say goodbye to the Systematica Investments (BlueTrend) Program and welcome back the PIMCO LLC (PIMCO Trends Managed Futures) Program. The listing of the 10 eligible programs in the Index for 2026 is as follows:

Table 1 – SG Trend Index 2026 Constituents

The SG Trend Index, which tracks the ten largest institutional trend-following CTAs, gained 4.26 percent in September, a second consecutive positive month. It finished first among the three trend benchmarks, 49 basis points ahead of the TTU Trend Following Index at 3.77 percent and 123 basis points ahead of the BTOP50 at 3.03 percent. In August it had finished third. The trailing twelve-month return eased to 21.33 percent from 23.04 percent despite the strong monthly result, because the September 2025 observation leaving the window was stronger still. The year-to-date figure climbed to 15.80 percent from 11.07 percent. That moves the index to the head of the field, 99 basis points ahead of the BTOP50, 164 ahead of the TTU TF Index and 305 ahead of the S&P 500 Total Return Index.

The month’s shape differed from August’s. August opened with a loss and depended on a 1.28 percentage point gain in its final session. September gained in every week and gave back 0.21 percentage points only in the three sessions after the last full weekly close. Month to date, the index stood at plus 0.59, 2.79, 3.23 and 4.47 percent at the four weekly closes. The second and fourth weeks, when established trends extended across several sectors at once, supplied 3.44 of the 4.47 percentage points gained by 25 September. The third week, when many of those trends were interrupted, added only 0.44.

The long-term characteristics of the SG Trend Index improved again on the month. Since inception it has delivered a historical CAGR of 5.75 percent with a maximum drawdown of 20.61 percent, reflecting both the durability and the inherent cyclicality of large-scale systematic programs. The CAGR rose from 5.60 percent at the close of August, its second consecutive monthly improvement. The maximum drawdown was unchanged for a fourth consecutive month. These managers benefit most when sustained trends persist in the direction of their positioning, and September offered sustained trends in Energy, Bonds and the precious metals.

Since its launch in 2000, the SG Trend Index has maintained its role as a core institutional benchmark for trend-following performance. Over the long run it sits between the higher-returning TTU Trend Following Index and the broader BTOP50 Index, capturing the central tendency of the industry’s largest managers. In September it led the monthly ordering. The two AUM-based benchmarks, which had finished a single basis point apart in August, separated by 123 basis points. Its high correlation of 0.95 with the TTU TF Index reinforces its usefulness as a barometer of collective institutional behaviour, even as its construction produces more moderated long-run returns relative to smaller or more aggressive trend-following composites.

The performance of the SG Trend Index since 1st January 2000 to the end of last month is seen in the following chart:

Chart 1 – SG Trend Index Performance

You will notice how the SG Trend Index is highly correlated with the BTOP50 Index and the TTU TF Index and uncorrelated with the S&P500TR Index.

Despite the high correlation between the various trend following Indexes, the long-term performance of these three Trend Following Indexes in terms of CAGR is different. The SG Trend Index plots between the BTOP50 Index and the TTU TF Index.

BTOP 50 Index

The BTOP50 Index seeks to replicate the overall composition of the managed futures industry with regards to trading style and overall market exposure. Unlike the SG Trend Index and the TTU TF Index, the BTOP50 is not strictly a trend following Index and is more broadly representative of the entire managed futures segment of which a dominant style is trend following. We like to think of the BTOP 50 as a ‘quasi trend following Index' as opposed to a pure trend following Index.

Like the SG Trend Index, the BTOP50 Index is designed to track the performance of the largest Programs by AUM, however the Programs included may not be all Trend Following Programs.

Criteria for inclusion in the Index as determined by BarclayHedge is as follows:

  • Must be a Program represented in the Barclay CTA Universe;
  • In each Calendar year, the Programs selected must in aggregate be no less than 50% of the investable assets of the Barclay CTA Universe;
  • The Programs must be open for investment;
  • The Manager must be willing to provide Barclay Hedge with daily return performance;
  • The Program must have at least two years of trading activity; and
  • The Program's advisor must have at least three years of operating history.

The index currently is:

  • Equally weighted;
  • Rebalanced annually on 1st January; and
  • Reconstituted annually on 1st January based on eligibility criteria.

The TTU TF Index is highly correlated with both BTOP50 and the SG Trend Index, yet its long-term performance has been materially stronger. The key distinction is the requirement that every constituent program brings a long, verified track record to the index.

AUM can tell us a great deal about market acceptance, but it tells us far less about durability. Popularity and long-term performance are not the same thing. By selecting on demonstrated longevity rather than asset size, the TTU construction asks a different question: which programs have actually survived and delivered across multiple market regimes?

That construction also gives us a useful view of ensemble diversification. As more independently implemented, long-tenured trend programs are combined, idiosyncratic manager outcomes are diluted. Historically, the result has been a stronger compound return alongside shallower portfolio drawdowns. There is nothing magical about it. It is diversification doing what diversification is supposed to do.

The BTOP50 Index gained 3.03 percent in September, a second consecutive positive month. It finished third among the three trend benchmarks, 74 basis points behind the TTU Trend Following Index and 123 basis points behind the SG Trend Index. In August it had finished second. Over the trailing twelve months the index now stands at 17.80 percent, down slightly from 17.96 percent in August, because the September 2025 observation leaving the window was marginally stronger than the month that replaced it. The year-to-date figure stands at 14.81 percent. A month ago the broad managed futures composite led the three trend benchmarks on a year-to-date basis. It now sits second among them, 99 basis points behind the SG Trend Index, and remains 65 basis points ahead of the TTU TF Index and 206 ahead of the S&P 500 Total Return Index.

The long-term profile of the BTOP50 improved again on the month. Since inception it has produced a historical CAGR of 4.51 percent with a maximum drawdown of 15.94 percent, reinforcing its reputation for stability and drawdown moderation. The CAGR rose from 4.40 percent at the close of August, its second consecutive monthly improvement, as another gain well above the long-term compounding rate lifted the figure. The maximum drawdown was unchanged for a fourth consecutive month.

September extended the pattern that August began. In July the BTOP50’s broad construction worked as protection, because the index committed less to the trends that broke and so gave back less. In August and September the trends in place persisted, and the same broad construction gained less from them. In August the shortfall was against the TTU TF Index alone, and the BTOP50 matched the SG Trend Index almost exactly. In September it trailed both pure trend benchmarks. The month’s largest persistent moves were in Energy, Bonds and the precious metals, and the two benchmarks built entirely from trend-following programs gained more. Across the three months, the index lost least when persistence failed and lagged the TTU TF Index when persistence held. That pattern is consistent with a broad managed futures composite, and with the lowest long-run return of the three.

The index’s high correlation of 0.96 with the SG Trend Index and 0.93 with the TTU TF Index confirms that its performance remains closely aligned with its trend-following peers, even as its broader mandate produces more moderated long-term returns. The correlation of minus 0.10 with the S&P 500 Total Return Index remains an important structural feature of the index over the long run. In September the two moved apart. The S&P 500 lost 0.35 percent while the BTOP50 gained 3.03 percent, a difference of 338 basis points. That follows August, when the two rose together, and July, when they moved independently. Three consecutive months have now shown each of the relationships a correlation near zero allows.

The performance of the BTOP 50 Index since 1st January 2000 to the end of last month is seen in the following chart:

Chart 2: BTOP50 Index Performance

The BTOP 50 Index is highly correlated with the trend following Indexes of the SG Trend Index and the TTU TF Index, however its long-term performance is the lowest of the 3 Trend Following Indexes. While there is a significant representation of Trend Following Programs within the Index, the non-trend following Programs contribute to this diluted long-term performance.

TTU TF Index

The TTU TF Index has been developed by Top Traders Unplugged to provide a performance measure of the trend-following programs with a long-term track record.

At TTU, we recognize the importance of a robust trading approach to these uncertain markets and feel that AUM is not a good robustness measure when it comes to assessing performance of the trend-following industry. It is our strong opinion that the ultimate selection measure to apply in constituting a Trend Following Index is not AUM or a proxy risk metric such as the Sharpe, Sortino, MAR ratio, Ulcer Index or Serenity ratio. The superior metric to assess long-term performance is the long-term validated track record itself.

We have therefore developed a different method for constructing our TTU TF Index.

The criteria for inclusion into the TTU TF Index are as follows:

  • Monthly performance results need to be captured in the Nilsson Hedge CTA database;
  • Must be geographically diversified across asset classes;
  • Must be fully systematic in nature using quantitative rules for entry and exit;
  • Must possess at least a 15-year unbroken track record to the current reporting month;
  • Must adopt trend following as their dominant investment strategy;
  • Are currently active programs; and
  • Must report performance monthly (net of fees).

The Index:

  • Is Equally weighted;
  • Is Rebalanced monthly;
  • Is Reconstituted monthly;
  • Has an inception date of 1st January 2000

As of 30 September 2026, the TTU Trend Following Index is composed of 52 active programs, each with a long-term, fully verified performance record. The roster is unchanged from the close of August, when it rose by one from 51. That addition was the first increase since the reconstitution that trimmed the index from 54 in May. The reconstitution interrupted a steady expansion from 43 programs at the close of 2025 through 47 in January, 49 in February, 51 in April and 54 in May. The count then held at 51 through June and July before August’s addition. The construction methodology is unchanged, continuing to require a fully verified 15-year track record. The composite retains the broad, long-tenured cross-section of systematic trend-following behaviour that defines it, with nine more programs than it carried at the close of 2025. The monthly index return reflects the equal-weighted average performance of all programs reporting for the period.

For September, 45 of the 52 programs submitted performance data by the reporting cut-off, with seven programs yet to report as highlighted in the table below. Three of the seven, Finaltis, Purple Valley Capital and Seven Capital Management, were also outstanding at the August cut-off. The other four, Eckhardt Trading Company, QQFund.com, Salus Alpha Capital and Winton Capital Management, were not outstanding in August. Coverage has slipped from August, when 48 of 52 programs had reported, and sits below the 49 recorded in each of May and June. It remains ahead of July, when 42 of 51 had reported. With seven programs outstanding against four a month earlier, the September equal-weighted return is drawn from a narrower base than August’s, and it is more likely to be revised as the remaining programs report.

Table 2: Programs highlighted in yellow in the Table above have not currently reported for the month.

The performance of the TTU TF Index from 1st January 2000 to the end of last month is as follows:

Chart 3 – TTU TF Index Performance

Now you might be intrigued by the performance result of the TTU TF Index. While it is highly correlated with the BTOP 50 Index and the SG Trend Index, we can see that long term performance of the TTU TF Index clearly outstrips alternative Index measures.

We believe the main contributor to this outperformance is the requirement for any participating Program in the Index to have a long-term track record. Using AUM as a criterion for inclusion is not necessarily a useful selection criterion. While AUM reflects ‘market appeal’, it does not imply that this ‘market appeal’ is strongly correlated with ‘long term performance’.

Our process of Index construction also gives us an insight into how a diversified ensemble of trend following Programs with a long-term track record behaves as we increase the number of Programs in the Index. Historically, diversifying into a larger ensemble of Trend Following Programs with a long-term track record has improved the Index result, with a higher CAGR and shallower drawdowns.

This is the same diversification principle trend followers apply within their own programs. Greater diversification has historically improved both the maximum drawdown and the CAGR of an ensemble, which is why we seek maximum market and system diversification within individual programs. The TTU TF Index takes this diversification one step further and diversifies across many different TF Programs, with the aim of delivering a stronger return and drawdown profile.

TTU TF Index Performance

The TTU Trend Following Index, composed exclusively of long-tenured systematic trend programs, gained 3.77 percent in September, a second consecutive positive month. It finished second among the three trend benchmarks, 49 basis points behind the SG Trend Index at 4.26 percent and 74 ahead of the BTOP50 at 3.03 percent. In August it had led the three trend benchmarks. Over the trailing twelve months the index stands at 20.08 percent, down from 22.23 percent in August, because the September 2026 gain replaced a stronger September 2025 result in the rolling window. August’s return has been revised to 3.86 percent from the provisional 3.63 percent, which moves the year-to-date figure through August to 10.01 percent. From that revised base the year-to-date figure rose to 14.16 percent. The index is now 141 basis points ahead of the S&P 500 Total Return Index on the year, but it still trails the SG Trend Index at 15.80 percent and the BTOP50 at 14.81 percent.

The index’s position in September is consistent with how it is built. It is an equal-weighted average of long-tenured programs, so no single manager dominates the result. In July its full commitment to trend following made it the benchmark most exposed to the trends that broke. In August the same commitment left it best placed among the three to benefit from the trends that held. In September it gained more than the broader BTOP50 but less than the SG Trend Index, whose ten large managers finished 49 basis points ahead. The September figure is also provisional. It is drawn from 45 of 52 programs, and the last two months show that late reporters can move the result in either direction. July was revised down by 35 basis points and August up by 23.

The long-term profile of the TTU TF Index improved again on the month. Since its inception in 2000, the index has delivered a CAGR of 7.76 percent with a maximum drawdown of 20.72 percent. The CAGR rose from 7.62 percent at the close of August, its second consecutive monthly improvement, as another gain well above the long-term compounding rate lifted the figure. The maximum drawdown was unchanged for a fourth consecutive month. August and September together have more than recovered the 3.78 percent the index lost across June and July. We attribute these characteristics to the construction methodology, which prioritises the durability of verified track records over scale, popularity, or short-term risk statistics.

The TTU TF Index remains closely aligned with the institutional trend benchmarks, with correlations of 0.95 to the SG Trend Index and 0.93 to BTOP50. The important difference is in the long-run outcome. Its track-record-based construction has produced the strongest compound return of the three while retaining the broad behavioural signature of systematic trend following. The roster stands at 52 programs, unchanged on the month and nine more than at the end of 2025, with 45 reporting for September. Across the last three months the index has moved from the weakest of the three benchmarks to the strongest and then to second. The 20.08 percent trailing twelve-month return is more useful context than any single month’s ranking.

For comparison, the S&P 500 Total Return Index lost 0.35 percent in September and returned 15.74 percent over the trailing twelve months. Since 2000 it has compounded at 8.23 percent, but its maximum drawdown of 50.95 percent is far deeper than that of the trend benchmarks. In June equities and the TTU TF Index fell together. In July equities finished almost unchanged while trend following eased, and in August both rose. In September the two moved apart, with the TTU TF Index ahead by 412 basis points. Four months have produced four different relationships, consistent with a long-run correlation between the two indices of minus 0.09. Their return engines are different, and that independence is what allows trend following to play such a useful role inside a broader portfolio.

Chart 4 – S&P500TR Index Performance

TTU Trend Barometer

The TTU Trend Barometer closed September at 52, inside the Neutral band and three points below the boundary with a favourable regime. That is three points lower than August’s closing reading of 55 and 22 points above July’s low of 30. August rose in every week. September did not repeat that: the reading held, rose four points, fell 14 and recovered seven. In the second week it moved into the favourable band for the first time since the late July low, reaching 59. It gave back that gain and more the following week, falling to 45, then recovered half the fall by the last full weekly close, on 25 September. The reading held at 52 through the week that straddled the month end.

The Barometer measures the persistence of price trends across 44 global futures markets. The breadth figures quoted in this section come from the separate 49-contract weekly market review, so they describe a related but not identical universe. The first week left the reading at 55, its first week without a rise since the late July low, although the 10-day rate of change strengthened to “Rising Moderately” from “Rising Weakly.” Breadth barely moved, from 21 to 24 contracts higher, but the average move across the board rose more than fivefold, from 0.43 to 2.24 percent. Persistence strengthened in Energy, Bonds and Metals and weakened in Grains, the currency basket and the equity indices, and the reading held.

The second week added four points to 59, the highest reading since the late July low, in the week the fewest markets rose. Only 14 of 49 contracts finished higher, while the average move held at 2.16 percent. That combination is consistent with many of the 35 declines running in the direction of trends already in place. Sixteen contracts across Bonds, Metals and the equity indices moved as blocs, the most coherent configuration of the month, while the petroleum complex extended its advance. A count of markets rising said little about the trend environment that week.

The third week produced the largest fall of the month, 14 points to 45, with the rate of change at “Falling Moderately.” Breadth improved to 18 contracts higher, but the blocs of the previous week broke up, and only nine contracts, in Soft Commodities and Meats, moved in a single direction. Six of the ten largest moves on the board ran against the prevailing trend in their market. The week to 25 September recovered seven points to 52, with the rate of change at “Neutral.” Most of the previous week’s interruptions reversed, as the precious metals and Bonds resumed their declines and several Grains contracts reached new highs. Energy was the main exception, with Heating Oil down 7.72 percent from the highest level on its chart.

Read as a sequence, 55, 59, 45 and 52 is less orderly than August. Breadth moved against the reading in two of the four weeks, and the reading held while breadth edged up in the first. Contracts higher ran 24, 14, 18 and 24. The Barometer rose to its peak as breadth narrowed, fell sharply as breadth recovered, and only in the final week moved with it. The month also showed the Barometer and realised CTA returns moving closer together. In August the returns lagged the reading on the way up. In September the SG Trend Index added 0.59 percentage points in the week the reading held and 2.20 in the week it rose four points. It added only 0.44 when the reading fell 14 points and 1.24 when it recovered seven. The Barometer counts persistence without asking which way it runs. September’s best week came when much of that persistence was falling in markets where trend followers were likely to be short. The Barometer enters October at 52, 12 points above the Neutral floor and three below the favourable boundary, with its 10-day rate of change at “Neutral.” Level and momentum are both mixed after a month that touched 59 and 45. The clearest trends are in Bonds, where all four maturities sit at the lowest levels on their charts, and in the precious metals, which have resumed the declines running since February. Grains have several contracts at or near chart highs, the Nasdaq 100 is at a new high and the US Dollar Index is close to the top of its range. The picture elsewhere is less settled. The petroleum contracts have pulled back sharply from the highs they reached mid-month, while Orange Juice, Natural Gas and the cattle contracts produced large gains inside declines that remain intact. Copper is holding near its high as the other metals fall, and Bitcoin remains inside the decline from above 120,000.

Chart 5 – TTU Trend Barometer

The Trend Barometer is a proprietary tool we use at TTU to assess the trend strength of a diversified portfolio consisting of 44 markets across all sectors. We firstly subdivide the trend strength of each market of a hypothetical diverse portfolio into five ranges from strong up, medium up, neutral, medium down and strong down. We then aggregate these results into a single portfolio number which we use to describe the overall trend strength across a hypothetical Program portfolio.

We then arbitrarily divide this percentage range into 3 where a value of 0-30 is considered a very unfavourable market regime for trend following programs, a range between 30 to 55 is a somewhat neutral environment for Trend Following Programs (but not an environment where you could expect consistent performance) and values more than 55 are considered to be a favourable regime for trend following programs, where they should see good performance.

Aside from the occasional dispersed readings when compared to overall trend following performance, this method is surprisingly powerful in describing CTA monthly performance and can be used to connect market trading environments to resultant manager performance.

The Macro Environment

For a blow-by-blow macro wrap for the month, we recommend you listen to our weekly systematic investor series by clicking on the links below. It is also worthwhile listening to our past catalogue, as it provides you with an understanding of how these markets can shape the emotions of a trader and why it is therefore essential that trend followers adopt systematic rules-based processes to keep these emotions in check.

You can find all of our weekly conversations by clicking this link.

Top 10 Lists

We have prepared the following Top 10 lists (excluding non-reporting programs) for various performance categories based on monthly performance returns for a 15-year period commencing 1st January 2011 to the current month.

Top 10 Listing – by Compound Annual Growth Rate

Table 3: Top 10 based on CAGR
Chart 6 – Top 10 Program Performance by Compound Annual Growth Rate

Top 10 Listing – by Risk-Adjusted Return (Serenity Ratio)

Table 4: Top 10 based on Serenity Ratio
Chart 7 – Top 10 Program Performance by Serenity Ratio

Top 10 Listing – by Last 12 months Performance

Table 5: Top 10 based on Last 12 Months Performance
Chart 8 – Top 10 Program Performance by Last 12 Months Performance

Performance Results for the TTU Top 5 by Serenity Ratio

In a research project we undertook at TTU, we examined three different allocation methods that could be deployed by an investor seeking to optimally allocate investment funds towards 5 of the top-ranked Globally Diversified Systematic Trend Following Programs with a long-term track record.

These three methods adopted 3 different forms of performance metric, namely:

  1. Top 5 performers by Compound Annual Growth Rate (CAGR) using a rolling lookback of 15 years.
  2. Top 5 performers by MAR ratio (CAGR/Max Draw%) using a rolling lookback of 15 years.
  3. Top 5 performers by Serenity Ratio using a rolling lookback of 15 years.

The findings of our project can be obtained by clicking on this link.

Our research determined that the optimal selection method was the Serenity Ratio method.

The Serenity Top 5 Selection Method gained 1.21 percent in September, a second consecutive positive month. It was the weakest result among the trend composites covered in this report. It finished 182 basis points behind the BTOP50 at 3.03 percent, 256 behind the TTU TF Index at 3.77 percent and 305 behind the SG Trend Index at 4.26 percent. In August the concentrated composite had finished well above the range of the broad trend benchmarks. In September it finished below that range, although still 156 basis points ahead of the S&P 500 Total Return Index. The trailing twelve-month return eased to 34.07 percent from 40.19 percent, as a much stronger September 2025 result left the rolling window. The year-to-date result rose to 21.64 percent, which remains the highest of the composites in this report and 584 basis points ahead of the SG Trend Index. All five constituents reported for September, so this month’s composite is struck on the full selection.

September tested the composite differently from August. A concentrated composite has less breadth to dilute its exposure than the 52-program TTU index, so its result depends heavily on how five programs were positioned in the markets that moved. In August that concentration worked in its favour. In September the composite gained less from the month’s trends than the broad benchmarks did. The interruptions of the third week and the reversal in the petroleum contracts in the last full week are plausible sources of the shortfall. The benchmark data alone cannot say which constituents bore the cost. A single month of underperformance after a 5.62 percent gain in August is within the range this composite has shown through 2026.

The 2026 Serenity selection retains the same five programs as 2025, with the revised ranking applying from 1 February 2026 to 31 January 2027. That continuity is consistent with the durability of the managers across the full 15-year evaluation window. Mulvaney Capital Management’s Global Diversified Program is known for a high-convexity profile that responds to persistent, expanding trends rather than to any preferred direction, which means it can amplify both gains and give-backs. A month in which the strongest trends were interrupted midway and a leading sector reversed late may have been less suited to that profile than August was. That variability is part of the asymmetry the selection is designed to retain.

The Serenity Ratio remains useful because it rewards durability, compounding and drawdown control across a long evaluation window rather than chasing recent returns. Across the full reporting history of 26.77 years, the Serenity composite has produced a CAGR of 5.82 percent with a maximum drawdown of 26.82 percent and a Serenity Ratio of 0.48. Its correlation is minus 0.02 to the S&P 500 Total Return Index and 0.81 to the TTU TF Index. The CAGR rose from 5.79 percent in August and the Serenity Ratio from 0.47, while the historical maximum drawdown was unchanged. September added a fifth version of the diversification relationship in five months. May saw opposite directions, June saw both negative, and July saw trend following down modestly against an almost flat equity market. In August both rose. In September the two moved in opposite directions again, with the composite gaining 1.21 percent while the S&P 500 lost 0.35 percent. The long-run near-zero equity correlation describes the relationship, and any single month can show any of these combinations.

Chart 9 – Performance Results of the Top 5 Allocation Method (Serenity Ratio)

The 2026 Serenity selection is as follows and will be maintained for the investment period between 1st February 2026 to 31st January 2027:

  • Man AHL: AHL Evolution;
  • Man AHL: AHL Alpha;
  • Quantica Capital AG: Managed Futures Program;
  • Mulvaney Capital Management: Global Diversified Program; and
  • Man AHL: AHL Dimension.

Individual Performance Results for the 5 Programs used for the Serenity allocation to the reporting month using the 2026 listing are as follows:

Chart 10 – Performance Results MAN AHL: AHL Evolution
Chart 11 – Performance Results MAN AHL: AHL Alpha
Chart 12 – Performance Results Quantica Capital AG: Managed Futures Program
Chart 13 – Performance Results Mulvaney Capital Management: Global Diversified Program
Chart 14 – Performance Results Man AHL: AHL Dimension

Performance Results for the Alternative 60/40 portfolio using the TTU Top 5 by Serenity Ratio

In our “How to Invest with the Best”blog post, we also highlighted the significant improved risk-adjusted performance results that could be achieved by replacing the 40% allocation to Bonds in the traditional 60/40 portfolio with an allocation of 40% towards the TTU Top 5 by Serenity ratio.

The evaluation compared the performance of a traditional 60% Equity/40% Bond portfolio against a 60% Equity/40% Serenity portfolio to highlight the uncorrelated historical nature of this Alternative 60/40 portfolio and demonstrate the benefits that a sizeable allocation towards the Serenity portfolio would bring to an investor if equity and bond markets go back to their historic relationship and become more positively correlated in the future. There is no guarantee that correlations remain static over time and it is possible that bond markets and equity markets may lose their uncorrelated relationship that has existed in the last 20 years or so. It is far less likely that the TF managers within the Serenity Grouping will ever be strongly positively correlated to the Equities market, over the long run, given the extensive global diversification and ability to go long and short, that is present within the constituents of the Serenity Grouping.

Chart 21 below showcases the comparative performance results for the period 1 January 2000 to the end of last month:

  1. A 100% investment in the S&P500TR portfolio;
  2. A 100% investment in the VBMFX which is a proxy for the bond market;
  3. A 100% investment in the VBIAX which is a suitable proxy for the classic 60% Equity/40% Bond portfolio;
  4. A 100% investment in a 60% S&P500TR 40% Serenity portfolio; and
  5. A 100% investment in the Serenity Portfolio.
Chart 15 – Comparative Performance Results of Various Portfolio Allocations

The comparison above shows the historical behaviour of the alternative allocations, including the 60 percent S&P 500 Total Return / 40 percent Serenity composite. The relevant observation is not simply the return number. It is the combination of compounding, drawdown and a return stream whose long-run drivers have been materially different from equities.

Chart 16 looks more closely at the historical performance of that alternative 60/40 construction.

Chart 16 – Performance Results for the 60% S&P500TR/ 40% Serenity Composite

Important Disclaimers

This document is directly solely to Accredited Investors, Qualified Eligible Participants, Qualified Clients and Qualified Purchasers. No investment decision should be made until prospective investors have read the detailed information in the fund offering documents of any manager mentioned in this document. This document is furnished on a confidential basis only for the use of the recipient and only for discussion purposes and is subject to amendment This document is neither advice nor a recommendation to enter into any transaction. This document is not an offer to buy or sell, nor a solicitation of an offer to buy or sell, any security or other financial instrument. This presentation is based on information obtained from sources that TopTradersUnplugged (“TTU”) (“considers to be reliable however, TTU makes no representation as to, and accepts no responsibility or liability for, the accuracy or completeness of the information. TTU has not independently verified third party manager or benchmark information, does not represent it as accurate, true or complete, makes no warranty, express or implied regarding it and shall not be liable for any losses, damages, costs or expenses relating to its adequacy, accuracy, truth, completeness or use.

All projections, valuations, and statistical analyses are provided to assist the recipient in the evaluation of the matters described herein. Such projections, valuations and analyses may be based on subjective assessments and assumptions and may use one among many alternative methodologies that produce different results accordingly, such projections, valuations and statistical analyses should not be viewed as facts and should not be relied upon as an accurate prediction of future events. There is no guarantee that any targeted performance will be achieved Commodity trading involves substantial risk of loss and may not be suitable for everyone

TTU is not and does not purport to be an advisor as to legal, taxation, accounting, financial or regulatory matters in any jurisdiction. The recipient should independently evaluate and judge the matters referred to herein. TTU does not provide advice or recommendations regarding an investor’s decision to allocate to funds or accounts managed by any manager (“or to maintain or sell investments in funds or accounts managed by any manager, and no fiduciary relationship under ERISA is created by the investor investing in funds or accounts managed by any manager, or through any communication between TTU and the investor

In reviewing this document, it should be understood that the past performance results of any asset class, or any investment or trading program set forth herein, are not necessarily indicative of any future results that may be achieved in connection with any transaction. Any persons subscribing for an investment must be able to bear the risks involved and must meet the suitability requirements relating to such investment. Some or all alternative investment programs discussed herein may not be suitable for certain investors This document is directed only to persons having professional experience in matters relating to investments. Any investment or investment activity to which this document relates is available only to such investment professionals. Persons who do not have professional experience in matters relating to investments should not rely upon this document.

This document and its contents are proprietary information of TTU and may not be reproduced or otherwise disseminated in whole or in part without TTU’s prior written consent.

This document contains simulated or hypothetical performance results that have certain inherent limitations AND SHOULD BE VIEWED FOR ILLUSTRATIVE PURPOSES. Unlike the results shown in an actual performance record, these results do not represent actual trading. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR INVESTMENT ACCOUNT.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM OR OTHER ASSET.

There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. No representation is being made that any investment will or is likely to achieve profits or losses similar to those being shown.

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Debt has had a bad reputation for a long time, globally, since nearly every major religion has condemned lending at interest, and politicians still reach for the word “debt” when they want to frighten voters. But the history of the bond market tells a different story. Again and again, the nations that learned to borrow well became the nations that won wars, grew thriving cities, and set the rules for everyone else.

Financial journalist Robin Wigglesworth traces this arc in his new book, A Fabulous Debt: The Epic Story of How Bonds Built the Modern World. What stands out is how little of it was planned. The bond market grew out of emergencies, accidents, and a few people who saw something others missed. The lessons it leaves behind have less to do with interest rates than with trust, structure, and the way markets change once people start paying attention to them.

How a Failed Revenge Mission Against Constantinople Created the First Tradable Bond

In the 12th century, Venice was rich, but its government was small. Its loyalty to commerce above all else made it wealthy and irritated its neighbors and, eventually, the Byzantine Empire, its nominal overlord, lost patience and arrested thousands of Venetians in a single coordinated raid.

Venice wanted revenge and needed a fleet to get it, which meant far more money than a few bankers could lend. So the republic assessed each citizen’s wealth and made each one pay a forced loan in proportion to it. To soften the blow, the state promised 5% a year until it could repay, and it let people trade the receipts.

The expedition was a disaster: Plague struck the fleet, which came home in disgrace and brought the disease with it. The Doge who had led the effort was killed in the streets by an angry crowd. Venice couldn’t repay the loan, so the loan became permanent.

That turned out to be the lucky part. Venetians now owned a fixed income stream they could sell at the Rialto, give as a dowry, or pledge as collateral for trade. Because bondholders were citizens, they also had a direct stake in how the republic was run, and Venice began publishing its state finances at a time when almost no one did. A humiliating military failure had produced one of the more useful financial tools ever invented, and a more accountable government along with it.

The Monte of 1262 and Britain’s Consols: Why One Mountain of Debt Beats Many Hills

Around 1262, Venice folded its scattered loans into a single pool of state debt known as the Monte, or mountain. The name sounds ominous, yet it made the debt far more valuable. When every bond is identical, buyers don’t have to weigh one issue against another, and trading becomes simple. Tradable, uniform, fixed rate: the outline of the modern government bond was already visible, and other Italian city-states copied it.

Britain arrived at the same answer centuries later with consolidated annuities, better known as consols. Many small, confusing issues became one deep market. Consols paid a fixed coupon, and their price did the adjusting, slipping toward 90 when investors worried and rising above par when they felt good about Britain. Simplicity is a form of liquidity, and liquidity is a form of trust.

Why Dutch Savers Lent to Parliament, and What Rothschild Demanded of Prussia

Lending to a king was always risky. A king who didn’t want to pay could refuse, or do something worse to the lender. After the Glorious Revolution, borrowing in England shifted from the crown to Parliament, and investors were now lending to a country with published accounts and real checks on its ruler. Dutch merchants, the great savers of the age, said plainly that this was why they bought English debt.

The result was a feedback loop, as Britain could borrow more cheaply than its rivals, which let it outlast a far larger France during the Napoleonic Wars. Victory made its bonds safer, and cheaper borrowing made the country stronger still.

Other states noticed, such as when Prussia wanted to borrow in London after Napoleon’s defeat, Nathan Mayer Rothschild told its finance minister to issue in pounds, publish the kingdom’s finances, and restrain its king. Prussia largely went along. Bond investors had no plan to spread democracy, they simply paid better prices for it, and that was hard for any government to ignore.

Soviet Dollars, Regulation Q, and the Accidental Birth of the Eurobond Market

After World War II, dollars spread across the world through the Marshall Plan and American trade. Some of the holders were unlikely. Communist banks needed dollars for trade but didn’t want to keep them in the United States, so they parked them in Europe. A Paris bank holding Soviet dollars used the telegraph address “Eurobank,” and the name stuck to offshore dollars everywhere.

American rules pushed even more money abroad. Regulation Q capped the interest US banks could pay, a sensible Depression-era idea that grew more perverse each year, and savers could earn more on a dollar deposit in London than in New York. Bankers in London then noticed something absurd: European companies were going to America to borrow from European investors.

So they used the offshore dollar pool to build the eurobond market, which revived London as a financial center long before the reforms of the 1980s. Today it’s a stateless market worth tens of trillions of dollars. A rule meant to keep money at home ended up building a market beyond any one country’s control.

What Michael Milken Saw in Braddock Hickman’s Default Study

As a student at Berkeley, Michael Milken found a dense study by W. Braddock Hickman on corporate bond defaults. Hickman showed that low-rated bonds defaulted more often, as expected, but paid so much more that a diversified basket of them beat safer bonds. Plenty of people could have read that and simply bought junk bonds.

Milken built an industry instead. At Drexel Burnham Lambert, he created a market for newly issued junk bonds, seeded the funds that bought them, and laid the groundwork for today’s leveraged finance and private credit.

Then the edge shrank, because he had changed the thing he studied. Hickman’s data came mostly from fallen angels, solid companies that had slipped. Milken’s machine opened the door to companies that would once have been shut out, some of them rightly, and later vintages defaulted in large numbers. A premium still exists in high yield, but it has never been as large as it looked in Hickman’s data. Run the same experiment in a lab a hundred times, and you get the same result. Publish a profitable pattern in markets, and people will trade it away.

The Bond ETF Was Supposed to Cause a Crisis and Improved Liquidity Instead

For years, a common worry held that bond ETFs would end badly, since wrapping hard-to-trade bonds in a fund that trades every second looked like a mismatch waiting for a crisis.

Wigglesworth, who wrote a book on the rise of index funds, shared that concern and has since changed his mind. The ETF’s creation and redemption process may suit less liquid markets well, and it has accelerated electronic trading and portfolio trading, where hundreds or thousands of bonds change hands at once. More liquidity brings more trading, and more trading narrows spreads. There are side effects, since bonds that don’t fit a major index can end up neglected, and tokenization, already growing in repo, may bring the next shift. Each of these repeats the story Venice started: change the structure of the debt, and you change what the debt can do.

Credibility Compounds and Every Edge Decays

Borrowing is a weakness only when lenders doubt you. Venice, the Dutch Republic, and Britain each turned debt into power because they paid, published their accounts, and gave creditors good reason to believe they would keep paying. Credibility is the asset, and everything else is paperwork.

The other lesson runs the opposite direction. Any edge that becomes widely known starts shrinking the moment people act on it. Markets are made of people, and people adapt. That was true on the Rialto 800 years ago, and it remains true today whenever a bond market starts to wonder whether a borrower means what it says.

DISCLAIMER: This article is based on a conversation from Top Traders Unplugged and reflects themes, ideas, and perspectives discussed during the episode. The views expressed are those of the guest and participants in the conversation and should not be interpreted as investment advice or as the official views of Top Traders Unplugged.

To receive future episodes, research, and weekly insights from the world of investing, macro, and trend following, sign up for our newsletter or subscribe on your preferred podcast platform.

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“Oil Climbed, Gas Collapsed. Trend Strength Rose to 41%.”

This Week in Trend – 23 October 2026

Welcome to This Week in Trend, our weekly examination of the evolving structure of global futures markets and what that structure means for systematic trend followers. This edition covers market conditions through the US close on Friday, 23 October 2026. Market returns, the SG Trend Index and the TTU Trend Barometer reading are all as at that close.

This was a week in which trend strength rose while the board narrowed. The TTU Trend Barometer rose 5 points to 41%, moving back above the 40% line that separates a cold environment from the Neutral band. Nineteen of 49 contracts finished higher, down from 22 a week ago and 28 the week before, and the SG Trend Index declined for a second week, its year-to-date figure falling from +14.97% to +14.31%. Breadth and returns fell while trend strength rose. Energy carried the week’s sharpest contrast. Crude Oil Brent rose 6.24%, the largest gain on the board, while Natural Gas fell 13.50%, the largest move in either direction, and both ran with the structures beneath them. Bonds, Currencies and Meats were the only three categories in the snapshot to finish higher, and Metals fell 4.27%, the weakest sector after the VIX. Elsewhere, the petroleum advances extended, the declines in the precious metals deepened, and Palladium, Lumber and Lean Hogs moved to new lows. Against that, the leading Grains and most of the equity indices gave more ground from their highs, and Bonds and the cattle contracts rose inside their declines. Persistent declines alongside extending petroleum advances are consistent with a modest improvement in the trend environment, even in a week when fewer markets rose.

Last week’s report closed by asking whether the Barometer would stabilise near 36% or fall toward the late July low of 30%. It did neither, rising 5 points to 41%. Five other questions were left open. Would the pullbacks in the Nasdaq 100 and the Nikkei 225 stop above the levels from which their climbs began? Would Rough Rice keep extending while Oats, Soybean Meal and Canola pulled back? Would WTI and Brent hold the upper parts of their ranges? Would the bounce in Bonds become a higher high or would the declines resume? And would EUR and CHF keep lifting from their lows? The Nasdaq 100 held close to last week’s level while the Nikkei 225 fell further, and both remain well above the levels from which their climbs began. Rough Rice set another high, while Oats, Soybean Meal and Canola fell further from theirs. WTI and Brent rose for a third week, Brent to the top of its range. Bonds rose for a third week, though none of the four charts has set a higher high. EUR and CHF slipped back toward their lows while the Dollar Index held near its high. And the SG Trend Index, which stood at -0.73% for October a week ago, now stands at -1.29% for the month.

Trend Indicators: Barometer Rises to 41%, SG Trend Index Slips Again

The Top Traders Unplugged (TTU) Trend Barometer measures the percentage of markets generating medium-to-strong trends. Below 40% reads as a cold environment for trend-following, above 55% reads as a favourable one, and the band between is neutral.

TTU Trend Barometer: 41%, up from 36% last week. TTU describes overall trend strength as Neutral, up from Moderately Weak, and the reading has moved 1 point into the Neutral band between 40% and 55%, 14 points below the 55% threshold for a favourable environment. The 10-day rate of change still reads Falling Moderately, as it did a week ago, so TTU’s short-term measure has not yet turned with the weekly rise. That is consistent with the reading remaining below the 50% recorded on 9 October, roughly two weeks earlier. The five-week sequence, from 25 September to 23 October, now stands at 52, 52, 50, 36 and 41. The reading is 11 points above the late July low of 30% and 11 points below the 52% at which the sequence begins, and it has recovered 5 of the 14 points lost in last week’s fall. A rise in the reading means the measured prevalence of trends increased. On its own it does not establish that conditions for trend following have turned favourable.

Set against the performance table, the reading and the board pointed in opposite directions. Nineteen of 49 contracts rose, down from 22, and seven of the ten categories in the snapshot fell, against five a week ago, yet the reading rose 5 points. The week was a little quieter than the last. The average move across the board eased from 2.49% to 2.34%, and the spread between best and worst narrowed from 23.73 percentage points to 19.74, with Natural Gas alone accounting for much of that width. Narrower participation alongside a rising reading separates two counts that are easy to conflate: how many markets rose, and how many are trending. The Barometer measures the second, and a market trending lower is part of that count as much as one trending higher.

The Barometer measures the prevalence of medium to strong trends across its market universe. It does not measure the direction or size of individual weekly price changes, so a large weekly move does not necessarily lift the reading. This week the measured proportion of trending markets rose even as fewer contracts finished higher. The ten largest moves on the board illustrate the mix without explaining the reading. Five of them ran with the structures beneath them, the same as a week ago. Crude Oil Brent and Crude Oil WTI rose within their advances, while Natural Gas, Palladium and Silver extended their declines. Four ran against: Feeder Cattle and the 30 Year Bond rose inside their declines, the Russell 2000 lifted inside its pullback from the summer high, and Oats fell further from the high it set two weeks ago. The VIX fell within its range. Further down the table, the counter-trend share remained large.

The sector data is consistent with a trend environment that improved modestly from a low base. Running with their structures, WTI and Brent rose within the advances in the petroleum complex, Heating Oil climbed back toward its high, and Rough Rice moved to another high. Natural Gas, Silver, Platinum and Palladium extended their declines, Gold fell back to the area of its July low, and Palladium, Lumber and Lean Hogs moved to new lows. Corn fell for a fourth week and Wheat for an eighth, and EUR and CHF slipped back toward their lows. Running against them, Oats, Soybean Meal and Canola fell further from the top of their charts, the Nikkei 225, Euro Stoxx 50, the DAX and the Nasdaq 100 gave more ground from their highs, Copper eased for a second week from close to its own, and Sugar and Ethanol pulled back from the highs they set in recent weeks. All four Bonds maturities rose for a third week inside their declines, and both cattle contracts lifted inside theirs. At 41%, the reading sits alongside a board on which the declines kept going while the advances that paused last week, outside the petroleum complex, did not resume.

SG Trend Index: -1.29% month to date for October and +14.31% year to date as of 23 October, on SG’s estimated figure. The year-to-date figure has fallen from +14.97% to +14.31%, a decline of 0.66 percentage points and the index’s second weekly decline in a row, taking it to its lowest weekly reading since 11 September. The month-to-date figure now covers the first seventeen trading days of October. Set against the Barometer, the index fell while the reading rose, after a week in which the two fell together. Over the last five weeks the Barometer has risen 7, held, fallen 2, fallen 14 and risen 5, while the index has added 1.37 percentage points, given back 0.33, added 0.42, given back 1.17 and given back 0.66. This is the second time in five weeks that the two have moved in opposite directions. The Barometer measures how many markets are trending, and the index records what institutional trend-following portfolios earned. A rise in the number of trending markets need not show up in the same week’s returns, since portfolios typically build exposure to newly established trends over time. A further decline alongside a rising reading is consistent with a week in which continued pullbacks in the leading Grains, Copper and the equity indices, together with a third rise in Bonds, carried more weight than the trends that persisted in the petroleum complex, Natural Gas and the precious metals. Across the five weeks the index has given back 0.37 percentage points.

Weekly Asset Class Snapshot

Source: Finviz.com.
Sector averages are simple equal-weighted means of the constituent contracts in each sector.

Equity Indices (-0.81% | prev -2.14%)

Equity Indices fell 0.81% with two of seven contracts higher, a third weekly decline and a smaller one. The Russell 2000 rose 1.79% and the DJIA 0.34%, while the S&P 500 fell 0.58%, the Nasdaq 100 0.93%, the DAX 1.92%, the Nikkei 225 2.01% and Euro Stoxx 50 2.38%. Last week the Nikkei 225 and the US technology and small-cap indices led the decline while Europe steadied. This week Europe and Japan led it, and the US indices were mixed. Euro Stoxx 50 near 6,075 extended its pullback from the August high near 6,600 back to the levels of June, and the DAX near 25,240 gave back last week’s recovery, still inside the range below its late August high. The Nikkei 225 near 62,700 fell further toward the middle of its summer range. The Nasdaq 100 near 29,175 held close to last week’s level after its fall from the high, and the S&P 500 near 7,670 eased again from its own. The Russell 2000 near 2,790 lifted from the lower part of its pullback from the summer high near 3,100, and the DJIA near 52,460 edged higher, still below its August high near 54,000. The advances that have run since the spring remain visible on all seven charts, but none of the seven set a high this week, and the pullback in Europe has now run for two months.

Energy (-0.81% | prev +2.40%)

Energy fell 0.81% with three of six contracts higher, its first weekly decline in three weeks, and one contract decided the result. Crude Oil Brent rose 6.24%, the largest gain on the board, followed by Crude Oil WTI at 4.29% and Heating Oil at 1.74%, while Gasoline RBOB fell 0.74%, Ethanol 2.86% and Natural Gas 13.50%, the largest move on the board in either direction. Without Natural Gas, the sector average would be close to +1.73%. Brent near 117 rose for a third week to the top of the range it has held since the spring, and WTI near 103 climbed further into the upper part of its own. Heating Oil near 5.00 moved back toward its high. Natural Gas near 2.63 gave back the lift of recent weeks and fell to the lower edge of the base it has held since the summer, extending the decline that has run since February. Ethanol near 2.04 eased from the highest level on its chart, and Gasoline RBOB near 3.21 remains inside the range below its spring high. Last week WTI joined Brent and Heating Oil in rising. This week all three rose again while Natural Gas moved sharply the other way, and both the gains and the fall ran with the structures beneath them.

Metals (-4.27% | prev -3.01%)

Metals fell 4.27% with all five contracts lower for a second week, the weakest sector on the board after the VIX and a larger decline than last week’s. Copper fell 1.00%, Gold 4.14%, Platinum 4.33%, Silver 5.86% and Palladium 6.00%, the fourth largest decline on the board. Last week the precious metals resumed their declines and Copper eased. This week the precious metals fell further and faster. Silver near 53.96 extended its fall to the lowest level on its chart since the winter, well below its summer lows near 60. Gold near 4,010 fell back to the area of its July low near 4,000, testing that level for the first time since July. Platinum near 1,556 moved below its summer low, and Palladium near 1,047 set another low. Copper near 6.50 eased for a second week from close to the highest level on its chart, and the advance that has run since last autumn is intact. Four of the five moves ran with the structures beneath them again. For a portfolio maintaining short exposure to the prevailing declines in the precious metals, the larger weekly falls would have contributed positively for a second week, subject to position sizing and execution, while Copper’s second small decline would have been a modest cost to one following an advance that remains in place.

Soft Commodities (-1.14% | prev +0.57%)

Soft Commodities fell 1.14% with two of six contracts higher, giving back last week’s gain and more. Coffee rose 0.61% and Cotton 0.25%, while Cocoa fell 0.94%, Orange Juice 1.22%, Lumber 2.63% and Sugar 2.93%. Coffee near 306 held last week’s rebound and edged higher inside its decline from the July spike, though the decline remains intact. Sugar near 20.26 eased from the high it set last week, its first pullback after three weeks of new highs, and the breakout still stands. Lumber near 518 moved to another low. Orange Juice near 142 eased again, close to the lows of the decline that has run most of the year. Cocoa near 5,560 slipped inside its rebound from the spring, and Cotton near 80 held below its August high. Last week Coffee’s rebound would have worked against a portfolio carrying short exposure in its decline, and Sugar’s climb would have favoured one positioned with it. This week Coffee was close to flat, Sugar’s pullback would have worked against a portfolio following its advance, and the falls in Lumber and Orange Juice would have favoured one positioned with their declines.

Grains (-2.66% | prev -1.77%)

Grains fell 2.66% with one of eight contracts higher, a second weekly decline and a larger one. Rough Rice rose 1.07%, while Soybean Oil fell 0.45%, Soybeans 0.63%, Canola 2.50%, Soybean Meal 3.08%, Corn 3.85%, Wheat 5.37% and Oats 6.47%, the third largest decline on the board. Last week most of the contracts near their highs pulled back. This week they pulled back further. Rough Rice near 18.04 moved to another high, again the one contract to extend. Oats near 372 gave back the rest of its rise to the high set two weeks ago, and more. Soybean Meal near 347 and Canola near 778 fell further from the top of their charts, and Soybeans near 1,270 held in the area below its high. Corn near 456 fell for a fourth week, back toward the level it held before its August gap, and Wheat near 625 fell for an eighth week as it unwinds its August spike. Soybean Oil near 67 eased inside the range below its summer peak. Three of the eight moves ran with the structures beneath them. The advances in Oats, Soybean Meal and Canola have now been interrupted for two weeks, though none has yet fallen below the level from which its latest climb began.

Meats (+0.43% | prev -0.26%)

Meats gained 0.43% with two of three contracts higher. Feeder Cattle rose 2.09%, the third largest gain on the board, and Live Cattle 1.22%, while Lean Hogs fell 2.02%. After a week in which both cattle contracts were close to flat, Feeder Cattle near 345 and Live Cattle near 231 resumed their bounces. Neither chart has yet set a higher high to change the shape of the declines that have run from their spring highs, though both have now recovered part of those falls. Lean Hogs near 65.58 moved to another low, extending the decline from its spring high for a third week. For a portfolio carrying short exposure in the sector, Lean Hogs would have contributed positively again, while the cattle contracts, after a week close to flat, would have been a cost.

Bonds (+0.73% | prev +0.91%)

Bonds gained 0.73% with all four contracts higher, a third weekly gain and a slightly smaller one. The 30 Year Bond rose 1.75%, the 10 Year Note 0.67%, the 5 Year Note 0.40% and the 2 Year Note 0.11%. For a third week the gains grew with maturity, and the long end again did most of the lifting. The 30 Year Bond near 107.13 and the 10 Year Note near 106.13 have recovered a larger share of their autumn falls, and the 5 Year Note near 104.50 and the 2 Year Note near 102.09 lifted further from their lows. Last week this report asked whether the bounce would become a higher high or the declines would resume. Neither has happened yet. The bounce continued, but none of the four charts has set a higher high, and the declines that have run since the winter peaks remain intact on all of them. For a portfolio carrying short exposure across the curve, the week would have been a cost at every maturity for a third week, largest again at the long end.

Currencies (+0.47% | prev +0.24%)

Currencies gained 0.47% with five of eight contracts higher, as the commodity currencies lifted and the dollar held its ground. AUD rose 1.37%, CAD 1.02%, NZD 0.88%, JPY 0.71% and GBP 0.38%, while the US Dollar Index slipped 0.01%, CHF fell 0.20% and EUR 0.39%. The Dollar Index near 101.60 was little changed, holding near the highest level on its chart after last week’s first decline in five weeks. AUD near 0.7028 moved back above 0.70, and its climb from last year’s lows remains the firmest upward structure in the basket. CAD near 0.7156 lifted further from its summer low, and NZD near 0.5707 rose from the bottom of its range. JPY near 0.6401 lifted inside the decline that has run all year, and GBP near 1.3376 rose within the lower part of its range. EUR near 1.1226 and CHF near 1.2192 gave back last week’s lift and slipped back toward their lows. Last week the dollar paused and most of the basket lifted against it. This week the basket split: AUD ran with its climb and EUR and CHF with their declines, while the lifts in CAD, NZD and JPY ran against the structures beneath them.

Volatility, Crypto: The VIX fell 7.37% to near 19.5, the second largest move on the board, easing back from last week’s lift while remaining near the middle of its range for the year, well below its spring spike near 30. Market pricing reflected a week in which the European and Japanese indices fell while the Russell 2000 rose and all four Bonds maturities extended their gains. Bitcoin fell 1.33% to near 80,700, a third weekly decline. The rebound from the summer lows near 60,000 remains stalled below 90,000, and the decline from above 120,000 is still the dominant feature of its chart.

Top Movers

Source: Finviz.com.
Top five up and top five down by single-week percentage move.

The two halves of the table are uneven again this week, and for the first time in three weeks the declines are the larger half, though one move accounts for most of the difference. The five largest gains range from 6.24% to 1.75%, and the five largest declines from 13.50% to 5.86%. The gainers come from four sectors. Brent and WTI rose within the advances in the petroleum complex, while Feeder Cattle and the 30 Year Bond rose inside their declines and the Russell 2000 lifted inside its pullback. The losers also come from four sectors. Natural Gas, Palladium and Silver extended their declines, Oats fell further from its high, and the VIX fell within its range. Across the ten largest moves on the board, five ran with the structures beneath them, the same as a week ago. The proportion held, and the largest move on each side came from an established trend. Both observations are consistent with an environment in which trends persisted, though a sample of ten moves cannot establish the Barometer’s precise reading or account for its 5 point rise.

Portfolio View

For a portfolio positioned with the prevailing trends, the persistent declines in Natural Gas, the precious metals and several agricultural markets offered potential gains on the short side, while the advances in the petroleum complex and Rough Rice remained favourable to long exposure aligned with them. The Barometer rose to 41%, just inside the Neutral band, and the SG Trend Index gave back 0.66 percentage points to +14.31% year to date. Brent, WTI and Heating Oil rose within their advances, and Rough Rice moved to another high. On the short side, Natural Gas, Silver, Platinum and Gold extended their declines, Palladium, Lumber and Lean Hogs fell to new lows, and Corn and Wheat fell again. The further pullbacks in Oats, Soybean Meal, Canola, Sugar, Copper and the European and Japanese indices would have worked against positions following their advances, as would the rises in Bonds, the cattle contracts, CAD and JPY for positions following the prevailing declines. The net result would have depended on each portfolio’s positions, sizing and execution, which a week of prices does not reveal. The week was directional in the petroleum complex, Natural Gas and the precious metals, while established advances stayed interrupted in the leading Grains, Copper and the equity indices, and established declines were interrupted in Bonds and the cattle contracts.

Final Reflections

After a week in which breadth and trend strength fell together, this week they moved apart. Contracts finishing higher fell from 22 to 19 while the Barometer rose from 36% to 41%, and the SG Trend Index gave back a further 0.66 percentage points, its year-to-date figure falling to its lowest weekly reading since 11 September. Two of the three measures this report tracks fell and the third rose. The moves were a little smaller, and the largest of them on each side of the table ran with the structures beneath them.

Energy made the point most plainly. Brent rose 6.24% and Natural Gas fell 13.50% in the same sector in the same week, and the sector average of -0.81% describes neither move. Both ran with the structures beneath them, Brent within the advance it has held since the spring and Natural Gas within the decline running since February. Metals showed the same persistence in one direction, with all five contracts lower for a second week and the precious metals falling further. The leading Grains showed the other side, with Oats, Soybean Meal and Canola pulling back for a second week from the highs that had carried the complex.

1. Fewer markets rose, and more were trending. Breadth and trend strength measure different things, and this week they moved apart.

The five-week sequence now reads 52, 52, 50, 36 and 41. The Barometer has recovered 5 of the 14 points lost last week and sits 1 point inside the Neutral band, while the SG Trend Index has given back 0.37 percentage points across the same five weeks. Persistent declines were prominent across Natural Gas, the precious metals, Lumber, Lean Hogs, Corn and Wheat, while the petroleum complex and Rough Rice provided the main examples of continuing advances. Several of the year’s leading advances, across the equity indices, the leading Grains and Copper, remained interrupted. The Barometer nevertheless rose to 41%.

2. The return figure fell while the Barometer rose. The index’s decline is consistent with the cost of interrupted advances outweighing the trends that persisted.

Five of the ten largest moves ran with the structures beneath them. Brent and WTI extended their advances, while Natural Gas, Palladium and Silver continued their declines. For a trend-following portfolio, persistent movement in the direction of its positions creates opportunities for gains, while reversals can impose losses. The eventual contribution depends on exposure, position sizing and execution. The index’s 0.66 percentage point decline is consistent with a week in which the further pullbacks in the leading Grains, Copper and the equity indices, and the third rise in Bonds, outweighed the advances in the petroleum complex and the declines in Natural Gas and the precious metals. Without the index’s positions and contributions, the precise sources of the decline cannot be established.

This week was a reminder that the direction of a move and its value to a trend follower are separate measurements. Brent rose 6.24%, a move that would have paid a portfolio following its advance, while Feeder Cattle rose 2.09%, a move that would have charged one carrying short exposure in its decline. Natural Gas fell 13.50% and would have paid a portfolio positioned with its decline, while Oats fell 6.47% and would have charged one following its advance. Rising markets are not good markets for a portfolio positioned against them, and falling markets are not bad ones for a portfolio positioned to fall with them. What matters each week is whether a market moved with the structure a portfolio was following.

The week ahead is therefore about whether the Barometer can hold above the 40% line or slips back into a cold environment, and whether the 10-day rate of change turns with it. Grains are the sector to follow: Rough Rice is at another high while Oats, Soybean Meal and Canola have pulled back for two weeks, and whether those pullbacks stop above the levels from which their climbs began will shape the complex. Brent has reached the top of its range and WTI sits in the upper part of its own. Gold has fallen back to its July low near 4,000, and whether that level holds matters for the whole precious metals complex. Bonds have bounced for three weeks without a higher high. And October enters its final week with the SG Trend Index at -1.29% for the month. In each case the question is the same one it always is: does the structure persist? For trend followers, up or down was never the central question. Persistence was. The opportunity was directional, but not directionally biased.

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There’s a belief that artificial intelligence will make workers far more productive. That more output from the same inputs will push inflation down, and central banks will likely cut rates. It’s a tidy chain of logic which comes with a historical anchor people love to cite: the 1990s, when Alan Greenspan supposedly saw the productivity boom coming and let the economy run.

One issue is that the history points the other way. Matt Klein, who writes The Overshoot and has spent a lot of time with the Greenspan-era Fed transcripts, makes the case this way: If you rerun the 1990s tape, the lesson is higher real interest rates. That matters for anyone holding bonds, pricing equities, or trying to guess where the Fed goes next.

Greenspan Saw the Boom About a Year Before the Data 

The legend of Greenspan the visionary is a little generous. Computers and the early internet were visible everywhere by 1995, but the productivity statistics didn’t start accelerating until 1997. Greenspan began making his argument in the middle of 1996. He was ahead of the official numbers, just not by much.

Compare that with today, as there’s no meaningful productivity acceleration in the data yet. Every forecast of an AI-driven surge, however plausible, is still a forecast. That simply means anyone pricing it in now is further out on a limb than Greenspan ever was.

What Rates Did When Productivity Took Off in the Late 1990s

Three details from that decade tend to get lost. The first is the starting point. Interest rates before the boom were substantially higher than they are today, even though inflation was running lower. Nominal growth was about the same, because real growth was stronger.

The second is what happened next: Once productivity picked up, real interest rates rose. The measurement is fuzzy, since inflation-protected Treasuries were brand new, but the direction seems clear, and there’s a reasonable argument they didn’t rise enough. That’s what theory would predict. When a technology suddenly makes many investments more attractive, demand for capital climbs, expected returns climb, and the price of money should follow.

The third is that inflation didn’t fall much because of productivity. The 1990s boom showed up mostly as faster growth. Whatever disinflation the decade enjoyed came from other places: commodity prices collapsing during emerging market crises, Japan sinking through its post-bubble slump, and a rising dollar cheapening imports. None of that had anything to do with computers.

Today, several forces run in the opposite direction. Since COVID and the wars in Ukraine and Iran, countries have been stockpiling physical goods and building up domestic productive capacity. That leans inflationary, or at least reverses the tailwind of the 1990s, so even a perfect repeat of the productivity story wouldn’t bring a perfect repeat of the inflation story.

From Electric Motors to Driverless Cars, Diffusion Takes Time

New technologies take a long time to reach the productivity numbers. Electricity is the classic example, as factories had electric motors for decades before managers figured out how to redesign their processes around them.

AI may move faster, but there are bottlenecks as long as people are the ones deciding how to adopt it. Software engineers were early adopters because the tools are good at writing code. Whether that gain has more room to run, and whether other industries can find comparable uses, are open questions. Software is a small slice of the economy, and lifting productivity across the whole of it is a much harder problem.

Driverless cars offer a useful picture. In San Francisco they’re everywhere and unremarkable, while in much of the world people don’t know the technology works at scale. The gap between a thing existing and a thing being used is where most of the waiting happens.

Output per Hour Is a Rough Estimate Dressed Up as a Statistic

Economy-wide productivity isn’t something anyone measures directly. Statisticians take total spending or income, deflate it with an inflation measure, and divide by an estimate of hours worked. Each of those inputs carries error, and the ratio can swing for reasons that have nothing to do with doing more with less.

The pandemic showed how badly this can mislead. When millions of lower-paid restaurant and retail workers lost their jobs in 2020, the remaining workforce skewed toward higher earners, and measured productivity jumped even though nobody was doing their job any better. When those workers were rehired, productivity appeared to fall.

The San Francisco Fed tries to strip out these distortions by separating the effects of a more experienced workforce, more machinery per worker, and people working harder when the economy runs hot. What’s left is an estimate of underlying productivity. By that measure, growth has been roughly zero over the past 18 months or so. For now, people seem to be working harder rather than smarter, which is the opposite of what you’d guess from watching the technology.

Why a 5% Treasury Yield Looks Light Against 7% Nominal Growth

The same framework helps explain the bond market.

If you lock up money for 30 years at a fixed rate, the return you’ll accept depends on the alternatives, whether that’s holding cash and rolling it over or owning risky assets with uncapped upside. With the U.S. economy growing around 7% a year in dollar terms, a 5% fixed return for three decades only makes sense if you expect growth to slow sharply. Maybe it will, but that’s a bet rather than a default.

Seen this way, rising yields reflect stronger growth and sticky inflation more than anything alarming. Headlines about the highest rates in 19 years miss that many of those 19 years were bad ones, and low rates were a symptom. Japan’s 10-year yield hitting a 30-year high tells a similar story. After decades of zero growth in yen terms and falling prices, Japan appears to have escaped, and higher rates are part of what escape looks like.

Deficits matter mainly through their effect on nominal growth. For a country that borrows in its own currency, the danger runs toward inflation rather than default. The bad version looks like Brazil, with very high real rates and heavy interest costs, stuck in an equilibrium born of past hyperinflation. The U.S. is nowhere near that.

The 1990s Capex Bust Was Real, but Today’s Spending Leaks Abroad

The 1990s weren’t only a stock market bubble. Real net investment, adjusted for depreciation and inflation, grew faster than in any sustained stretch since the data began in 1929, and industrial capacity expanded at a nearly unprecedented pace even outside tech.

When that spending collapsed, the damage was deep enough that policymakers leaned on housing to fill the hole. That wasn’t a sustainable fix, and growth through the 2000s stayed anemic anyway, which tells you how large the gap left by business investment had become.

The difference now? Where the money goes. In the 1990s, most of the equipment was made at home. Today, much of the incremental spending on data centers flows to Taiwan and Korea as imports. A slowdown would still hurt, especially equity valuations, but the idea that the U.S. economy rises or falls entirely on AI capex overstates the case.

Productivity Booms Bring Growth and Expensive Capital Together

The broader lesson is about humility with analogies. The 1990s are a useful reference, but only if you read them honestly. Productivity booms have historically produced more growth, more demand for capital, and higher real rates. They haven’t been a reliable engine of disinflation.

For investors, that means being skeptical of any story where a technological revolution delivers booming growth and cheaper money at the same time. Those two things usually pull against each other. Sometimes rising rates are a warning, and sometimes they’re the price of an economy that finally works. It pays to know which one you’re looking at.

DISCLAIMER: This article is based on a conversation from Top Traders Unplugged and reflects themes, ideas, and perspectives discussed during the episode. The views expressed are those of the guest and participants in the conversation and should not be interpreted as investment advice or as the official views of Top Traders Unplugged.

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“The Leaders Gave Ground. Trend Strength Fell to 36%.”

This Week in Trend – 16 October 2026

Welcome to This Week in Trend, our weekly examination of the evolving structure of global futures markets and what that structure means for systematic trend followers. This edition covers market conditions through the US close on Friday, 16 October 2026. Market returns, the SG Trend Index and the TTU Trend Barometer reading are all as at that close.

This was a week in which several of the year’s leading advances gave ground and trend strength fell sharply. The TTU Trend Barometer dropped 14 points to 36%, out of the Neutral band and 4 points below the 40% line that marks a cold environment for trend following. The SG Trend Index recorded the larger of its two weekly declines in ten weeks, its year-to-date figure falling from +16.14% to +14.97%. Twenty-two of 49 contracts finished higher, down from 28 a week ago, and the moves were larger. The VIX rose 16.29%, the largest move on the board, Energy gained 2.40%, Bonds 0.91%, Soft Commodities 0.57% and Currencies 0.24%. On the other side of the ledger, Metals fell 3.01%, Equity Indices 2.14%, Grains 1.77%, Bitcoin 1.50% and Meats 0.26%. The Nikkei 225 fell 7.44%, the largest decline. Many of the week’s declines came from markets falling from their highs, in the Nasdaq 100, the Nikkei 225, Oats, Soybean Meal, Canola and Copper, while a number of its gains came from markets rising inside declines, in Coffee, all four Bonds maturities, EUR and CHF. Both are interruptions, and together they are consistent with a Barometer that lost 14 points.

Last week’s report closed by asking whether the Barometer would resume its recovery toward 55% or continue to weaken from 50%. It weakened, falling 14 points to 36%. Five other questions were left open. Would Grains continue to be led by the contracts at their highs? Would Copper clear its high while Palladium set new lows? Would the dollar hold above its summer high with EUR and CHF at new lows? Would the pause in Bonds become a bounce or would the declines resume? And would Orange Juice’s second counter-trend rise hold? In Grains, the leadership thinned: Rough Rice set another high, but Oats, Soybean Meal and Canola pulled back from theirs, and Corn fell for a third week. Copper did not clear its high. It fell 1.77%, while Palladium moved to another low. The Dollar Index eased 0.36% from the highest level on its chart, its first decline in five weeks, and EUR and CHF lifted from their lows. The pause in Bonds became a bounce, with all four maturities higher for a second week. Orange Juice gave back half of last week’s rise. And the SG Trend Index, which stood at +0.28% for October a week ago, now stands at -0.73% for the month.

Trend Indicators: Barometer Falls to 36%, SG Trend Index Gives Ground

The Top Traders Unplugged (TTU) Trend Barometer measures the percentage of markets generating medium-to-strong trends. Below 40% reads as a cold environment for trend-following, above 55% reads as a favourable one, and the band between is neutral.

TTU Trend Barometer: 36%, down 14 points from 50% last week. TTU describes overall trend strength as Moderately Weak, and the reading has left the Neutral band for the area below 40% that marks a cold environment, 19 points below the 55% threshold for a favourable environment. The 10-day rate of change now reads Falling Moderately, having read Rising Weakly a week ago, so TTU’s short-term measure has turned with the reading. The five-week sequence, from 18 September to 16 October, now stands at 45, 52, 52, 50 and 36. The reading is 6 points above the late July low of 30% and 23 points below the 59% of 11 September, the week before the sequence begins. It is the second fall of 14 points in five weeks, and it has taken the reading well below the 45% it reached after the first.

Set against the performance table, the direction of the reading matches the board for the first time in three weeks. Twenty-two of 49 contracts rose, down from 28, five of the ten categories in the snapshot fell, and the SG Trend Index lost ground. The week was also much louder than the last. The average move across the board rose from 1.69% to 2.49%, and the spread between best and worst widened from 13.71 percentage points to 23.73. For two weeks breadth and the Barometer had parted. This week fewer markets rose, the moves grew larger, and the reading repeated its mid-September fall of 14 points.

The Barometer counts how many markets are generating medium to strong trends, not which way they are going or how far they moved in a given week. Larger moves add to that count only when they run with the structures beneath them, and this week a large share ran against. Of the ten largest moves on the board, five ran with the structures beneath them, against six a week ago. Crude Oil WTI, Crude Oil Brent and Heating Oil rose within their advances, while Silver and Orange Juice extended their declines. Four ran against: the Nikkei 225 and the Nasdaq 100 fell from the upper parts of their charts, Oats pulled back from the high it set last week, and Coffee rebounded inside its decline from the July spike. The VIX rose within its range. Further down the table, the counter-trend share was larger again.

The sector data is consistent with that reading. Running with their structures, WTI, Brent and Heating Oil rose within the advances in the petroleum complex, Ethanol and Rough Rice moved to new highs, Sugar set another high, and Silver, Platinum, Palladium, Lean Hogs and Lumber extended their declines, with Palladium, Lean Hogs and Lumber at new lows. Corn and Wheat also extended their falls. Running against them, the Nasdaq 100, the Nikkei 225, the S&P 500 and the Russell 2000 gave ground from their highs, Oats, Soybean Meal, Soybeans and Canola pulled back from the top of their charts, Copper eased from close to its own, and the Dollar Index eased from its high while EUR, CHF and CAD lifted from their lows. All four Bonds maturities and Coffee rose inside their declines. The second list is now as long as the first and includes several of the year’s leading advances. At 36%, the Barometer is describing an environment in which the declines mostly kept going, while a number of the advances that had carried the reading paused at the same time.

SG Trend Index: –0.73% month to date for October and +14.97% year to date as of 16 October, on SG’s estimated figure. The year-to-date figure has fallen from +16.14% to +14.97%, a decline of 1.17 percentage points that more than reverses last week’s 0.42 point gain and is the larger of the index’s two weekly declines in the last ten weeks. The month-to-date figure now covers the first twelve trading days of October and has turned negative. Set against the Barometer, the index and the reading fell together, after two weeks in which they moved in opposite directions. Over the last five weeks the Barometer has fallen 14, risen 7, held, fallen 2 and fallen 14, while the index has added 0.50 and 1.37 percentage points, given back 0.33, added 0.42 and given back 1.17. The Barometer measures how many markets are trending, and the index records what institutional trend-following portfolios earned. A decline of this size alongside a 14 point fall is consistent with a week in which reversals in established advances, in the equity indices, the leading Grains and Copper, carried more weight than the trends that persisted in the petroleum complex and the precious metals. Across the five weeks the index has added 0.79 percentage points.

Weekly Asset Class Snapshot

Source: Finviz.com.
Sector averages are simple equal-weighted means of the constituent contracts in each sector.

Equity Indices (-2.14% | prev -0.22%)

Equity Indices fell 2.14% with three of seven contracts higher, a second weekly decline and a much larger one. The DAX rose 2.04%, the DJIA 0.55% and Euro Stoxx 50 0.42%, while the S&P 500 fell 1.98%, the Russell 2000 3.07%, the Nasdaq 100 5.52% and the Nikkei 225 7.44%, the largest decline on the board. Last week the US large-cap indices did the lifting while Europe and Japan eased. This week the pattern reversed, with the European indices steadying and the Nikkei 225 and the US technology and small-cap indices falling. The Nikkei 225 near 63,900 fell from the upper end of its chart toward the middle of its summer range. The Nasdaq 100 near 29,400 gave back a large part of the climb to last week’s high, and the S&P 500 near 7,700 eased from its own high. The Russell 2000 near 2,737 extended the pullback from its summer high near 3,100. The DJIA near 52,200 edged higher, still below its August high near 54,000. The DAX near 25,800 recovered part of its pullback from the late August high, and Euro Stoxx 50 near 6,200 steadied. The advances that have run since the spring remain visible on all seven charts, but most of them now sit below their highs, and the two that set highs last week both fell.

Energy (+2.40% | prev +2.09%)

Energy gained 2.40% with four of six contracts higher, the largest sector advance on the board after the VIX and a second weekly gain. Crude Oil WTI rose 9.56%, the second largest gain on the board, followed by Crude Oil Brent at 4.91%, Heating Oil at 3.39% and Ethanol at 1.57%, while Gasoline RBOB fell 1.81% and Natural Gas 3.23%. WTI near 99 climbed toward the upper part of the range it has held since the spring, and Brent near 110 rose toward the top of its own. WTI’s chart has rolled to the December contract ahead of the November contract’s expiry on 20 October, so its level is not directly comparable with last week’s. Heating Oil near 4.89 extended its climb back toward its high. Ethanol near 2.10 moved to the highest level on its chart. Gasoline RBOB near 3.24 remains inside the range below its spring high, and Natural Gas near 3.12 gave back last week’s lift, its summer base and the decline running since February both intact. Last week Heating Oil and Brent turned higher. This week WTI joined them while Gasoline RBOB eased, and the advances in the petroleum complex remain in place.

Metals (-3.01% | prev +0.46%)

Metals fell 3.01% with all five contracts lower, the weakest sector on the board. Gold fell 0.83%, Copper 1.77%, Palladium 2.76%, Platinum 3.56% and Silver 6.13%, the second largest decline on the board. Last week Copper recovered most of its prior fall and the precious metals lifted. This week the precious metals resumed their declines and Copper eased. Silver near 57.34 gave back last week’s lift and more, falling below the level of its August bounce. Gold near 4,189 drifted lower, still above the July low near 4,000. Platinum near 1,630 extended its decline, and Palladium near 1,116 moved to another low on its chart. Copper near 6.58 eased from close to the highest level on its chart, and the advance that has run since last autumn is intact. Four of the five moves ran with the structures beneath them. For a portfolio carrying short exposure in the precious metals, the week paid, and the fall in Copper was a modest cost against an advance that remains in place.

Soft Commodities (+0.57% | prev +2.37%)

Soft Commodities gained 0.57% with two of six contracts higher, and two contracts account for most of the result. Coffee rose 6.50%, the third largest gain on the board, and Sugar 2.96%, while Lumber fell 0.09%, Cocoa 0.35%, Cotton 0.67% and Orange Juice 4.91%. Without Coffee, the sector average would be close to -0.61%. Coffee near 304 rebounded inside its decline from the July spike, the largest lift on its chart in several weeks, though the decline remains intact. Sugar near 20.85 set another high, extending its breakout for a third week. Orange Juice near 140 gave back half of last week’s rise and is back near the lows of the decline that has run most of the year. Cocoa near 5,660 holds inside its rebound from the spring, Cotton near 80 steadied below its August high, and Lumber near 521 moved to a new low. Last week Orange Juice charged a portfolio carrying short exposure there. This week it repaid part of that cost, while Coffee charged a portfolio positioned with its decline and Sugar continued to pay one positioned with its climb.

Grains (+0.85% | prev -2.84%)

Grains fell 1.77% with one of eight contracts higher, giving back last week’s gain and more. Rough Rice rose 2.24%, while Corn fell 1.15%, Soybean Oil 1.31%, Wheat 1.56%, Canola 2.19%, Soybean Meal 2.32%, Soybeans 2.38% and Oats 5.47%, the fourth largest decline on the board. Last week the contracts near their highs set the course of the complex. This week most of them pulled back. Rough Rice near 17.35 moved to another high, the one contract to extend. Oats near 397 gave back most of last week’s rise from the high it set then. Soybean Meal near 357 and Soybeans near 1,261 eased from the top of their charts, and Canola near 797 pulled back from close to its own high. Corn near 474 fell for a third week below the level it held since its August gap, and Wheat near 660 fell for a seventh week as it unwinds its August spike. Soybean Oil near 67 eased inside the range below its summer peak. Three of the eight moves ran with the structures beneath them, and the advances in the leading contracts are interrupted rather than broken.

Meats (-0.26% | prev +0.83%)

Meats fell 0.26% with one of three contracts higher. Live Cattle rose 0.57%, while Feeder Cattle slipped 0.01% and Lean Hogs fell 1.33%. After a week in which both cattle contracts extended their bounces, Live Cattle near 228.45 edged higher and Feeder Cattle near 342 held where it was. Neither chart has yet set a higher high to change the shape of the declines that have run from their spring highs. Lean Hogs near 66.88 moved to another low, extending the decline from its spring high for a second week. For a portfolio carrying short exposure in the sector, Lean Hogs paid again, and the cattle contracts, after two weeks of charging, were close to flat.

Bonds (+0.91% | prev +0.20%)

Bonds gained 0.91% with all four contracts higher, a second weekly gain and a larger one. The 30 Year Bond rose 2.21%, the 10 Year Note 0.82%, the 5 Year Note 0.48% and the 2 Year Note 0.13%. As last week, the gains grew with maturity, but this week the long end did most of the lifting. The 30 Year Bond near 105.66 and the 10 Year Note near 105.63 have now recovered a larger share of their autumn falls, and the 5 Year Note near 104.22 and the 2 Year Note near 102.02 lifted further from their lows. Last week this report asked whether the pause would become a bounce or the declines would resume. It became a bounce, though none of the four charts has yet set a higher high, and the declines that have run since the winter peaks remain intact on all of them. For a portfolio carrying short exposure across the curve, the week was a cost at every maturity, largest at the long end.

Currencies (+0.24% | prev -0.04%)

Currencies gained 0.24% with six of eight contracts higher, as the dollar eased and most of the basket lifted against it. CAD rose 0.78%, GBP and CHF 0.60%, NZD 0.58%, EUR 0.25% and JPY 0.05%, while the US Dollar Index fell 0.36% and AUD 0.60%. The Dollar Index near 101.61 eased from the highest level on its chart, ending a run of four weekly gains. EUR near 1.1260 and CHF near 1.2215 lifted from the new lows they set last week, and CAD near 0.7092 lifted from its summer low. NZD near 0.5660 edged up from the bottom of its range, and GBP near 1.3315 rose within the lower part of its range. AUD near 0.6929 eased further below 0.70, though its climb from last year’s lows remains the firmest upward structure in the basket. JPY near 0.6357 was little changed inside the decline that has run all year. Last week the structures held with smaller moves. This week the dollar paused, and the lifts in the basket ran against the declines that remain in place.

Volatility, Crypto: The VIX rose 16.29% to near 19.9, the largest move on the board, lifting from the lower part of its range for the year toward the middle of it, still well below its spring spike near 30. Market pricing reflected a week in which the Nikkei 225 and the US technology and small-cap indices fell while all four Bonds maturities rose. Bitcoin fell 1.50% to near 81,500, a second weekly decline. The rebound from the summer lows near 60,000 remains stalled below 90,000, and the decline from above 120,000 is still the dominant feature of its chart.

Top Movers

Source: Finviz.com.
Top five up and top five down by single-week percentage move.

The two halves of the table are uneven again this week, and the gains are the larger half for a second week, though one move accounts for most of the difference. The five largest gains range from 16.29% to 3.39%, and the five largest declines from 7.44% to 4.91%. The gainers come from three sectors, and three of the five extended structures already in place: WTI, Brent and Heating Oil rose within the advances in the petroleum complex. Coffee is the exception, rebounding inside its decline, and the VIX rose within its range. The losers come from four sectors. Silver and Orange Juice extended their declines, while the Nikkei 225, the Nasdaq 100 and Oats fell from the upper parts of their charts. Across the ten largest moves on the board, five ran with the structures beneath them, against six a week ago. The proportion eased for a second week, and this time the largest declines came from leading advances, which is consistent with a Barometer that fell 14 points.

Portfolio View

For a portfolio following the prevailing structures, a week in which several leading advances gave ground was a week in which more of its long positions would have been interrupted while its short positions were mixed. The Barometer fell 14 points to 36%, below the Neutral band, and the SG Trend Index gave back 1.17 percentage points to +14.97% year to date. WTI, Brent and Heating Oil rose within their advances, Ethanol and Rough Rice moved to new highs, and Sugar set another high. On the short side, Silver, Platinum and Orange Juice extended their declines, and Palladium, Lean Hogs and Lumber fell to new lows. For a portfolio carrying positions aligned with those structures, the gains in the petroleum complex, Rough Rice and Sugar would have been favourable, alongside the declines in the precious metals, Lean Hogs and Orange Juice. The pullbacks in the Nikkei 225, the US equity indices, Oats, Soybean Meal, Canola and Copper would have worked against positions following their advances, as would the rises in Bonds, Coffee, EUR and CHF for positions following the prevailing declines. How much of that movement became return depends on sizing and exposure, which a week of prices does not reveal. The week was directional in the petroleum complex and the precious metals, while established advances were interrupted in the equity indices, the leading Grains and Copper, and established declines in Bonds and several currencies.

Final Reflections

After two weeks in which breadth and trend strength parted, this week they fell together. Contracts finishing higher fell from 28 to 22, the Barometer fell 14 points to 36%, and the SG Trend Index gave back 1.17 percentage points, its year-to-date figure falling below the +15.72% it recorded two weeks ago. The moves were larger, and more of the large ones ran against the structures beneath them.

Equity Indices made the point most plainly. The Nasdaq 100 and the S&P 500 set highs last week and both fell this week, the Nasdaq 100 by 5.52%, alongside a Nikkei 225 that fell from the upper end of its chart. Each fall came from inside an advance that remains intact, and a week of reversal is a week without persistence. Oats, Soybean Meal, Canola and Copper did the same. The petroleum complex showed the other side, with WTI, Brent and Heating Oil rising within their advances and Ethanol moving to a new high.

1. Fewer markets rose and trend strength fell sharply. Much of the week’s movement ran against the leading advances.

The five-week sequence now reads 45, 52, 52, 50 and 36. The Barometer has given back the 7 point recovery of late September and more, and sits 4 points below the 40% line, while the SG Trend Index has added 0.79 percentage points across the same five weeks. Several of the week’s declines, across the equity indices, the leading Grains and Copper, came from markets falling from their highs, and several of its gains, across Bonds, Coffee and the currencies, came from markets rising inside declines. Both reduce the count of trending markets, and this week they did so at the same time.

2. The return figure fell with the Barometer. The index’s decline is consistent with reversals in established advances outweighing the trends that persisted.

Five of the ten largest moves ran with the structures beneath them. WTI, Brent and Heating Oil extended their advances, while Silver and Orange Juice continued their declines. A trend-following portfolio is paid by the distance its trending markets travel and charged by the distance its trending markets reverse. The index’s 1.17 percentage point decline is consistent with a week in which the reversals in the equity indices and the leading Grains outweighed the advances in the petroleum complex and the declines in the precious metals. Without the index’s positions and contributions, the precise sources of the decline cannot be established.

This week was a reminder that the direction of a move and its value to a trend follower are separate measurements. WTI rose 9.56% and paid a portfolio following its advance, while Coffee rose 6.50% and charged one carrying short exposure in its decline. Silver fell 6.13% and paid a portfolio positioned with its decline, while the Nasdaq 100 fell 5.52% and charged one following its advance. Rising markets are not good markets for a portfolio positioned against them, and falling markets are not bad ones for a portfolio positioned to fall with them. What matters each week is whether a market moved with the structure a portfolio was following.

The week ahead is therefore about whether the Barometer stabilises near its current reading of 36% or falls toward the late July low of 30%. Equity Indices are the sector to follow: the Nasdaq 100 and the Nikkei 225 have given back a large part of their climbs, and whether the pullbacks stop above the levels from which those climbs began will shape the sector. In Grains, Rough Rice is at another high while Oats, Soybean Meal and Canola have pulled back from theirs. WTI and Brent have moved higher for a second week and sit in the upper parts of their ranges. Bonds have bounced for two weeks, and whether the bounce becomes a higher high or the declines resume matters for the reading as much as for the sector. The dollar has eased from its high, with EUR and CHF lifting from their lows. And October has reached its third week with the SG Trend Index at -0.73% for the month. In each case the question is the same one it always is: does the structure persist? For trend followers, up or down was never the central question. Persistence was. The opportunity was directional, but not directionally biased.

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List of Resources used in the Week in Review

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Every few decades, the same pattern usually turns up where government debt grows faster than the economy that has to carry it, and voters grow angrier at a system that no longer feels like it works for them. Then prices start behaving in ways that a single chart doesn’t explain. These are usually reported as three separate stories. They rarely are.

One macro strategist who spent years at the Federal Reserve before running a research shop put it this way: the biggest driver of inflation is not the shock itself, it’s what people expect to happen next.

A war, a bad harvest, a spike in oil prices, these things push prices up for a season. But if people still believe the central bank will bring things back to normal, they behave accordingly, and prices settle. The trouble typically starts once expectations come loose from that anchor. When people stop believing prices will come back down, they change their behavior in ways that make the belief come true.

That idea that inflation is mostly a story people tell themselves is the thread running through almost everything worth understanding about debt, politics, and the next decade of markets. Each section below traces back to some version of this mechanism.

The Three Doors Out of a Debt Spiral

There are only three ways a heavily indebted government gets out of its hole. It can default. It can inflate the debt away. Or it can close the gap between what it spends and what it collects, known as the primary deficit.

Fifty years of research across dozens of countries points toward the same conclusion: the fastest and least painful path is the third one, a sharp, short period of spending cuts.

Argentina took this route recently, absorbing a brief, painful contraction and coming out the other side with its books in order. Italy did something similar under Giorgia Meloni, cutting spending by more than three percentage points of GDP in a year and then outgrowing most of its neighbors. The empirical case for austerity is stronger than many people assume.

One counterargument is that a country with a reserve currency doesn't play by the same rules. The United States can, in theory, lean on what economists have long called its exorbitant privilege, the ability to borrow in its own currency from lenders all over the world. Whether that privilege can survive a serious attempt to inflate away the debt is the disagreement, and it’s worth watching closely, because the answer decides which of the three doors gets used.

The Fed's Gas and Brakes Problem

Central banks rarely announce their intentions outright. Instead, they signal.

A well-timed op ed, a speech at Jackson Hole, a public nod toward fiscal discipline, these are ways of managing expectations without committing to a specific policy path. One useful way to think about this moment is as a coordinated act between two roles: one person pushing for looser policy to keep markets calm and borrowing costs low, and another periodically playing the responsible adult, warning about the dangers of printing money.

Neither role is necessarily insincere, but treating the rhetoric and the policy as the same thing is a mistake. Watch what a central bank does with its balance sheet, not what it says at a podium. The gap between the two can tell you more about where the debt path is heading than any speech does, and that gap is where most of the money gets made or lost.

What Populism Is Asking For

Populism gets treated as one phenomenon, usually defined by its economic program. That framing misses the point, though.

At its root, populism is a demand to be represented. It shows up on the left as calls for more spending on health care and education, and it shows up on the right as calls for less spending and less redistribution. The programs look opposite. The underlying grievance is the same: a feeling that elected representatives stopped listening.

Consider immigration. Polling in the United States has shown a majority favoring less immigration going back to the 1970s, through administrations of both parties, while the policy outcome moved the opposite direction for decades. That gap between what voters wanted and what they got predicts populist energy better than any inequality statistic does.

A Small Country's Unglamorous Fix

Switzerland offers a useful, if unglamorous, case study. Its mix of representative democracy and direct democracy, where citizens vote directly on major policy questions through referenda, produces better outcomes on infrastructure, spending discipline, and public satisfaction than either system alone.

The mechanism is simple. Elected officials, left on their own, tend to drift toward serving themselves and their donors, and a referendum acts as a check, a way for the public to pull the system back when it wanders too far from what people want.

It’s not a flawless model, and pure direct democracy has its failure modes, but the blend, some representation, some direct input, shows up again and again in the data as a stabilizer against the disenfranchisement that feeds populist anger.

The 1970s, Read as One Story Instead of Three

Many accounts of 1970s inflation list three separate causes: heavy government spending, the cost of the Vietnam War, and the OPEC oil shock. Treating these as unrelated events misses how they reinforced one another.

Populist pressure led to protectionism. Protectionism strained international relationships. Strained relationships made commodity supply chains more fragile and easier to weaponize. Each piece fed the next.

A modern parallel comes from an unlikely source: weather. A major El Nino event, the type that shifts rainfall patterns across the Pacific, doesn't reduce global food or energy output so much as redistribute it, favoring some regions and punishing others. In a world with open trade, that redistribution barely registers as an inflation story.

In a fragmented, protectionist world, it becomes one, because countries with a surplus are far more willing to hoard than to share. The same weather event produces very different economic outcomes depending on how connected or divided the world happens to be at the time.

Turning the Public Into Shareholders

The most interesting proposal on the table isn't a spending plan or a tax plan. It's the idea of making ordinary citizens direct owners of financial assets, through a sovereign wealth fund or a broadly distributed equity account. If a country's growth increasingly runs through capital markets rather than wages, then giving more people a stake in those markets becomes one of the few ways to address inequality without abandoning a market-based system.

Norway's fund, centered on oil revenue, gets cited as the model, and for good reason, since it has grown into one of the larger pools of capital on earth without requiring the country to change its economic system. A version of this idea, scaled to a much larger economy, would take a decade or more to reach real size, but the appeal cuts across the political spectrum for a simple reason. It doesn't ask anyone to give up the free market. It only asks who gets to own a piece of it.

Debt, inflation, and populism get reported as separate headlines, but they read more clearly as three faces of the same underlying pressure, one that has shown up before and will show up again, in different clothes, until something changes the incentives underneath it. Recognizing the pattern early is usually worth more than reacting to whichever piece of it happens to be making news that week.

DISCLAIMER: This article is based on a conversation from Top Traders Unplugged and reflects themes, ideas, and perspectives discussed during the episode. The views expressed are those of the guest and participants in the conversation and should not be interpreted as investment advice or as the official views of Top Traders Unplugged.

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by

“Twenty-Eight Markets Rose. Trend Strength Eased to 50%.”

This Week in Trend – 9 October 2026

Welcome to This Week in Trend, our weekly examination of the evolving structure of global futures markets and what that structure means for systematic trend followers. This edition covers market conditions through the US close on Friday, 9 October 2026. Market returns, the SG Trend Index and the TTU Trend Barometer reading are all as at that close.

This was a week in which breadth doubled and trend strength eased. Twenty-eight of 49 contracts finished higher, up from 14 a week ago, but the TTU Trend Barometer fell 2 points to 50%, keeping the reading inside the Neutral band and 5 points below the 55% threshold for a favourable environment. The SG Trend Index nonetheless resumed its gains, its year-to-date figure rising from +15.72% to +16.14%. Soft Commodities gained 2.37% and Energy 2.09%, the two largest sector advances, followed by Grains at 0.85%, Meats at 0.83%, Metals at 0.46% and Bonds at 0.20%. On the other side of the ledger, Bitcoin fell 3.72%, the VIX 3.00%, Equity Indices 0.22% and Currencies 0.04%. Orange Juice rose 9.99%, the largest move on the board in either direction, and Bitcoin’s fall was the largest decline. Many of the week’s gains came from markets rising inside declines, in Orange Juice, Natural Gas, the cattle contracts, the precious metals and every Bonds maturity, which is consistent with a broader board that added more interruptions than persistence.

Last week’s report closed by asking whether the Barometer would resume its recovery toward 55% or give ground from 52%. It gave ground, falling 2 points to 50%. Five other questions were left open. Which group in Grains would set the course of the complex? Would Copper’s pullback deepen while the precious metals extended their declines? Would the US Dollar Index hold above its summer high? Would the 2 Year Note join the other maturities at new lows? And would the petroleum charts stay above the levels from which their advances began? In Grains, the contracts near their highs set the course: Rough Rice and Oats moved to the highest levels on their charts and Soybean Meal recovered most of last week’s pullback, while Corn fell further below its August level. Copper did not extend its pullback. It rose 2.18% and is back near the top of its chart, while Palladium moved to another low. The Dollar Index held above its summer high and edged higher, with EUR and CHF at new lows. The 2 Year Note held just above last week’s low, and all four maturities lifted. The petroleum charts held and, in Heating Oil and Crude Oil Brent, turned higher. And the SG Trend Index, which opened October at -0.08%, now stands at +0.28% for the month.

Trend Indicators: Barometer Eases to 50%, SG Trend Index Resumes Its Gains

The Top Traders Unplugged (TTU) Trend Barometer measures the percentage of markets generating medium-to-strong trends. Below 40% reads as a cold environment for trend-following, above 55% reads as a favourable one, and the band between is neutral.

TTU Trend Barometer: 50%, down 2 points from 52% last week. TTU describes overall trend strength as Strong, while the reading sits inside the Neutral band, 5 points below the 55% threshold for a favourable environment. The 10-day rate of change still reads Rising Weakly, so the week’s fall has not yet turned TTU’s short-term measure. The five-week sequence now stands at 59, 45, 52, 52 and 50. The reading is 20 points above the late July low of 30% and 9 points below the 59% of four weeks ago, having recovered 5 of the 14 points lost in mid September.

Set against the performance table, a falling reading is not what the board would suggest at first glance. Twenty-eight of 49 contracts rose, double last week’s count, six of ten sectors gained, and the SG Trend Index recovered from its first weekly decline in eight weeks. The week was also quieter than the last. The average move across the board fell from 2.42% to 1.69%, and the spread between best and worst narrowed from 18.25 percentage points to 13.71. For a second consecutive week breadth and the Barometer parted, this time in the opposite direction. Last week fewer markets rose and the reading held, and this week twice as many rose and the reading fell.

The Barometer counts how many markets are generating medium to strong trends, not which way they are going or how far they moved in a given week. A broader board adds to that count only if the gains run where trends already exist, and this week a large share of them did not. Of the ten largest moves on the board, six ran with the structures beneath them, against seven a week ago. Heating Oil, Soybean Meal and Rough Rice rose toward or to the top of their charts, while Bitcoin, Lean Hogs and Palladium extended their declines. Two ran against: Orange Juice rebounded from the lows of the decline that has run most of the year, and Natural Gas lifted from its summer base inside the decline running since February. Corn extended its break below its August level, and the VIX eased inside its range. Further down the table, the counter-trend share was larger.

The sector data is consistent with that reading. Running with their structures, Rough Rice and Oats moved to the highest levels on their charts, Sugar set another high, Soybean Meal recovered most of last week’s pullback, Copper returned toward the top of its chart, the S&P 500 and the Nasdaq 100 set new highs, Heating Oil climbed back toward its high, and the US Dollar Index extended above its summer high while EUR and CHF moved to new lows. Palladium and Lean Hogs fell to new lows. Running against them, Orange Juice and Natural Gas rose inside their declines, Gold and Silver lifted inside theirs, all four Bonds maturities rose from their lows, Live Cattle and Feeder Cattle extended their bounces, Lumber lifted from its new low, and the Nikkei 225, the European indices and the Russell 2000 gave ground from their highs. Corn’s break also took a contract out of the advance it had held since August. The first list still holds the stronger moves, but the second is long enough to account for the reading. At 50%, the Barometer is describing an environment in which the markets that were trending mostly kept going, while a wider set of declines and advances paused at the same time.

SG Trend Index: +0.28% month to date for October and +16.14% year to date as of 9 October, on SG’s estimated figure. The year-to-date figure has risen from +15.72% to +16.14%, a gain of 0.42 percentage points that follows last week’s 0.33 point decline and takes the figure above the +16.05% recorded two weeks ago. The month-to-date figure now covers the first seven trading days of October. Set against the Barometer, the index rose as trend strength fell, the reverse of last week, when the index gave ground while the reading held. Over the last five weeks the Barometer has risen 4, fallen 14, risen 7, held and fallen 2, while the index has added 2.45, 0.50 and 1.37 percentage points, given back 0.33 and added 0.42. The Barometer measures how many markets are trending, and the index records what institutional trend-following portfolios earned. A modest gain alongside a 2 point fall is consistent with a week in which the trends that persisted, in Heating Oil, Soybean Meal, Rough Rice, Sugar, Copper and the dollar, carried more weight than the number of markets that paused. Across the five weeks the index has added 4.41 percentage points.

Weekly Asset Class Snapshot

Source: Finviz.com.
Sector averages are simple equal-weighted means of the constituent contracts in each sector.

Equity Indices (-0.22% | prev +0.27%)

Equity Indices fell 0.22% with three of seven contracts higher, and the sector’s leadership changed hands. The S&P 500 rose 1.06%, the DJIA 0.87% and the Nasdaq 100 0.15%, while the DAX fell 0.53%, Euro Stoxx 50 0.94%, the Russell 2000 1.01% and the Nikkei 225 1.17%. Last week the Nikkei 225 and the Nasdaq 100 carried the sector. This week the Nikkei 225 gave back part of its gain and the US large-cap indices did the lifting. The S&P 500 near 7,866 has moved to the highest level on its chart, and the Nasdaq 100 near 31,123 set another high. The DJIA near 51,976 steadied after its pullback from the August high near 54,000. The Nikkei 225 near 69,075 eased from the upper end of its chart but remains close to its summer peak. Euro Stoxx 50 near 6,209 and the DAX near 25,308 extended their pullbacks from the late August highs, and the Russell 2000 near 2,824 continues to drift lower from its summer high. The advances that have run since the spring remain visible on all seven charts. The division noted last week is now clearer, with the S&P 500 and the Nasdaq 100 at their highs and the European indices and the Russell 2000 in pullbacks that have run for several weeks.

Energy (+2.09% | prev -0.78%)

Energy gained 2.09% with four of six contracts higher, ending a run of two weekly declines. Natural Gas rose 6.10%, the second largest gain on the board, followed by Heating Oil at 5.27%, Crude Oil Brent at 2.42% and Crude Oil WTI at 0.81%, while Gasoline RBOB fell 0.52% and Ethanol 1.55%. Heating Oil near 4.68 has climbed back toward the highest level on its chart. Its chart shows a smaller rise than the recorded figure, from near 4.56 a week ago, so as last week the chart is the better guide to its structure. Brent near 104.54 rose within the upper part of its range, and WTI near 91.66 held well above the base from which its advance began. Gasoline RBOB near 3.27 remains inside the range below its spring high. Natural Gas near 3.20 lifted from the base it built through the summer, but the decline running since February is still the dominant feature of its chart. Ethanol near 2.07 eased from the highest level on its chart. Last week the petroleum charts had absorbed two weeks of easing. This week Heating Oil and Brent turned higher, and the advances in the petroleum complex remain in place.

Metals (+0.46% | prev -5.45%)

Metals gained 0.46% with three of five contracts higher, after two weekly declines. Copper rose 2.18%, Gold 1.30% and Silver 1.05%, while Platinum fell 0.39% and Palladium 1.86%. Last week Copper joined the precious metals in falling. This week it recovered about two thirds of that fall. Copper near 6.71 is back close to the highest level on its chart, and the advance that has run since last autumn is intact. Gold near 4,220 and Silver near 61.11 lifted modestly, Gold holding above the July low near 4,000 and Silver near the lows of its August bounce. Neither move has changed the shape of the declines that have run since February. Platinum near 1,695 drifted lower, and Palladium near 1,150 moved to another low on its chart. Three of the five moves ran with the structures beneath them. For a portfolio carrying long exposure in Copper and short exposure in Platinum and Palladium, the week paid, and the small lifts in Gold and Silver were a modest cost against declines that remain in place.

Soft Commodities (+2.37% | prev -0.84%)

Soft Commodities gained 2.37% with four of six contracts higher, the largest sector advance on the board, though one contract accounts for much of it. Orange Juice rose 9.99%, the largest move on the board, followed by Cotton at 2.10%, Sugar at 1.61% and Lumber at 1.23%, while Cocoa fell 0.09% and Coffee 0.62%. Without Orange Juice, the sector average would be close to 0.85%. Orange Juice near 146.70 has rebounded from the lows of the decline that has run most of the year, its second sharp counter-trend rise in three weeks, and the decline remains intact. Sugar near 20.27 set another high, extending the breakout of a week ago. Cotton near 80.39 steadied below its August high, and Lumber near 534 lifted from the new low it set last week. Cocoa near 5,671 holds inside its rebound from the spring, and Coffee near 285.15 eased inside its decline from the July spike. Two weeks ago Orange Juice charged a portfolio carrying short exposure there, and last week it repaid that cost. This week it charged it again, while Sugar continued to pay a portfolio positioned with its climb.

Grains (+0.85% | prev -2.84%)

Grains gained 0.85% with five of eight contracts higher, recovering part of the prior week’s fall. Soybean Meal rose 5.21%, the fourth largest gain on the board, followed by Rough Rice at 3.55%, Oats at 3.06%, Soybeans at 1.08% and Canola at 0.15%, while Soybean Oil fell 0.87%, Wheat 1.76% and Corn 3.62%. Last week this report asked which group would set the course of the complex. This week the contracts near their highs answered. Rough Rice near 16.97 and Oats near 420.25 moved to the highest levels on their charts, and Canola near 817 remains close to its own. Soybean Meal near 365.40 recovered most of last week’s pullback and sits just below the high it set two weeks ago, and Soybeans near 1,292 steadied close to the top of their chart. Corn near 480.50 fell further below the level it held since its August gap, the weakest chart in the sector, and Wheat near 670.75 fell for a sixth week as it unwinds its August spike. Soybean Oil near 68.03 eased inside the range below its summer peak. Six of the eight moves ran with the structures beneath them, and Corn’s break has now run for two weeks.

Meats (+0.83% | prev +0.35%)

Meats gained 0.83% with two of three contracts higher. Feeder Cattle rose 3.26% and Live Cattle 2.52%, while Lean Hogs fell 3.28%, the third largest decline on the board. After a week in which the cattle contracts barely moved, both extended the bounces they made from the lows of the declines that have run from their spring highs. Feeder Cattle near 341.88 and Live Cattle near 227.10 have now recovered a larger share of those declines, though neither chart has yet set a higher high to change its shape. Lean Hogs near 67.75 gave back last week’s lift and moved to a new low, extending the decline from its spring high. For a portfolio carrying short exposure in the sector, Lean Hogs paid and the cattle contracts charged.

Bonds (+0.20% | prev -0.59%)

Bonds gained 0.20% with all four contracts higher, the first sector gain after five consecutive declines. The 30 Year Bond rose 0.36%, the 10 Year Note 0.22%, the 5 Year Note 0.15% and the 2 Year Note 0.07%. The ordering of recent weeks was repeated in reverse, with the gains growing with maturity, and the moves were small. The 5 Year Note near 103.60, 10 Year Note near 104.61 and 30 Year Bond near 103.19 lifted from the new lows they set a week ago, and the 2 Year Note near 101.84 held just above its own low. Last week this report asked whether the 2 Year Note would join the other maturities at new lows. It did not, and the sector paused. The declines that have run since the winter peaks remain intact on all four charts. For a portfolio carrying short exposure across the curve, the week was a small cost at every maturity.

Currencies (-0.04% | prev -0.50%)

Currencies fell 0.04%, the smallest sector move on the board, and the basket split evenly around the dollar. The US Dollar Index rose 0.30%, a fourth consecutive weekly gain, alongside AUD at 0.48% and GBP at 0.01%, while NZD was unchanged and CAD fell 0.09%, CHF 0.21%, JPY 0.32% and EUR 0.47%. The Dollar Index near 102.02 extended above its summer high and sits at the highest level on its chart. EUR near 1.1232 and CHF near 1.2134 moved to new lows on their charts. CAD near 0.7037 holds at its summer low, and NZD near 0.5625 sits at the bottom of its range. GBP near 1.3236 held in the lower part of its range. AUD near 0.6977 edged higher but remains just below 0.70, its climb from last year’s lows still the firmest upward structure in the basket. JPY near 0.6349 eased again inside the decline that has run all year. Last week the dollar left its range and the rest of the basket moved with it. This week the moves were smaller, but the structures did not change.

Volatility, Crypto: The VIX fell 3.00% and near 17.05 remains in the lower part of its range for the year, consistent with an equity sector in which the US large-cap indices set new highs while Europe and Japan eased without signs of stress. Bitcoin fell 3.72% to near 82,800, the largest decline on the board, giving back the prior week’s 1.22% gain and more. The rebound from the summer lows near 60,000 has stalled below 90,000, and the decline from above 120,000 remains the dominant feature of its chart.

Top Movers

Source: Finviz.com.
Top five up and top five down by single-week percentage move.

The two halves of the table are uneven again this week, but the balance has reversed and the gains are now the larger half. The five largest gains range from 9.99% to 3.55%, and the five largest declines from 3.72% to 1.86%. The gainers come from three sectors, and three of the five extended structures already in place: Heating Oil climbed back toward its high, Soybean Meal recovered most of its pullback, and Rough Rice moved to a new high. Orange Juice and Natural Gas are the exceptions, both rising inside declines. The losers come from five sectors. Bitcoin, Lean Hogs and Palladium extended their declines, Corn extended its break below its August level, and the VIX eased inside its range. Across the ten largest moves on the board, six ran with the structures beneath them, against seven a week ago. The proportion eased slightly even as the number of rising markets doubled, which is consistent with a Barometer that fell 2 points in a week of broader gains.

Portfolio View

For a portfolio following the prevailing structures, a week in which twice as many markets rose was a week in which more of its long positions would have moved in its favour and more of its short positions would have been interrupted. The Barometer eased 2 points to 50%, inside the Neutral band, and the SG Trend Index added 0.42 percentage points to +16.14% year to date. Rough Rice and Oats moved to new highs, Sugar, the S&P 500 and the Nasdaq 100 set further highs, Copper and Soybean Meal recovered most of last week’s pullbacks, and Heating Oil climbed back toward its high. On the short side, Palladium and Lean Hogs fell to new lows, and EUR and CHF moved to new lows against a dollar that extended above its summer high. For a portfolio carrying positions aligned with those structures, the gains in Grains, Sugar, Copper, Heating Oil and the US equity indices would have been favourable, alongside the declines in Palladium, Lean Hogs and several currencies. The counter-trend moves in Orange Juice, Natural Gas, Bonds, the precious metals and the cattle contracts would have worked against positions following the prevailing declines, as would the pullbacks in the European indices and the Nikkei 225 for positions following their advances. How much of that movement became return depends on sizing and exposure, which a week of prices does not reveal. The week was directional in Grains, the US equity indices and around the dollar, while established declines were interrupted, so far briefly, in Bonds, the cattle contracts and Orange Juice.

Final Reflections

After a week in which fewer markets rose and trend strength held, this week twice as many rose and trend strength eased. Contracts finishing higher doubled from 14 to 28, the Barometer fell 2 points to 50%, and the SG Trend Index added 0.42 percentage points, moving above the +16.05% it recorded two weeks ago. For a second week breadth and the Barometer parted, and this time the return figure rose with breadth.

Bonds made the point most plainly. All four maturities rose, lifting the sector average and the count of rising markets, but each lift came from a new low inside a decline that remains intact, and a week without follow-through is a week without persistence. The cattle contracts, the precious metals, Natural Gas and Orange Juice did the same. Grains showed the other side, with two contracts at the highest levels on their charts and the group already close to its highs setting the course of the complex.

1. Breadth doubled and trend strength eased. A large share of the new upside ran inside declines.

The five-week sequence now reads 59, 45, 52, 52 and 50. The Barometer has recovered 5 of the 14 points lost in mid September and sits 5 points below the 55% threshold, while the SG Trend Index has added 4.41 percentage points across the same five weeks. Eleven of the 28 rising contracts, across Bonds, the precious metals, the cattle contracts, Natural Gas, Orange Juice and Lumber, rose against declines that remain in place, and a counter-trend lift adds to the count of rising markets without adding to the count of trending ones.

2. The return figure rose while the Barometer fell. The index’s gain is consistent with the trends that persisted carrying more weight than the markets that paused.

Six of the ten largest moves ran with the structures beneath them, led by Heating Oil, Soybean Meal and Rough Rice on the upside and Bitcoin, Lean Hogs and Palladium on the downside. A trend-following portfolio is paid by the distance its trending markets travel, and a reading can ease in a week when the markets that kept going still travelled far enough to deliver. The index’s 0.42 percentage point gain is consistent with that kind of week.

This week was a reminder that the direction of a move and its value to a trend follower are separate measurements. Rough Rice rose 3.55% and paid a portfolio following its advance, while Orange Juice rose 9.99% and charged one carrying short exposure there. Palladium fell 1.86% and paid a portfolio positioned with its decline, while Corn fell 3.62% and charged one still long from its August advance. Rising markets are not good markets for a portfolio positioned against them, and falling markets are not bad ones for a portfolio positioned to fall with them. What matters each week is whether a market moved with the structure a portfolio was following.

The week ahead is therefore about whether the Barometer resumes its recovery toward 55% or continues to weaken from its current reading of 50%. Grains remain the sector to follow: Rough Rice and Oats are at new highs and Soybean Meal is close to its own, while Corn’s break below its August level has run for two weeks. Copper has returned toward its high, and the question is whether it clears it while Palladium sets new lows. The US Dollar Index has extended above its summer high, with EUR and CHF at new lows. Bonds have paused at their lows, and whether the pause becomes a bounce or the declines resume matters for the reading as much as for the sector. Orange Juice has made its second sharp counter-trend rise in three weeks inside a decline that has run most of the year. And October has reached its second week with the SG Trend Index at +0.28% for the month. In each case the question is the same one it always is: does the structure persist? For trend followers, up or down was never the central question. Persistence was. The opportunity was directional, but not directionally biased.

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List of Resources used in the Week in Review

Important Disclaimers

This document is directly solely to Accredited Investors, Qualified Eligible Participants, Qualified Clients and Qualified Purchasers. No investment decision should be made until prospective investors have read the detailed information in the fund offering documents of any manager mentioned in this document. This document is furnished on a confidential basis only for the use of the recipient and only for discussion purposes and is subject to amendment This document is neither advice nor a recommendation to enter into any transaction. This document is not an offer to buy or sell, nor a solicitation of an offer to buy or sell, any security or other financial instrument. This presentation is based on information obtained from sources that TopTradersUnplugged (“TTU”) (“considers to be reliable however, TTU makes no representation as to, and accepts no responsibility or liability for, the accuracy or completeness of the information. TTU has not independently verified third party manager or benchmark information, does not represent it as accurate, true or complete, makes no warranty, express or implied regarding it and shall not be liable for any losses, damages, costs or expenses relating to its adequacy, accuracy, truth, completeness or use.

All projections, valuations, and statistical analyses are provided to assist the recipient in the evaluation of the matters described herein. Such projections, valuations and analyses may be based on subjective assessments and assumptions and may use one among many alternative methodologies that produce different results accordingly, such projections, valuations and statistical analyses should not be viewed as facts and should not be relied upon as an accurate prediction of future events. There is no guarantee that any targeted performance will be achieved Commodity trading involves substantial risk of loss and may not be suitable for everyone

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In reviewing this document, it should be understood that the past performance results of any asset class, or any investment or trading program set forth herein, are not necessarily indicative of any future results that may be achieved in connection with any transaction. Any persons subscribing for an investment must be able to bear the risks involved and must meet the suitability requirements relating to such investment. Some or all alternative investment programs discussed herein may not be suitable for certain investors This document is directed only to persons having professional experience in matters relating to investments. Any investment or investment activity to which this document relates is available only to such investment professionals. Persons who do not have professional experience in matters relating to investments should not rely upon this document.

This document and its contents are proprietary information of TTU and may not be reproduced or otherwise disseminated in whole or in part without TTU’s prior written consent.

This document contains simulated or hypothetical performance results that have certain inherent limitations AND SHOULD BE VIEWED FOR ILLUSTRATIVE PURPOSES. Unlike the results shown in an actual performance record, these results do not represent actual trading. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR INVESTMENT ACCOUNT.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM OR OTHER ASSET.

There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. No representation is being made that any investment will or is likely to achieve profits or losses similar to those being shown.

by

Many people treat uncertainty as something they should eliminate before they can get on with things. In investing, that instinct can cause significant damage. Ironically, investing works because markets are unpredictable.

If markets were predictable, just about every asset would carry the same return, the risk-free rate, and nothing more. Stocks pay more than bonds over time precisely because nobody can promise you they will, not even the government or the fund manager who has been beating the market for a decade. If that risk disappears, so does the reward.

David Booth, who worked for 45 years building Dimensional Fund Advisors around this idea, puts it this way: uncertainty is not something to eliminate from your investing life. It’s something to manage.

So much of investing anxiety comes from treating an unpredictable process as if it should behave predictably. You didn’t know twenty years ago where you would be today, and you will not know twenty years from now either. That doesn’t stop you from planning a life, and it shouldn’t stop you from planning a portfolio.

Even Professional Investors Struggle to Beat the Market

The people who are paid the most to beat the market typically don’t, especially once you account for fees. With fees in the picture, the average professional manager underperforms a simple, low-cost index over long stretches of time. 

This is no knock on their intelligence, work ethic, or skill. It’s simply a function of how markets work. Prices move because sophisticated buyers and sellers are constantly competing to find mispricings, and that competition is what makes mispricings rare and short-lived.

So their effort is worthless? No, not necessarily.

It’s that the kind of effort that works, including deep research, broad diversification, and patient structuring, looks nothing like the kind of effort that gets attention: bold calls, hot picks, and timed exits. The boring version wins more frequently, over more decades, for more individuals. It just doesn’t make for a good headline, which is part of why so few people ever hear about it.

Learn to Separate Useful Investment Information From Market Noise

There’s more financial data available to the average person today than any professional had access to a generation ago. Phones deliver a constant stream of prices, forecasts, and hot takes before breakfast. In many ways, it’s an unhealthy overload of information for many people. It’s simply too much, and almost none of it is meaningful information that informs any kind of decision.

A piece of information is meaningful if it should change what you do with your portfolio. A change in your income, your family situation, your time horizon, your tolerance for risk, these are meaningful. An opinion about next quarter's inflation number or a prediction about where interest rates go from here, these are almost always just interesting. They make for a good conversation, but they rarely make good reasons to touch your portfolio.

The discipline worth building into your approach is not about reading less or tuning out day-to-day price moves. It is about asking, every time something crosses your desk, whether it actually changes what you should do. If the answer is no, file it under interesting and move along. Most things belong there, and learning to sort them quickly is a valuable skill.

Plan, Don't Predict

A phrase that captures this philosophy is “Plan, don't predict.” It sounds simple because it is, but simple is not the same as easy, as the great Charlie Munger said repeatedly of his own investing strategy that made him one of the wealthiest people in the world.

Predicting is seductive, and it offers the feeling of control. Planning offers something less exciting and more durable, a process you can trust even when you have no clue what happens next. A prediction is a bet on a single outcome. A plan is a structure made to survive a wide range of outcomes, including the ones you can't see coming.

Flexibility Matters in a Long-Term Investment Strategy

Flexibility has economic value when it comes to investing. Rigid plans break when circumstances change. Plans made with some give in them, room to update assumptions as new evidence arrives without abandoning the underlying approach, tend to hold up better over long periods. 

So being willing to challenge your own conclusions, even ones that have served you well for years, is not a weakness in a strategy. It’s what keeps a strategy alive long enough to matter as conditions change around it… because they inevitably will. 

Long-Term Investors Have Reason to Be Optimistic

Optimism in investing does not mean assuming everything will work out. It means looking at the long history of markets and recognizing that economies have repeatedly recovered from recessions, wars, financial crises, and other major disruptions.

That history does not tell investors what will happen next, but it does offer a useful perspective. Markets will go through difficult periods, and some of them will be severe. Yet over long stretches of time, businesses adapt, economies recover, and growth eventually resumes.

The practical lesson is to focus on the things you can control. That includes how much risk you take, how diversified you are, how long you stay invested, and whether your portfolio is built to withstand difficult periods. Build a plan that does not need every outcome to go your way.

DISCLAIMER: This article is based on a conversation from Top Traders Unplugged and reflects themes, ideas, and perspectives discussed during the episode. The views expressed are those of the guest and participants in the conversation and should not be interpreted as investment advice or as the official views of Top Traders Unplugged.

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