Trend Following - Week in Review - April 11, 2025

Welcome to "This Week in Trend", where each week, we cover key movements and trends in the futures markets, offering insights on commodities and indices shaping the economy. From price surges to notable declines, we provide an overview of the factors driving these changes. Stay informed about the latest developments and navigate the market with confidence. Join us weekly to explore the dynamic world of futures trading and the trends that matter most.

“Cracks in the Compass: When Trend Loses the Map”

This week wasn’t turbulent—it was transformational.

Markets staged a dramatic reversal of the previous week’s moves, but not in a way that offered relief. Instead, it delivered one of the sharpest systemic whipsaws seen in years—with devastating effects on diversified trend-following portfolios.

The SG Trend Index, which was down just -0.34% MTD last week, collapsed to -6.43% MTD as of April 10—dragging YTD performance to -10.79%. This steep drawdown wasn’t an outlier; it was an industry-wide hit. Even long-established stalwarts are struggling to adapt.

The TTU Trend Barometer confirms this dislocation. After spiking to 68% last week, it now reads 55%. While technically strong, the collapse reflects trend exhaustion—not stabilization. The barometer’s 10-day rate-of-change remains positive, but that’s a function of whipsaws—not trend resilience.

This week revealed a harsh truth: not every model was built for this regime. And the regime has changed.

SG Trend Index Performance

• MTD as at April 3: -0.34%
• MTD as at April 10: -6.43%
• YTD: -10.79%

This was one of the largest week-on-week declines in the index in recent memory. Systematic trend strategies across the board faced drawdowns, reinforcing just how severe the correlation shock has been.

Trend Barometer: 55% – A Mirage Confirmed

Last week’s 68% reading offered a glimmer of hope. This week’s 55% reading tells the real story: the signal was a mirage.

Though the 10-day trend rate remains moderately rising, that’s misleading. It reflects whiplash-induced movements, not sustainable structure. In truth, this was a week of destruction, not opportunity.

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

The reversal couldn’t be clearer: nearly every major asset class flipped from red to green—or green to red.

But not all markets reversed. Energy continued lower, extending an existing downtrend, while bonds reversed hard, transforming from haven to hazard.

The result? A portfolio environment where there were too few strong offsets to tame the bleed.

Asset Class Breakdown

Equities: +3.40% (Previous week: -9.83%)

A rebound week on paper, but likely too late for trend followers. Most long exposures were stopped out last week. Re-entry hasn’t occurred at scale, making this bounce more of a missed opportunity than a recovery.

Energy: -1.97% (Previous week: -8.71%)

One of the few sectors where trends remained intact. Unfortunately, they remained short. Those not already positioned accordingly continued to feel the burn of downside continuation rather than reversal.

Metals: +4.88% (Previous week: -12.78%)

A powerful reversal across silver, copper, and platinum. Yet the scale of last week’s losses made this bounce inadequate. Gold rallied strongly, reaffirming its safe-haven role amid market stress.

Bonds: -2.89% (Previous week: +1.75%)

The long end of the curve reversed sharply, sending a clear message: something bigger is breaking down. 30-year Treasuries fell over 6%, delivering a significant hit to portfolios that had leaned on fixed income as ballast.

Currencies: +2.71% (Previous week: +0.55%)

The USD depreciated materially. Traditional safe havens like the yen and CHF provided some cushion, but FX trends remain weak overall, and trend-following systems likely remained underweight.

Softs, Grains, Meats: Mixed

While softs and grains showed pockets of strength (notably cocoa and soybeans), these moves were too small or late to significantly impact diversified portfolios. Meats recovered slightly but remain largely rangebound.

Volatility: +6.01% (Previous week: +55.37%)

Still elevated. The VIX cooled from last week’s explosion but remains a harbinger of stress. Its rise last week wasn’t an anomaly—it was a regime signal.

Portfolio Observations

• Long Equities & Metals: Most stopped out during last week’s crash; the rebound came too late.
• Energy: Continued lower, extending pain unless models were already short.
• Fixed Income: Sharp bond selloff turned recent gains into losses.
• Currencies, Softs, Grains: Some support, but not enough to change outcomes.
• Volatility: Still high, signalling systemic unease.

Not every market reversed—but enough did, and in sync—to overwhelm diversification.

Final Reflections – This Is a New Regime

• Systemic Reversal, Not Rotation: Portfolio pain wasn’t from rotation. It was from universal trend inversion.
• Diversification Failed—Temporarily: Correlations converged violently. Even historically uncorrelated markets moved together.
• Gold Shines Again: One of the few safe-havens to reassert itself, hinting at the market’s growing fear.
• Bonds Sent a Warning: Long-dated Treasuries reversed sharply, signalling stress.
• Energy Trends Persisted: But only for those already short—pain continued for others.
• We’re Not Out of the Woods: Models are reducing risk, but if whipsaws continue, this storm could linger.

This week marked more than just a bad stretch—it was a structural rupture. For trend-followers, the compass still works, but the terrain has changed.

Survival is now the strategy. And the next trend begins with an exit.

List of Resources used in the Week in Review

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