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“Glimmers of Strength, Fragile Breadth”

This Week in Trend – 05 September 2025

Welcome back to This Week in Trend, your weekly pulse check on global futures and the state of systematic trend following.

The TTU Trend Barometer held flat at 30 percent, unchanged from last week, leaving conditions firmly in very weak territory. Glimmers of strength appeared in metals, crypto, and bonds, while soft commodities, grains, and energy continued to drag. Breadth remains fragile—progress comes in sparks, not in waves.

SG Trend Index Performance

  • Month-to-date (as of Sep 5): +0.60%
  • Year-to-date: -7.00%
    (Previous week: +2.89% MTD | -7.43% YTD)

The SG Trend Index began September in positive territory, up +0.60% after August’s strong finish. YTD losses eased slightly from -7.43% to -7.00%, showing tentative signs of repair. Metals and bonds provided early support, while softs and energy continued to weigh on portfolios.

TTU Trend Barometer

  • Current reading: 30 percent – Very Weak
  • Previous reading: 30 percent
  • 10-day rate of change: Rising weakly

Breadth failed to improve, stuck at 30 percent, with fewer than a third of markets showing trend strength.

“At thirty, the floor remains fragile – glimmers appear, but breadth refuses to improve.”

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

Weekly Asset Class Snapshot

Source: Finwiz.com

Asset Class Breakdown – Uneven Glimmers

  • Crypto: +3.02% – Bitcoin rebound led the week.
  • Metals: +1.14% – Gold and silver extended rallies, copper slipped.
  • Bonds: +0.86% – Long bonds surged, providing diversification.
  • Equities: +0.29% – Mixed global picture, Nikkei and Russell firmer.
  • Currencies: -0.10% – Rangebound majors, no conviction.
  • Energy: -0.46% – Crude and products weaker, nat gas steady.
  • Meats: -0.74% – Hogs gained, cattle softened.
  • Grains: -2.07% – Soybeans, wheat, and canola pressured lower.
  • Volatility Index: -2.33% – VIX fell, easing hedging demand.
  • Soft Commodities: -2.98% – Sugar, coffee, and cocoa collapsed.

Performance Highlights – This Week’s Market Leaders & Laggards

Top Market Movers

Top Gainers

  • Gold: +3.52% – Precious metals strength broadened.
  • Bitcoin: +3.02% – Crypto bounced strongly.
  • 30-Year Bond: +2.05% – Long duration surged.
  • Silver: +1.93% – Reinforced metals leadership.
  • Nikkei 225: +1.88% – Outperformed global peers.

Top Losers

  • Orange Juice: -5.05% – Steep reversal.
  • Sugar: -4.83% – Continued collapse in softs.
  • Coffee: -3.35% – Declines spread across the complex.
  • Cocoa: -3.20% – Sustained downside pressure.
  • WTI Crude: -3.19% – Energy weakness persisted.

Portfolio View – Positioning and Impact

  • Metals: Gold and silver longs provided strong ballast; copper was softer.
  • Crypto: Bitcoin bounce contributed rare positive outlier exposure.
  • Bonds: Long duration gains reinforced diversification benefits.
  • Equities: Mixed—Nikkei and Russell higher, DAX and Euro Stoxx lagged.
  • Energy: Crude and products weakened; nat gas steady.
  • Softs: Heavy drag from sugar, coffee, cocoa, and lumber.
  • Grains: Soybeans, wheat, and canola extended losses.
  • Meats: Hogs supported, cattle weaker.
  • Currencies: Flat, little directional conviction.
  • Volatility: VIX decline dampened breakout conditions.

Final Reflections – Glimmers of Strength, Fragile Breadth

This week offered hints of improvement: metals, Bitcoin, and bonds provided upside sparks, while equities showed selective resilience. Yet the broader landscape remained fractured, with softs, grains, and energy dragging portfolios back.

The TTU Barometer holding at 30 percent underscores how weak breadth remains. For trend followers, the message is clear: outliers still appear, but they must be captured in a framework designed for fragility. Robust portfolios endure not through broad participation, but by letting rare winners shine against a backdrop of cracks.

 

 

 

Get your FREE copy today!

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

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.

by

  • The era of easy money is over, with capital scarcity and soaring debt reshaping the way markets operate.
  • Louis Gave warns that fiscal dominance, fragile safety nets, and shifting geopolitics demand a new playbook for investors.
  • Emerging markets like India and Mexico could be the surprise winners in this new global order.

For forty years, investing had a simple rhythm. Each downturn was met with lower interest rates, more liquidity, and a renewed confidence that central banks could smooth the ride. Investors learned that patience was rewarded and that declines were temporary, but that rhythm might be breaking.

We’re moving into a world where capital is scarce, deficits matter, and governments are competing with one another for money. Louis-Vincent Gave, Founding Partner & CEO at Gavekal, calls this the age of fiscal dominance, when the weight of public debt dictates what central banks can and cannot do. It sounds like a policy debate, but it’s much more significant because it alters the foundation of how markets operate and how portfolios must be constructed.

The world of abundance is fading, and the world of scarcity is emerging. That transition is showing up in ways that are already reshaping the economy.

A Fiscal Delusion About to Snap

The United States is living through what feels like a free party. Government borrowing has soared, and for a time, it seemed painless. Like tequila shots, it feels good until it doesn’t. Trillions of dollars in new debt were absorbed because investors assumed the old rules applied: the Fed would keep yields low, the dollar would stay strong, and buyers would always show up.

But the math is harder now. Debt is rising faster than growth, and interest costs are eating a larger share of tax revenue. Fiscal dominance means that the market, rather than the Fed, will set the price of money. When the bond market decides it needs a higher yield, there may be no easy escape route. The moment the delusion snaps, it will not be a slow adjustment. It will be sudden and jarring, like waking up the morning after the party.

Tariffs Quietly Squeezing the Job Engine

Inflation and interest rates dominate headlines, but another force is gnawing at the U.S. economy. Tariffs and trade restrictions are quietly freezing the construction sector. Construction is more than buildings and bridges. It’s one of the most labor-intensive parts of the economy, employing millions of workers across trades.

When projects stall because steel or parts cost more, it has ripple effects. Jobs freeze, small businesses delay expansion, and uncertainty spreads. Policy designed to protect industries is quietly suffocating the very job engine the economy relies on. It’s not yet obvious in the data, but markets often turn before the numbers catch up.

All the Lights Are Green, Yet the Engine Is Cracking

By traditional measures, the economy should be roaring. Capital is still relatively cheap compared to historical levels, energy prices are contained, and deficits are large enough to stimulate demand. Almost every light on the dashboard is green.

Yet the engine might be sputtering: Productivity growth is weak, small businesses report stress, and many households feel squeezed. Louis Gave argues that the old models are broken because they assume policy follows logic. Today, policy follows politics, and markets, trained to expect one kind of response, may find themselves in a different game altogether.

The AI Boom and the Risk of a Historic Bust

The last two years have added roughly $6 trillion in market value to companies tied to artificial intelligence and cryptocurrency. Nvidia, the emblem of AI’s promise, became one of the most valuable companies in history. Investors piled in with the confidence of people who believe this technology will reshape the world.

It may. However, if reality lags behind the narrative, history offers a guide. The dot-com bubble was not wrong about the internet. It was wrong about timing and profitability. If AI disappoints on either front, the correction will not just dent a few companies. It could erase years of gains and echo the pain of 2008, this time focused on the most hyped sector of our era.

The Dollar’s Last Safety Net

April 2025 produced a shock that went largely unnoticed. U.S. stocks, bonds, and the dollar all declined simultaneously. For decades, investors relied on the idea that when one struggled, the others would provide cover. That correlation shattered.

Louis Gave says this is what an emerging market crisis looks like. In emerging markets, when investors lose confidence, everything tends to sell off together. The world has just witnessed this dynamic in the U.S., the issuer of the world's reserve currency. If the safety net of diversification fails, investors must rethink not only portfolios, but assumptions about stability itself.

China’s Strategic Reordering of Power

It’s easy for the West to describe China as slowing: Growth rates are lower than in past decades, and domestic property markets remain fragile. Yet beneath the headlines, China is pursuing a deliberate strategy.

It’s exporting aggressively to the emerging world. It’s providing cars, batteries, and infrastructure at prices competitors struggle to match. It’s financing much of this through Hong Kong, reducing reliance on the U.S. dollar. The narrative of a weak China misses the point. China is redefining the map of global power and creating new dependencies across Asia, Africa, and Latin America. The long-term investment consequences of that shift are just beginning.

The Next Spark for Inflation

Energy prices today look tame. Oil trades within a comfortable range. Gasoline is not spiking at the pump. Investors have relaxed.

But the underlying picture is fragile. A decade of underinvestment in supply has resulted in tight production capacity. Meanwhile, demand from the global south is rising as billions of people improve their living standards. If oil surges because demand outpaces supply, inflation will not just return. It could come back with force, testing central banks and portfolios alike.

Emerging Markets Return to the Stage

Amid capital scarcity, not all regions are equal. Countries with credible fiscal policy, demographic strength, and improving productivity can attract capital and grow. Those without will struggle.

Louis Gave sees emerging markets as the overlooked winners. India and Mexico stand out. Both benefit from younger populations, favorable geography, and supply chains that are shifting away from China. For decades, investors treated developed markets as the safe core and emerging markets as the risky satellite. That assumption may invert. The trade of the decade could be in places investors have long underweighted.

What This Means for Portfolios

The list of shocks is not just a collection of scary headlines. Each one is a symptom of a deeper shift: from a world of abundant capital to a world where capital is scarce and governments must compete for it.

In that environment, portfolios built for the last forty years are misaligned. Bonds are no longer a one-way bet. Real assets tied to scarcity, like commodities and infrastructure, take on new appeal. Equities that rely on leverage may falter, while those with strong balance sheets and self-funding ability stand out. Diversification can no longer assume that developed markets all share the same risk profile. Emerging markets may offer not just growth, but resilience.

The Need to Think Differently

The hardest part of investing in a new regime is not the math. It is the mindset. For decades, investors were trained to believe that the Fed would save them. Rate cuts were the Pavlovian response to weakness. That habit is deeply ingrained.

However, if fiscal dominance means central banks are constrained, waiting for the old playbook is costly. Like a family that has always refinanced its mortgage at three percent, it is tempting to assume relief will come. If the renewal notice arrives at six percent and stays there, the habit itself becomes the risk.

Howard Marks has written that the biggest risks are often the ones investors dismiss because they feel unfamiliar. Morgan Housel reminds us that behavior, not analysis, often drives results. Put those together, and the lesson is clear: the unfamiliarity of fiscal dominance is exactly why it is dangerous.

The last era’s core truth was that interest rates would fall. The core truth of this era may be that capital is scarce, and governments compete for it just like companies do. Recognizing that shift is not about fear. It is about adaptation.

For investors willing to see the change, the next generation of returns will not come from clinging to the past, but from embracing the discipline of scarcity.

This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up for our Newsletter or subscribe on your preferred podcast platform so that you don't miss out on future episodes.

by

“Fragile Floor, Outliers Fade”

This Week in Trend – 29 August 2025

Welcome back to This Week in Trend, your weekly pulse check on global futures and the state of systematic trend following.

The TTU Trend Barometer eased to 30 percent, down from last week’s 32, leaving conditions firmly in “very weak” territory. Breadth remains thin. A few markets delivered strong moves—natural gas, hogs, and precious metals—but broader participation faded. Crypto, softs, and equities weighed heavily, reminding us that dispersion cuts both ways.

SG Trend Index Performance

  • Month-to-date (as of Aug 29): +2.89%
  • Year-to-date: -7.43%
    (Previous week: +1.74% MTD | -8.46% YTD)

August closed in positive territory, lifted by energy, metals, and livestock trends. Still, the YTD drawdown remains steep, reflecting how isolated outliers cannot offset weakness across the broader complex.

TTU Trend Barometer

  • Current reading: 30 percent – Very Weak
  • Previous reading: 32 percent
  • 10-day rate of change: Rising weakly

At just 30 percent, fewer than a third of markets show medium-to-strong trend strength. The floor is fragile.

“At thirty, the floor is fragile—and the roar of outliers has faded into scattered whispers.”

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

Weekly Asset Class Snapshot

Source: Finwiz.com

Asset Class Breakdown – Reversals and Continuations

  • Meats: +1.91% – Cattle and hogs extended clean upward trends.
  • Metals: +1.20% – Silver and gold surged; copper steadied.
  • Bonds: +0.07% – Flat to positive, steady diversification.
  • Currencies: +0.16% – Majors quiet, USD rangebound.
  • Volatility Index: +0.31% – VIX edged higher, reversing last week’s crush.
  • Grains: -0.57% – Corn, wheat, and oats gained, soybeans mixed, canola weak.
  • Energy: -0.66% – Nat gas rallied, but crude products dragged.
  • Soft Commodities: -1.37% – Cocoa, cotton, lumber, and sugar fell; coffee gained modestly.
  • Equities: -0.99% – US indices softened, with Nasdaq and Nikkei hardest hit.
  • Crypto: -7.91% – Bitcoin collapse drove the week’s biggest losses.

Performance Highlights – This Week’s Market Leaders & Laggards

Top Market Movers

Top Gainers

  • Natural Gas: +7.71% – Explosive rebound from deep lows.
  • Lean Hogs: +4.17% – Meats complex extended gains.
  • Rough Rice: +3.25% – Bounced sharply after prior week’s collapse.
  • Silver: +3.03% – Precious metals strength broadened.
  • Gold: +2.86% – Another week of steady buying.

Top Losers

  • Ethanol: -10.14% – Steep collapse capped the energy complex.
  • Bitcoin: -7.91% – Heavy downside break in crypto.
  • Lumber: -6.66% – Continued structural weakness.
  • Soybean Oil: -5.97% – Oils complex under pressure.
  • Canola: -5.85% – Agricultural weakness widened.

Portfolio View – Positioning and Impact

  • Energy: Nat gas longs dominated, crude steady, but products and ethanol dragged.
  • Metals: Gold and silver strong; palladium lagged.
  • Grains: Corn and wheat gains offset soy oils weakness.
  • Softs: Coffee firmed, but cocoa, lumber, cotton, and sugar dragged.
  • Meats: Long cattle and hogs remain portfolio leaders.
  • Bonds: Provided modest, stable diversification.
  • Equities: Global indices softened, led by Nasdaq (-1.3%) and Nikkei (-1.9%).
  • Currencies: Quiet week, no conviction shifts.
  • Crypto: Bitcoin losses offset commodity strength.
  • Volatility: VIX ticked higher, easing pressure on breakouts.

Final Reflections – Fragile Floor, Outliers Fade

This week was a quieter study in fragility. Last week’s roar of coffee and cattle gave way to muted outliers. Natural gas and metals offered strength, but crypto, softs, and equities dragged portfolios back. With the TTU Barometer at 30 percent, breadth remains absent.

For trend followers, the lesson is timeless: robust portfolios cannot rely on breadth in weak environments—they survive by catching the rare outliers that persist, even when the floor beneath remains fragile.

 

 

 

Get your FREE copy today!

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

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.

by

  • The VIX has long been seen as the market’s fear gauge, but in reality, it's a complex blend of positioning, speculation, and structural forces.
  • The Cboe’s new decomposition tool breaks it all down, helping traders see what’s really moving the market.
  • This framework equips market participants with insights that can sharpen their strategies and improve decision-making

Volatility has always been the market’s heartbeat. You can watch prices tick up and down all day, but the real pulse is hidden beneath the surface in how traders price risk. For decades, the VIX Index has been Wall Street’s go-to shorthand for that pulse. It’s usually called the “fear gauge,” a single number that supposedly captures how worried investors are about the future.

That nickname is catchy. It’s also incomplete.

The VIX is not merely a reflection of fear. It’s a blend of expectations, positioning, and hedging activity, all woven into the options market. Sometimes it moves higher because investors are scared of a sharp sell-off. Other times it climbs because traders are betting on a rally. Without a way to pull apart these influences, you are left with a blurry picture.

That is the problem Cboe’s new VIX decomposition tool aims to solve. By breaking the index into its core components, it offers traders and investors a much sharper view of what’s actually driving volatility.

Why the VIX Alone Can Be Misleading

On the surface, the VIX measures the market’s expectation of how much the S&P 500 will move over the next 30 days. The higher the number, the bigger the anticipated swings. Simple enough.

BUT… that number is an average of many moving parts. It blends together downside protection demand, upside speculation, and the natural mathematical effects of how options are priced. Without separating those factors, a spike in the VIX could be interpreted as panic when it’s actually something else entirely.

Consider a day when the S&P 500 jumps sharply. Common sense might tell you the VIX should fall because investors feel less fearful. Yet the opposite can happen if traders are scrambling to buy Call options to chase the rally. In that case, the VIX is rising because of demand for upside exposure, not because anyone is bracing for disaster.

This is why serious volatility traders have long wanted a way to break the index into its underlying drivers.

Breaking the VIX Into Pieces

The decomposition framework takes the VIX and dissects it into distinct building blocks:

  • Expected move: How much of the change in the VIX comes simply from the S&P moving up or down along the existing volatility surface.
  • Parallel shift: A broad repricing of options across strikes, often after a shock when traders raise premiums for both Puts and Calls.
  • Skew: Differences in pricing between out-of-the-money Puts and Calls, which can reveal whether traders are leaning bearish or bullish.
  • Convexity: Pricing changes in deep out-of-the-money options, which often show demand for protection against extreme moves.

With these pieces, you can answer questions like: Is the VIX rising because people want downside hedges? Because they are buying upside? Or because option sellers are lifting premiums across the board after a shock? The answers can change how you trade, hedge, or even interpret the broader market mood.

Positioning Matters More Than You Think

Markets are not only about fundamentals. They are about positioning. Who owns what, who is short, and who is desperate to get out of a trade can all drive prices in ways that have little to do with economic data or corporate earnings.

The VIX decomposition tool can expose these positioning dynamics. For example, in some sell-offs, the VIX barely budges because traders were already heavily hedged. When bad news hits, there is no rush to buy protection, so volatility stays muted. In other cases, an unexpected shock forces investors to scramble for options, sending the VIX soaring even if the underlying decline is modest.

This is where volatility becomes reflexive. Large shifts in option positioning can push the S&P itself higher or lower as dealers hedge their books. If dealers are short Calls, they may have to buy stocks as prices rise, fueling the rally. If they are short Puts, they may have to sell as prices drop, accelerating the decline. Watching the volatility surface is one of the most effective ways to detect these forces.

Lessons From History

History offers plenty of examples where understanding volatility’s drivers mattered more than the headline number.

Take the 2015 yuan devaluation. The surprise move by China triggered a sharp but short-lived spike in volatility. Option demand surged across the board because the event was unexpected, catching traders off guard.

Then there was “Volmageddon,” the February 2018 spike in volatility that wiped out short volatility strategies. Volatility-linked products magnified losses and forced massive covering of short volatility positions. The VIX spiked on positioning, not on a deep market decline.

More recently was the 2022 bear market. Despite a ~27 percent peak-to-trough drop in the S&P 500, the VIX stayed relatively calm because investors had already positioned themselves for bad news. And, in several cases since then, the VIX has risen during strong equity rallies because traders piled into calls, driving up option premiums.

In each case, a decomposition would have shown whether the driver was downside fear, upside speculation, or a mechanical shift in the volatility surface.

The Zero-DTE Factor

One of the biggest changes in recent years is the explosive growth of zero-day-to-expiration (0DTE) options. These contracts, which expire the same day they are traded, now account for roughly 60 percent of SPX option volume.

0DTE options are cheap, flexible, and popular with a wide range of traders. Some use them for short-term directional bets. Others sell them systematically to generate income. Because they settle so quickly, they can simplify certain volatility plays and allow traders to express very specific views about where the market will close today.

Far from being just a speculative tool, 0DTE options can help market makers manage risk and provide liquidity in longer-dated contracts. Their growth adds another layer to understanding volatility, since large flows in same-day options can ripple through the broader options market.

Why This Matters for Traders and Investors

For a long time, volatility analysis was about reading one number and making a judgment call. The VIX was high, so fear must be elevated. The VIX was low, so complacency must be setting in.

That kind of binary thinking is not enough anymore. With the ability to break the VIX into its components, you can tailor your strategy to the actual forces at work.

If the spike is coming from downside put demand, hedges might be expensive, and you might look for alternatives. If it’s driven by upside call buying, that could be a sign of speculative froth or a potential short squeeze. If the entire volatility surface is lifting after a shock, you might expect elevated premiums to persist for a while.

The right interpretation can mean the difference between putting on a winning hedge and wasting money on protection you did not need.

Looking Ahead

The Cboe plans to make the VIX decomposition tool available for regular use, along with historical snapshots of past volatility events. Having real-time and historical context will allow traders to see patterns and anticipate how the market might react under similar conditions.

For those who trade volatility directly, the benefits are obvious. For long-term investors, the insights are still valuable. Knowing whether volatility is being driven by structural positioning, macroeconomic shocks, or speculative activity can help you decide when to stay the course and when to prepare for turbulence.

Final Thought

Howard Marks often writes about the importance of “second-level thinking” in investing. Morgan Housel reminds us that markets are driven by people’s behavior as much as by fundamentals. The VIX decomposition tool is a way to bring that second-level thinking into volatility analysis. It moves you beyond the headline number and into the deeper forces shaping market risk.

Volatility will always be part of the market’s heartbeat. Now there is a better way to listen.

This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up for our Newsletter or subscribe on your preferred podcast platform so that you don't miss out on future episodes.

by

“Fragile Floor, Outliers Roar”

This Week in Trend – 22 August 2025

Welcome back to This Week in Trend, your weekly pulse check on global futures and the state of systematic trend following.

The TTU Trend Barometer ticked slightly higher to 32 percent, still firmly in “weak” territory. Beneath the fragile surface, however, a handful of markets roared — coffee, cattle, crude oil, and small caps each delivered outsized trends. Bonds and precious metals provided steady ballast, while natural gas, rice, and cocoa collapsed. This was not a week of broad participation, but one where outliers again wrote the story.

SG Trend Index Performance

  • Month-to-date (as of Aug 22): +1.74%
  • Year-to-date: -8.46%
    (Previous week: +1.81% MTD | -8.39% YTD)

The SG Trend Index dipped slightly versus last week’s pace but stayed positive for August. The YTD drag remains heavy, yet strong softs, cattle, and US equities are lifting returns at the margin.

TTU Trend Barometer

  • Current reading: 32 percent – Moderately Weak
  • Previous reading: 27 percent
  • 10-day rate of change: Rising weakly

At just 32 percent, fewer than a third of markets show medium-to-strong trend strength. The backdrop is fragile. Yet, the week proved that even from weak foundations, runaway outliers can still dominate portfolios.

“At thirty two, the floor may be fragile — but the roar of outliers shakes the market.”

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

Weekly Asset Class Snapshot

Source: Finwiz.com

Asset Class Breakdown – Reversals and Continuations

  • Meats: +3.05% – Cattle remain textbook trends, hogs rebounded.
  • Metals: +1.20% – Gold, silver, palladium all advanced; copper stabilized after prior volatility.
  • Energy: +0.80% – Crude oil and products steadied; nat gas collapsed.
  • Soft Commodities: +0.96% – Coffee surged again; cocoa and lumber dragged.
  • Equities: +0.50% – US benchmarks advanced; Russell 2000 led.
  • Bonds: +0.44% – Bid tone across the curve.
  • Grains: -0.51% – Soybeans and oil higher, wheat and oats weak.
  • Currencies: -0.12% – USD eased, majors firmed.
  • Crypto: 0.00% – Bitcoin paused near highs.
  • Volatility Index: -8.30% – VIX crushed again, easing risk backdrop.

Performance Highlights – This Week’s Market Leaders & Laggards

Top Market Movers

Top Gainers

  • Coffee: +13.11% – Explosive follow-through, week’s alpha driver
  • Feeder Cattle: +4.75% – Persistent strength
  • Gasoline RBOB: +4.15% – Product-led rebound
  • Heating Oil: +3.78% – Supported energy complex
  • Russell 2000: +3.39% – Small caps shine

Top Losers

  • Natural Gas: -10.8% – Collapse accelerates
  • Rough Rice: -8.65% – Heavy downside continuation
  • VIX: -8.3% – Volatility crushed
  • Cocoa: -5.39% – Sharp reversal
  • Oats: -2.38% – Weakness persists

Portfolio View – Positioning and Impact

  • Energy: Long crude and products supported gains, while nat gas shorts delivered strongly.
  • Metals: Gold, silver, palladium trends reinforced long allocations; copper calmed.
  • Grains: Soybeans and oil pulled portfolios higher despite weakness in wheat, oats, and rice.
  • Softs: Coffee dominated returns, cocoa a notable drag.
  • Meats: Clean long trends in cattle remain portfolio leaders.
  • Bonds: Modest, steady gains reinforced diversification.
  • Equities: US markets, particularly Russell 2000, boosted long-side exposure.
  • Currencies: Dollar weakness opened space for majors, though without conviction shifts.
  • Crypto: Bitcoin paused, trend structure intact.
  • Volatility: VIX collapse reduces breakout payoff but supports risk assets.

Final Reflections – Outliers Carry the Fragile Floor

This week was another study in contrasts. The Trend Barometer insists the floor is fragile. But above those cracks, coffee roared higher, cattle drove strong gains, and small caps surged. Bonds and metals offered quiet reinforcement. Nat gas, rice, and cocoa showed the other side of dispersion.

For trend followers, the lesson is timeless: robust portfolios thrive not by capturing every move, but by catching the few runaway outliers that roar loudest.

 

 

 

Get your FREE copy today!

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

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.

by

  • GDP says the economy is growing, but your daily life might tell a different story, and that disconnect matters.
  • Economist Diane Coyle unpacks why our most trusted economic number leaves out the most valuable parts of modern life.
  • From unpaid labor to digital tools we rely on, this blog reveals what GDP misses and why a new way of measuring progress is long overdue.

It starts with a strange paradox: You read the headlines: “GDP is up.” You look around: wages stagnant, housing unaffordable, services crumbling, your groceries cost 30% more than two years ago. Something doesn’t add up.

For decades, GDP has been the scoreboard of economic success. A rising GDP was supposed to mean progress, prosperity, and security. But more and more, it feels like GDP is running victory laps while the rest of us are stuck in traffic. Why? According to economist Diane Coyle, it's because we’re still measuring the 2025 economy with tools built for 1945.

What the Numbers Don’t See

Gross Domestic Product was created in the wake of the Great Depression and World War II. The world back then was industrial, tangible, and you could measure productivity by counting how many tons of steel or yards of fabric rolled off a factory line.

Since then, the global economy has dematerialized. Today, some of the most valuable things we use have no price. Gmail is free, Google Maps is free, and open-source software powers much of the web, yet isn’t bought or sold. Millions of people contribute to these systems with no paycheck attached, no invoice generated, no economic statistics updated.

It’s not only digital products. The modern consumer is now also the worker. You scan your own groceries, you install your own software, you troubleshoot your WiFi. Tasks once handled by paid employees are sometimes your responsibility. The transaction disappears from GDP, but the work still happens. In a way, we are all unpaid interns in the economy of convenience.

The Mirage of Growth

On paper, we’re growing. But what’s really happening is substitution.

An algorithm replaces a travel agent. A YouTube video replaces a lecture. An AI bot replaces a customer service rep. GDP shrinks or stagnates, not because less is being done, but because less is being paid for.

Take cloud computing. A government agency used to buy servers, hire staff, and build in-house IT teams. That spending showed up as investment in national accounts. Today, that same agency pays a subscription to AWS or Azure. It’s counted as an expense, not investment. The underlying infrastructure and services may be far superior, but GDP says it’s less.

Or consider medical innovation. A $2,000 monthly drug replaced by a $55 alternative is a triumph for science and society. But in the GDP ledger, it’s a loss. Less money spent, therefore less economic activity.

The more efficiently we solve problems, the more progress looks like contraction. This is why GDP no longer reflects the real economy.

When the Invisible Becomes the Foundation

We live in an era where the most important things are increasingly invisible: data, code, ecosystems, trust.

GDP has always been about flows, including how much money moves in a given period. But it tells us nothing about stocks, the assets we hold, the systems we rely on, the capacities we are building or destroying. A healthy society depends not only on what it earns, but on what it owns. Not just income, but infrastructure. Not just transactions, but trust. Yet we barely measure these things.

A forest filters air, stabilizes soil, and regulates climate. It’s priceless until it's priced, but GDP only sees the timber after it’s cut down. A teacher trains thousands of minds over decades. Her impact compounds, but GDP counts her salary, not her influence. A nation’s social fabric frays, institutional trust erodes, and rules get ignored. GDP climbs anyway, even as the scaffolding underneath crumbles. In this way, we are navigating with a broken compass.

A Better Map

What if instead of one number, we had a dashboard? What if we tracked not just output, but the condition of our inputs? Imagine an economic balance sheet with six core assets:

  1. Physical capital – buildings, machines, infrastructure
  2. Human capital – skills, education, health
  3. Natural capital – air, water, biodiversity
  4. Social capital – institutions, trust, cohesion
  5. Knowledge capital – ideas, research, data
  6. Financial capital – money and credit systems

Each of these fuels future prosperity, each can be depleted or expanded, and each deserves to be measured.

Right now, we track financial capital religiously. Every quarter, every decimal. But natural capital? Human capital? Social capital? They live mostly in footnotes or academic reports, often with no dollar value attached.

You can’t manage what you don’t measure, and if we continue to ignore these invisible foundations, we’ll wake up one day wondering where all the progress went.

Time Is the Missing Variable

There’s another element GDP doesn’t see: time. Not economic time, but human time.

What does it mean when your internet is faster, but you spend more hours fixing it? When groceries are cheaper, but you spend Saturday night talking to a chatbot about your refund? When services are automated, but the burden of labor shifts to the customer?

This “time tax” is real, and rising. We’re paying in hours instead of dollars. But those hours are valuable: They are the currency of our lives. A modern economic system should account for time spent, time saved, and time stolen. It should ask not only “how much did we produce?” but “how did we spend our days?” In the end, our lives are made of time, not money, especially now.

The Danger of False Certainty

The power of GDP lies in its simplicity. One number to rule them all.

But that’s also its danger. Because when the number keeps rising, it creates a false sense of security, and it becomes easy to believe that things are fine. That the economy is working, that progress is happening…until the illusion breaks, voters revolt, workers strike, and institutions fracture. Then we realize that the scoreboard was broken all along.

Fixing it won’t be easy. The new tools are harder to build, the new data is harder to collect, and the categories are harder to define. But the alternative is flying blind, or worse, trusting a map that no longer matches the terrain.

Progress Beyond the Dollar

We have never had more ways to create value. We can solve diseases with data, educate billions at scale, and share knowledge across the globe instantly. These are such powerful achievements unfolding in daily life, but these breakthroughs are often invisible to traditional metrics.

We need new measurement systems not because the old ones are evil, but because the world they were built for no longer exists. Economic statistics should reflect what we value. Today, we value well-being, sustainability, time, fairness, trust, and opportunity.

If GDP doesn’t capture that, then GDP isn’t telling us the whole story. So, it’s time to stop confusing a growing number with real progress and start counting what really matters.

This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up for our Newsletter or subscribe on your preferred podcast platform so that you don't miss out on future episodes.

by

“Weak Tide, Big Waves”

This Week in Trend – 15 August 2025

Welcome back to This Week in Trend, your weekly pulse check on global futures and the state of systematic trend following.

The TTU Trend Barometer fell further into ‘very weak’ territory. Yet this masked a week of standout trends. Coffee exploded higher, soybeans joined the rally, and equities pushed on with renewed strength. Metals and energy struggled, bonds gave back ground, but cattle markets trended beautifully. Volatility collapsed again, cushioning risk and fuelling selective moves.

SG Trend Index Performance

  • Month-to-date (as of Aug 15): +1.81%
  • Year-to-date: -8.39%

(Previous week MTD: +1.05% | YTD: -9.08%)

The SG Trend Index added to its gains this month, though year-to-date performance remains firmly in the red. Strength in softs and equities is providing the ballast that steadies the index.

TTU Trend Barometer: 27 Percent – Very Weak

  • Previous reading: 34 Percent
  • 10-day rate of change: Falling weakly

At just 27 percent, fewer than a third of markets show medium-to-strong trends. This is a fragile backdrop. Yet this week proved that when outliers take hold, they can dominate returns.

“At twenty-seven, the tide is out — but trend surfers still caught big waves.”

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

Weekly Asset Class Snapshot

Source: Finwiz.com

Soft commodities delivered outsized gains, equities pushed higher across major benchmarks, and cattle markets trended cleanly. Metals and energy softened, bonds eased, and currencies churned with little direction. Crypto posted small gains, while volatility continued its steep collapse.

Asset Class Breakdown – Reversals and Continuations

  • Energy: -1.06% – Brent and gasoline dragged, but natural gas rebounded modestly. Crude remains locked in a choppy downtrend.
  • Metals: -1.22% – Gold pulled back, palladium sold off hard, while platinum and copper held near recent levels after sharp reversals.
  • Equities: +1.57% – Global indexes advanced. Nikkei and Russell 2000 showed renewed momentum, Nasdaq cooled but held trend.
  • Soft Commodities: +2.67% – Coffee broke out spectacularly, soybeans and cocoa joined the move, OJ extended its rebound.
  • Grains: +0.67% – Soybeans rallied sharply, corn and wheat added support, rice lagged.
  • Meats: +1.15% – Live cattle and feeder cattle remain picture-perfect uptrends, lean hogs recovered.
  • Bonds: -0.25% – Pullback across the curve, momentum softer but structure intact.
  • Currencies: -0.04% – A flat week, with mild USD softness offset by scattered FX flows.
  • Crypto: +0.56% – Bitcoin slipped slightly but broader crypto resilience preserved trend bias.
  • Volatility Index: -6.04% – VIX collapse extended, removing stress from risk markets.

Performance Highlights – This Week’s Market Leaders & Laggards

Top Market Movers

Top Gainers

  • Coffee: +11.13% – Parabolic breakout, clear leader of the week
  • Soybeans: +5.68% – Strong agricultural follow-through
  • Orange Juice: +5.16% – Recovery intact
  • Cocoa: +3.80% – Adding breadth to softs
  • Nikkei 225: +2.60% – Asian equities remain firm

Top Losers

  • Lumber: -6.44% – Persistent weakness in softs
  • VIX: -6.04% – Volatility collapse resumes
  • Gold: -3.14% – Precious metals correction
  • Palladium: -2.40% – Extending reversal from highs
  • Natural Gas: -2.24% – Energy trend under pressure

Portfolio View – Positioning and Impact

  • Energy: Systems remain short oil and gas, though chop reduces conviction.
  • Metals: Mixed signals. Gold and palladium weakness cut longs, while silver held firm.
  • Grains: Soybeans and corn strength triggered fresh long exposure.
  • Softs: Coffee’s surge was the week’s alpha driver, joined by cocoa and OJ. Lumber remained a drag.
  • Equities: Broad gains reinforce long bias, with Nikkei and Russell offering clean structures.
  • Bonds: Modest losses across the curve; long-side exposure still present but weakening.
  • Currencies: Flat week, systems unlikely to shift materially.
  • Crypto: Bitcoin consolidating near highs, uptrend intact.
  • Volatility: Further VIX collapse may reduce breakout payoffs but strengthens equity structure.

Final Reflections – Outliers Dominate the Weak Tide

This was a week of contrast. The TTU Trend Barometer’s plunge to 27 percent suggests fragility, yet coffee’s rally, soybean strength, and equity gains underline the power of outliers. Broad participation may be absent, but concentrated moves still shape performance. The lesson is clear: robust portfolios thrive by catching the few runaway trends, not by leaning on the many.

 

 

 

 

Get your FREE copy today!

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

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.

by

  • Veteran economist Steven Bell says AI, not tariffs, is the real force reshaping the global economy.
  • As the Fed quietly shifts its stance and inflation remains persistent, investors must rethink the old playbook.
  • With 50 years of market insight, Bell shares what investors should watch as inflation, tech, and politics collide.

If you want to understand where the economy is going, it helps to start by asking a deceptively simple question: What’s changing, and what’s just making more noise?

In markets, as in life, the loudest thing isn’t always the most important. In fact, the louder the signal, the more likely it is that people are reacting to it rather than thinking clearly about it.

Over the past few years, a lot of noise has come from tariffs, deficits, and political tension. But according to Economist Steven Bell, we are in the early innings of a transformation that’s not driven by trade policy or central banks, but by the way artificial intelligence is reshaping how humans work, think, and create value.

That doesn't mean tariffs don’t matter. They do. We tend to prize certainty and control, and it's usually easier to focus on things such as import taxes or inflation targets because they feel knowable. You can model and debate them. They’re on the front page.

But it’s the silent shifts, including the slow accumulation of new tools, new expectations, new ways of doing the same job, that tend to reshape the economy over time. That’s where AI enters the picture.

Productivity Is the Real Driver

The health of an economy is typically judged by its GDP, unemployment rate, or inflation numbers. But zoom out far enough and one force quietly drives long-term prosperity: productivity.

When a worker can do more in the same amount of time, society as a whole gets richer. For decades, we’ve been stuck in a productivity slump. The internet and mobile revolution brought bursts of efficiency, but they also gave us distractions and diminishing returns.

Now, AI promises to rewrite that script, not by replacing everyone overnight, but by changing what certain roles are worth. It won’t eliminate the job market, but it will redefine it. Just as spreadsheets didn’t get rid of accountants but made them more valuable, large language models and AI-powered tools will do the same for knowledge workers, creatives, and yes, investors.

We’re not far from a world in which writing an investment memo, summarizing a Fed report, or parsing through 10-Ks takes minutes instead of hours. When time collapses like that, the opportunity set expands. People can spend more time thinking, less time formatting.

The winners won’t be the loudest. They’ll be the ones who adapt fastest to this new tempo.

Tariffs Are the Smoke, Not the Fire

Now back to the noise. The return of tariffs as a tool of U.S. policy has broken a 70-year trend of liberalizing trade. For decades, global commerce moved in one direction: fewer barriers, more integration. That era is over.

But just because the pendulum is swinging doesn’t mean it will erase everything we’ve built. Tariffs will affect prices. They’ll change where some goods are made. They may even shift parts of the labor market. But they are symptoms of a broader, more emotional shift: a world that’s less certain, less trusting, and more fractured.

This isn’t a purely economic story. It’s a political one, and political stories don’t follow tidy economic models.

The deeper concern isn’t whether a 15% baseline tariff becomes standard. It’s how businesses and consumers internalize that uncertainty. If CEOs start hesitating on capital investments or pulling back on hiring, that ripples through the system faster than any policy change.

Still, companies are adapting. Japanese automakers are already cutting export prices to absorb tariffs. Semiconductor firms are bringing production stateside, albeit with overseas workers. The system bends before it breaks.

In short: tariffs are friction, AI is fuel. Don’t confuse the two.

A World of Winners and Losers

Every major shift creates imbalance. Some people get richer, some jobs disappear, some skills become exponentially more valuable while others fade into obsolescence. This is the tension that no economic forecast can resolve: progress rarely lifts everyone equally.

If you write code, analyze data, or work with language and logic, AI will likely increase your productivity. If you work in a job built around repetition or formulaic output, you may find yourself competing with a machine that doesn’t need sleep, benefits, or vacation time.

That doesn’t mean society is doomed. It just means we’re heading for redistribution of income, of opportunity, of leverage. Some sectors will boom, others will shrink. That’s not new, but the speed of change will be.

Investors should prepare for this imbalance rather than fear it. Under the surface of volatility lies opportunity. As roles shift and companies scramble to adapt, capital will chase the firms that get it right, and those companies won’t just be tech giants. They’ll be in energy, logistics, manufacturing, and healthcare, anywhere that inefficiencies can be eliminated with smarter systems.

The key is to stay curious and nimble, and to look past headlines and toward long-term implications.

The Fed Won’t Save You, But It Won’t Destroy You Either

It’s easy to fixate on the Federal Reserve. Interest rates go up, markets fall. Rates come down, risk assets rebound.

But we may be entering a stretch where the Fed is less of a driver and more of a backdrop. Inflation is cooling, wages are stabilizing, and the real story isn’t whether we get a quarter-point cut in September. It’s how central banks subtly shift their target without admitting it.

No one wants to say it out loud, but 2% inflation may quietly become 2.5%, maybe 3%. Not by policy, but by practice. That’s not a failure; it’s a recalibration.

If the world has structurally higher deficits, fragmented supply chains, and a rising cost of labor, expecting inflation to sit quietly at 2% forever is a fantasy. But as long as it’s stable and predictable, markets can adjust. The challenge, as always, will be separating signal from noise. One month’s CPI print or a surprising payroll number can stir up panic, but true trends unfold slowly and demand patience to see clearly.

What You Own Still Matters

In a climate reshaped by AI and peppered with policy shifts, portfolio construction still comes down to a few timeless questions:

  • What assets protect you in a downturn?
  • What assets grow in the long run?
  • Where are you getting paid to take risk?

Equities, especially U.S. tech stocks, still look appear to be the best long-term growth engine. Bonds, while no longer dirt cheap, still matter as a hedge, particularly if rates fall or recession risks return. For those seeking uncorrelated returns, corners of the market such as catastrophe bonds, supranationals, or emerging market debt may provide unexpected value.

The danger isn’t being wrong; it’s being inflexible. Clinging to old models, ignoring structural changes, or pretending the next decade will look like the last one. If productivity really rises, if wages reset, and if global politics continue to rewrite the rules of trade and cooperation, the smartest investors will be the most adaptable.

Final Thought: The Story Behind the Data

We often think of markets as math. But markets are stories, told in numbers.

The story right now is one of transition, from globalization to fragmentation, from human-only productivity to human-plus-machine output, and from stable inflation to a slightly hotter equilibrium. Like all stories, it has characters: politicians, central bankers, technologists, and investors. It also has themes: fear of change, hope for reinvention, anxiety about who wins and who loses.

If you want to invest well in this next chapter, don’t just watch the data. Understand the story it's telling. Then decide whether it’s noise or something new.

This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up for our Newsletter or subscribe on your preferred podcast platform so that you don't miss out on future episodes.

by

“Resilience in Pockets, Retreat Elsewhere”

This Week in Trend – 8 August 2025

Welcome back to This Week in Trend, your weekly pulse check on global futures and the state of systematic trend following.

This week highlighted a market split between strength in select assets and weakness elsewhere. Trend followers had opportunities in coffee, silver, and certain equity markets, while energy, palladium, and grains struggled. With the TTU Trend Barometer at 34 percent, the environment remains challenging, but not devoid of tradable structure.

The message is clear, focus on the surviving pools of persistence and avoid forcing trades where the tide has gone out.

SG Trend Index Performance

  • Month-to-date (as of Aug 8): +1.05%
  • Year-to-date: -9.08%

(Previous week MTD: +0.45% | YTD: -9.58%)

The SG Trend Index improved slightly, though gains remain modest. Year-to-date performance is still deep in negative territory, underscoring the challenging environment for systematic trend followers.

TTU Trend Barometer: 34 Percent – Moderately Weak

  • Previous reading: 36 Percent
  • 10-day rate of change: Falling Rapidly

At 34 percent, fewer than 35 percent of markets are showing medium to strong trend conditions. This further deterioration points to shrinking price persistence, with fewer clear opportunities for systems to latch onto.

“At thirty-four, the tide is low — only a few rock pools remain.”

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

Weekly Asset Class Snapshot

Source: Finwiz.com

Crypto, equities, and select soft commodities outperformed. Energy fell further, bonds slipped, and volatility collapsed sharply.

Asset Class Breakdown – Reversals and Continuations

  • Energy: -2.62% (Previous: +0.30%)
    Crude oil (WTI and Brent) fell again, with natural gas extending its slide. The sector is in retreat, with many systems likely reducing or exiting long exposure.
  • Metals: +0.47% (Previous: -6.89%)
    A mixed week — silver and copper gained while palladium fell sharply and platinum eased. Gold held near highs.
  • Equities: +3.32% (Previous: -3.19%)
    Strong gains across major indexes, led by the Nikkei 225 and Nasdaq 100. The rebound restored some equity trend signals.
  • Soft Commodities: +1.08% (Previous: -5.32%)
    Coffee and cocoa surged, orange juice recovered but lumber softened. The sector regained some structure.
  • Grains: -0.74% (Previous: -2.75%)
    Losses slowed, but wheat, soybeans, and corn remain under pressure. Trend signals are still weak.
  • Meats: +1.17% (Previous: +0.03%)
    Lean hogs and live cattle saw mixed action, but the sector held steady overall.
  • Bonds: -0.33% (Previous: +1.01%)
    Modest pullback across the curve, with structure holding but momentum stalling.
  • Currencies: +0.55% (Previous: -0.80%)
    Slight gains for majors against the USD, but no strong directional alignment across FX pairs.
  • Crypto: +3.39% (Previous: -3.05%)
    Bitcoin rebounded, preserving its uptrend, though volatility in the space remains elevated.
  • Volatility Index: -15.62% (Previous: +11.27%)
    A sharp drop in the VIX signalled easing market stress, potentially re-risking conditions for trend systems.

Performance Highlights – This Week’s Market Leaders & Laggards

Top Market Movers

Top Gainers

  • Coffee: +8.83% – Breakout strength, leading softs
  • Nikkei 225: +5.66% – Fresh highs
  • Silver: +4.28% – Precious metals support
  • Rough Rice: +4.00% – Agricultural surprise
  • Nasdaq 100: +3.85% – Tech-led equity rally

Top Losers

  • VIX: -15.62% – Sharp volatility collapse
  • Palladium: -6.66% – Precious metals divergence
  • Lumber: -6.11% – Softs pullback
  • Crude Oil WTI: -5.91% – Energy under pressure
  • Crude Oil Brent: -4.81% – Follow-through selling in oil

Portfolio View – Positioning and Impact

  • Energy
    Oil weakness likely pushed systems into deeper short territory. Natural gas trends remain down, with shorts holding dominance.
  • Metals
    Silver and copper provided long-side opportunities, but palladium and platinum weakened, creating internal dispersion in the metals complex.
  • Grains
    Selling pressure slowed but momentum remains negative. Systems are likely underweight or out of key contracts.
  • Softs
    Coffee and cocoa strength could re-engage long exposure. Orange juice recovery may tempt systems back in, though volatility is high.
  • Equities
    Broad equity gains, particularly in Asia and tech-heavy indexes, restored bullish setups.
  • Bonds
    Mild pullback but the long bias remains intact. Systems are likely holding reduced positions.
  • Currencies
    Mixed week without strong coordinated trends. USD weakness provided some relief for risk currencies.
  • Crypto
    Bitcoin recovery may support long exposure, though drawdown risk persists.
  • Volatility
    Collapse in the VIX eases pressure on risk assets, but may also reduce breakout opportunities for volatility strategies.

Final Reflections – Resilience in Pockets, Retreat Elsewhere

This week highlighted a market split between strength in select assets and weakness elsewhere. Trend followers had opportunities in coffee, silver, and certain equity markets, while energy, palladium, and grains struggled. With the TTU Trend Barometer at 34 percent, the environment remains challenging, but not devoid of tradable structure.

The message is clear: focus on the surviving pools of persistence and avoid forcing trades where the tide has gone out.

 

 

 

 

Get your FREE copy today!

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

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.

by

  • Farmland may not grab headlines, but it’s quietly delivered stock-like returns with bond-like calm for over three decades.
  • Technology is steadily transforming agriculture, and savvy investors are starting to take notice.
  • As global food demand surges and arable land becomes increasingly scarce, this overlooked asset is emerging as a powerful hedge against inflation and volatility.

There’s a revolution happening beneath our feet.

As investors chase the next big thing, from AI to biotech to space exploration, some are turning their attention to something far older and more essential: farmland.

It doesn’t make headlines. It won’t 5x this year. But it’s produced steady, inflation-resistant returns for decades. And according to Artem Milinchuk, founder of FarmTogether and a longtime investor in natural assets, it’s one of the most underappreciated opportunities in the modern portfolio. Let’s unpack why.

We Always Have to Eat

Let's start with the obvious: Humans will always need food. Until we become AI-powered avatars living on Mars, we’ll need calories from crops, fruits, and nuts grown on Earth. That food can only be produced on one finite resource: arable land.

This simple fact underpins the entire investment case. Farmland is a valuable asset, indeed, but also a productive and life-sustaining one. Unlike tech stocks, whose future value depends on market sentiment or product adoption, the demand for farmland is baked into the human condition. That makes it one of the few assets where long-term demand is virtually guaranteed.

The Numbers Are Boring, In a Good Way

From 1992 through 2024, U.S. farmland returned about 10.15% annually, according to the NCREIF Farmland Index. That’s only slightly below the S&P 500’s return of 10.5% over the same period, but with far less volatility (6.8% vs. 17%). 

What does that mean in plain English? It implies that farmland delivered equity-like returns with bond-like calm. The Sharpe ratio, one of the most used measures of risk-adjusted return, was 1.09 for farmland, compared to 0.44 for stocks. In investing, where most things are either high-return/high-risk or low-return/low-risk, that combination is rare. But let’s not forget that the “low vol” may be a result of less mark-to-market, like we see in Private Equity.

“Farmland Is What Gold Thinks It Is”

Gold is often touted as an inflation hedge, but its track record is mixed. In fact, many investors buy gold not as a true hedge, but as insurance against tail risks like geopolitical collapse or currency devaluation. Farmland, on the other hand, is inflation itself.

Food prices are a core component of the Consumer Price Index. When inflation rises, so does the value of the crops produced by farmland. And as input costs like fertilizer and fuel go up, those costs are often passed on to buyers, not absorbed by the farmer.

Historically, farmland has done exceptionally well in high-inflation periods. It’s tangible, productive, and scarce, three qualities that make it one of the most substantial real assets available.

The Portfolio You Can’t Trade

Farmland is illiquid by design. You can’t buy and sell it at the click of a button. But that may be one of its greatest strengths. When markets crash, liquidity is a double-edged sword. The ability to sell instantly becomes the temptation to sell irrationally. Farmland doesn’t give you that option.

It’s what behavioral economists would call a “commitment device.” You invest for the long haul. In return, you avoid panic selling, headline-driven trades, and the urge to time the market. That’s not to say farmland is immune from risk. Drought, tariffs, crop failures, and price swings all exist. However, the long-term thesis remains unchanged, and illiquidity serves as a psychological moat, keeping investors focused on what truly matters.

A $3.5 Trillion Market, 99% Untapped

Here’s a staggering stat: The U.S. farmland market is worth around $3.5 trillion. Yet institutional and high-net-worth investors have barely scratched the surface, with less than $50 billion in allocated capital, roughly 1% of the total.

Compare that to real estate or private equity, where institutional capital is not only welcomed but dominant. Why the gap? Historically, farmland has been challenging to access. Deals were fragmented, opaque, and often required deep agricultural expertise. That’s starting to change.

Firms like FarmTogether are building platforms that allow investors to access high-quality farmland through syndicates, funds, and structured offerings. New technologies, including satellite imagery, drone-based monitoring, and AI-driven underwriting, are making it easier to evaluate deals at scale. The door is finally open.

Structural Tailwinds Are Blowing

Demographics matter. In the U.S., the average age of a farmer is nearing 60. In the next 20 years, more than two-thirds of all U.S. farmland is expected to change hands.

That transition will be equally structural as it will be generational. Children of farmers aren’t always keen to continue the work. Some prefer city life, and others want to diversify their financial holdings. Many are selling.

That creates opportunity: land is coming to market, and buyers who can offer creative capital, especially those who understand the long-term economics of farming, are in a unique position to benefit. Meanwhile, global food demand is expected to increase by 70% over the next 25 years, driven by both population growth and shifting diets in emerging economies. 

At the same time, we’re losing farmland due to urbanization, rezoning, and climate stress. In the past few decades alone, the U.S. has lost over 50 million acres, an area equivalent to several small states.

The situation at hand: Rising demand and shrinking supply. 

Tech Is Quietly Transforming the Field

Investors often overlook agriculture when they think about technological progress, but farming today is a far cry from the romanticized image of a tractor and a straw hat.

Drones monitor crop health and optimize spraying. AI models analyze hundreds of pages of land title documents in seconds, smart irrigation systems use predictive algorithms to conserve water, and self-driving harvesters are already in play.

For investors, this means higher yields, more efficiency, and better data for underwriting risk. For farmers, it means a more scalable, sustainable business.

Technology won’t eliminate the complex realities of farming, but it’s reshaping how the business is run and who can participate in it.

Different Structures, Different Risks

Farmland investments can be structured in a few ways.

  • Fixed lease: A farmer rents the land at a set rate. This is the lowest risk and offers steady (but capped) income.
  • Revenue share: The investor earns a portion of the farm’s revenue. More variable, but potentially more rewarding.
  • Direct operation: The investor takes on full P&L exposure: higher upside, higher downside.

Think of it like real estate: some investors seek long-term rental income, while others aim for exposure to development risk and potential appreciation. The key is understanding your risk tolerance and diversifying across various crop types, geographies, and structures.

What to Ask Before You Invest

If you’re considering farmland, start with the basics:

  1. Who is managing the land? Experience matters. Farmland is operationally intensive and deeply local.
  2. What kind of crops and structures are involved? Different crops have different risk profiles and timelines.
  3. Where is the water? In places like California, water rights are everything. Sound underwriting includes drought scenario planning.
  4. How long is the hold period? Most deals target 8–10 years. If you need liquidity sooner, this may not be the right fit.
  5. What are the fees? Expect some combination of acquisition fees, management fees, and possibly performance-based carry.

And remember: if the answer sounds too good to be true, it probably is.

Amid Endless Uncertainty, This One's Simple

Howard Marks likes to say that risk is not about what you know, but what you don’t. It’s the future we can’t see, not the past we can analyze, that causes the most damage.

That’s why assets with inherent certainty, like food production, deserve attention. Especially when they’re scarce, uncorrelated, and backed by thousands of years of human necessity. Of course, you don’t have to swing for the fences. Sometimes, owning a small piece of the world that grows food is enough.

To many, farmland is simply a bet on fundamentals. Make sure you go and check out this valuable resource about farmland investing.

This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up for our Newsletter or subscribe on your preferred podcast platform so that you don't miss out on future episodes.

by

“The Pulse Fades, But Not Everywhere”

This Week In Trend

Welcome back to This Week in Trend, your weekly pulse check on global futures and the state of systematic trend following.

Momentum contracted this week, with weakness spreading across metals, equities, and soft commodities. Crypto stumbled. Volatility surged. Meats held firm, and bonds clawed out modest gains. While the broader environment softened, isolated signals still showed resolve.

The SG Trend Index rose a modest +0.45% month-to-date on its first day, but the YTD drag persists at -9.58%. The TTU Trend Barometer dipped sharply to 36 percent, reflecting a broad loss of trend structure and signalling a moderately weak environment.

It was a trickier week for systems. Some trends reversed. Others paused. But amid the noise, the map still showed islands of persistence.

SG Trend Index Performance

  • Month-to-date (as of Aug 1): +0.45%
  • Year-to-date: -9.58%

(Previous week MTD: +2.00% | YTD: -8.19%)

A subdued start to the new month. Trend conditions weakened, and most systems likely treaded lightly.

TTU Trend Barometer: 36 Percent – Moderately Weak

  • Previous reading: 59 Percent
  • 10-day rate of change: Falling Moderately

The Trend Barometer dropped to 36 percent, falling below neutral. Fewer than 40 percent of markets are showing medium to strong trend conditions. This shift reflects a compression in price persistence, even as isolated trends remain.

“At thirty-six, the noise returns—but it’s not universal.”

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

Weekly Asset Class Snapshot

Source: Finwiz.com

Metals and softs led the downside. Crypto and equities also reversed. Volatility exploded higher. Bonds and energy saw minor gains. Meats stood alone with near-flat performance, supported by cattle strength.

Asset Class Breakdown – Reversals and Continuations

  • Energy: +0.30% (Previous: -3.58%)
    Crude held steady. Natural gas found footing. Not a strong bounce, but a shift from breakdown to pause.
  • Metals: -6.89% (Previous: -0.45%)
    A washout. Gold collapsed, copper reversed, and silver crumbled. Heavy selling hit the sector hard.
  • Equities: -3.19% (Previous: +1.30%)
    U.S. indices dropped sharply. The S&P, Nasdaq, and Russell lost altitude. Risk appetite waned.
  • Soft Commodities: -5.32% (Previous: +0.46%)
    Orange juice and cocoa gave back recent gains. Trend signals here softened meaningfully.
  • Grains: -2.75% (Previous: -0.76%)
    Another down week. Corn, wheat, and soybeans slipped again. Momentum is fading.
  • Meats: +0.03% (Previous: +2.00%)
    Flat overall, but strength in live cattle and feeder cattle held up. Continuity remains.
  • Bonds: +1.01% (Previous: +0.25%)
    The 30-year and 10-year rose again. Structure continues to build slowly. Long exposure likely held.
  • Currencies: -0.80% (Previous: +0.47%)
    The dollar advanced modestly. AUD and GBP weakened. FX remains choppy and low-conviction.
  • Crypto: -3.05% (Previous: -0.29%)
    Bitcoin dropped over 3 percent. The trend is intact but under pressure. Stops may be tightening.
  • Volatility Index: +11.27% (Previous: -6.48%)
    VIX snapped higher. After weeks of compression, volatility roared back—raising alert levels for trend-followers.

Performance Highlights – This Week’s Market Leaders & Laggards

Top Market Movers

Top Gainers

  • VIX: +11.27% – Volatility snapped higher amid trend disruption
  • Lumber: +3.34% – Sharp rebound off oversold levels
  • Crude Oil (WTI/Brent): +3.22% / +2.73% – Energy strength continued
  • Gasoline RBOB: +2.12% – Followed oil strength
  • 30-Year Bond / 10-Year Note / USD: +1.73% / +1.14% / +1.1% – Classic defensive rotation

Top Losers

  • Orange Juice: -27.05% – Climactic reversal after parabolic run
  • Copper: -23.2% – Major breakdown ends multi-month trend
  • Platinum: -6.47% – Heavy selling in precious metals
  • Wheat / Heating Oil / Coffee: -3.99% / -3.99% / -3.76% – Grains and energy reversed
  • Russell 2000 / Soybeans / Nikkei 225: -4.16% / -3.34% / -3.51% – Equities and commodities under pressure

Portfolio View – Positioning and Impact

  • Energy: Oil (WTI and Brent) posted solid gains, potentially triggering fresh long entries or adding to existing exposure. Natural gas continued to slide, likely flipping many models to the short side.
  • Metals: Copper collapsed, giving up prior trend gains in a single week. Systems likely exited abruptly. Platinum and silver also weakened, suggesting the metals complex is back in unwind mode.
  • Grains: Corn, soybeans, and wheat all declined, breaking recent rebounds. Models are likely scaling down or moving to the sidelines as trend signals weaken.
  • Softs: Orange juice suffered a massive drawdown, erasing weeks of trend. Cocoa also turned negative. Coffee remains under pressure. The sector's prior strength has turned disorderly.
  • Equities: U.S. indices pulled back, with the Russell 2000 notably weak. Nikkei and Euro Stoxx 50 also fell, suggesting global equity trends are cooling. Exposure likely reduced or risk-managed.
  • Bonds: U.S. 30-year and 10-year notes continued upward, reinforcing long bias. The trend appears to be rebuilding across the curve, with systems re-engaging.
  • Currencies: Mixed moves with slight USD strength. No strong, coordinated trend across majors. Systems likely remain cautious or underweight.
  • Crypto: Bitcoin slipped, along with broader risk sentiment. Trend signals likely remain in place, but drawdowns may trigger tighter stops or reduced sizing.
  • Volatility: VIX spiked over 11 percent, marking a dramatic reversal. This may shake out weaker breakout positions and prompt system re-evaluation, especially in risk-on assets.

Final Reflections – The Pulse Fades, But Not Everywhere

This week marked a clear shift in the trend environment. The TTU Trend Barometer slipped to 36 percent, reinforcing what the SG Trend Index also hinted — trends are losing cohesion. While volatility spiked and commodity weakness deepened, only a few themes held firm.

Energy offered selective strength, especially in crude oil, but metals and softs saw prior leaders like copper and orange juice unwind violently. Equities wobbled. Crypto paused. The environment has become more fragmented, more reactive.

For trend followers, this is not the time to force trades — it’s the time to manage exposure, follow process, and stay adaptive. The edges are thinner, but they haven’t vanished. They're just harder to catch.

Keep your discipline sharp. Let your stops breathe.

 

 

 

 

Get your FREE copy today!

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

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.

by

  • The Fed’s oversized role in markets may be creating more risk than stability, and the consequences are showing up in inflation, debt, and housing.
  • Investors clinging to the 60/40 portfolio could be blindsided in an environment where old assumptions about diversification no longer hold.
  • If you think things will go “back to normal,” this piece breaks down why the next decade might look nothing like the last.

In markets, we like to believe in equilibrium, that there’s always a rational buyer, a seller, and a price. But when a single institution grows large enough to tilt the table, what happens to that balance?

For the past 40 years, the Federal Reserve has not only influenced markets but also reshaped them entirely. While that may have been necessary at times, we now face the consequences: massive debt, stubborn inflation, fragile housing markets, and a financial system addicted to cheap money.

We’ve reached a moment where the old assumptions no longer hold. Investors clinging to the traditional 60/40 portfolio or hoping for a return to “normal” interest rates may need to confront a difficult truth: we’re probably not going back.

From Nudger to Superpower

The original intent of the Federal Reserve was modest. It wasn’t meant to dictate outcomes, only to guide, like a parent giving the occasional nudge to a wobbly bicycle. But over time, the nudger became a lifeguard, then a lifeline, then a central character in almost every market narrative.

After the 2008 financial crisis, the Fed’s balance sheet ballooned from under $1 trillion to nearly $9 trillion. It bought Treasuries and mortgage-backed securities not as a last resort, but as standard operating procedure. Its words, dot plots, press conferences, and forward guidance moved markets as much as (or arguably more than) earnings and innovation.

Today, the Fed plays the role of both arsonist and firefighter. It sets rates near zero to stimulate growth, then raises them rapidly to tame the inflation it helped ignite. It prints money to fund fiscal stimulus, then pulls liquidity to calm overheated speculation. It leads investors “by the nose,” creating a system where perception, not fundamentals, drives prices.

This is visible in the data and in the psychology of investors who now hang on every Fed whisper as if it were gospel.

The Debt Spiral

America’s national debt recently crossed $34 trillion, but the number itself is less alarming than the trend, and what it costs to maintain. We now spend roughly $1 trillion per year on interest alone. That’s more than the US spends on defense and more than Medicare. It’s happening before any recession, before unemployment rises, before new wars or pandemics.

It’s worth pausing on that: the cost of servicing the debt is now one of the largest line items in the federal budget. And that’s assuming rates stay where they are.

For decades, low interest rates disguised this problem. Debt was cheap, so the US borrowed more. As long as the Fed kept rates suppressed, the music kept playing. But debt doesn’t disappear, it just waits.

In an environment where inflation remains fairly sticky, the Fed is hesitant to cut too fast, and long-term bond yields resist falling, the cost of that debt is finally being felt. Not just by the government, but by every homeowner, business, and investor hoping for relief.

Housing, Inequality, and the Illusion of Wealth

One of the clearest casualties of this system is housing affordability.

During the zero-rate years, mortgages below 3% became common. That created a generation of homeowners with golden handcuffs, locked into low-rate loans and unwilling to sell. At the same time, a new generation of buyers faces 7% mortgage rates and record-high home prices.

It’s a recipe for stagnation. Boomers sit on homes they can’t replicate while Millennials and Gen Z delay family formation, homeownership, and financial stability. The illusion of wealth, driven by inflated home equity and soaring asset prices, hides a deeper fragility.

This has political consequences. When people can’t afford homes, student debt rises, and wage growth lags inflation, frustration mounts. That frustration fuels populism, mistrust in institutions, and the rise of candidates promising easy answers.

The irony is that those answers often come in the form of more intervention, more spending, more stimulus, more moral hazard. We’ve created a system that largely rewards leverage, punishes savers, and keeps zombie companies alive. A system where risk simply migrates from banks to shadow lenders, from housing to credit markets, and from private hands to the public balance sheet.

The 60/40 Illusion

For the better part of four decades, the 60/40 portfolio (60% equities, 40% bonds) was gospel. It worked because of one thing: interest rates fell steadily from the early 1980s to 2021. Bonds provided ballast, equities rose, and diversification did its job.

But what happens when that trend reverses?

In a stagflationary environment, where inflation persists even as growth slows, stocks and bonds can fall in tandem. We saw glimpses of this in 2022, when both markets posted losses. It wasn’t a fluke; it was a stress test.

From 1968 to 1982, equities lost two-thirds of their value in real terms. Bonds suffered as rates rose to nearly 20%. In that 14-year window, the 60/40 portfolio delivered a Sharpe ratio of 0.45, anemic by modern standards.

Today’s environment shares echoes of that era: high debt, supply shocks, tight labor markets, rising geopolitical risk. The tools that worked then, including flexibility, alternative assets, and options-based hedging, may become essential once again.

Because the Fed no longer guarantees upside, risk must be respected. Hedging becomes a necessity.

So, What Now?

If you’re under 50, the past 15 years may have felt like “normal,” but they weren’t. They were shaped by a once-in-a-century financial crisis, a once-in-a-generation pandemic, and the most aggressive monetary policy in history. That era is ending.

Investing going forward requires a new mindset. Not one of fear, but one of adaptability:

  • Accept that interest rates may stay elevated.
  • Accept that housing affordability may take years to normalize.
  • Accept that the 60/40 portfolio may no longer deliver the results it once did.
  • Accept that the Federal Reserve, while powerful, cannot control every outcome.

This doesn’t mean abandoning equities, because stocks still offer long-term growth, inflation protection, and compounding potential. But it does mean thinking critically about concentration, liquidity, and assumptions about risk. The market’s next decade won’t look like its last, and the playbook that worked for your parents or your mentors may no longer apply.

We can’t stop cycles. But we can prepare for them by asking the harder questions now, before the tail risk becomes reality.

This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up for our Newsletter or subscribe on your preferred podcast platform so that you don't miss out on future episodes.