Trend Following - Week in Review - June 13, 2025

“The Breakout and the Backdraft"

This Week In Trend

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

The week began with momentum, but it ended with a jolt.

Trend followers entered the week short energies, a position that had been paying off. But by midweek, the energy complex ignited. Crude oil, gasoline, and heating oil launched upward in a powerful rally. Then came the twist. Overnight, price action turned violently, forcing rapid exits and hitting systems that couldn’t adapt fast enough.

Volatility spiked. The VIX surged more than 13 percent. What had looked like clean structure became a backdraft. Once again, the environment reminded us that in these markets, strong conviction can quickly become exposure.

“Caught Between Signal and Smoke”

Gold, platinum, and silver continued their steady climbs. Soybean oil surged. Grains remained firm. But energies dominated the week’s story. Systems that had been short were caught off guard as prices exploded higher.

The sharp reversal didn’t just impact energy exposure. It shifted the emotional tone of the entire week. Trend followers were forced to cut, reassess, and reposition. The signal-to-noise ratio narrowed again.

SG Trend Index Performance

• Month-to-date (as of June 12): +1.50%
• Year-to-date: -10.00%

(Previous week MTD: +0.63% | YTD: -10.77%)

The SG Trend Index extended its recovery this week, gaining nearly one percent over the previous reading. After months of grind and setback, this marks a second consecutive positive week. The year-to-date loss remains significant, but systems appear to be adapting. The reversal in energies likely disrupted many portfolios, but strength in metals and grains helped steady the broader trend engine.

TTU Trend Barometer: 50 Percent – Strong

• Previous reading: 39 Percent
• 10-day rate of change: Rising Moderately

The TTU Trend Barometer has jumped to 50 percent, placing it at the upper edge of neutral and pointing toward stronger trend conditions. This is the highest reading in recent weeks and reflects broader improvement in cross-market structure. Systems are beginning to find clearer signals across a wider range of instruments.

"Fifty percent is no longer cold. It is a sign that trend conditions are heating up."

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

Momentum shifted, and for some sectors, it flipped.

Energy and metals extended their strength, delivering solid upside for systems that had adjusted in time. Grains held steady. Softs and meats gave back gains. Volatility snapped back violently after a sharp drop the week before. Equities rolled over following two weeks of upward drift.

Asset Class Breakdown –From Flat to Flickering

• Volatility Index: +13.59% (Previous: -6.85%)
  A complete reversal. Last week’s collapse in volatility gave way to a sharp spike, which disrupted breakout systems and short-volatility strategies alike.
• Energy: +6.87% (Previous: +4.64%)
  Another powerful leg higher. Unlike last week, most trend followers were short going into the move. The result was system stress, whipsaws, and abrupt exits.
• Metals: +0.57% (Previous: +6.92%)
  Positive movement continued, although with less force. Metals remain one of the few consistently supportive sectors.
• Grains: +1.12% (Previous: +1.07%)
  Gains were steady again this week. Soybean oil and canola offered directional structure and contributed positively.
• Meats: -0.76% (Previous: +3.47%)
  The uptrend faded. Cattle and hogs stalled and reversed, dragging on portfolio performance.
• Equity Indexes: -1.54% (Previous: +1.59%)
  Equities turned lower as volatility returned. The upward drift lost momentum and reversed.
• Soft Commodities: -1.56% (Previous: -0.20%)
  Losses deepened across the board. Sugar, cocoa, and orange juice extended their downtrends with no signs of reversal.
• Bonds: +0.68% (Previous: -0.57%)
  Bonds staged a modest recovery. After last week’s decline, they added some balance to portfolios under pressure from the energy reversal.
• Currencies: +0.34% (Previous: +0.17%)
  The currency complex remained quiet. The euro and Swiss franc led a slight push higher.
• Crypto: +0.90% (Previous: -0.07%)
  Bitcoin returned to positive territory. Price action remained stable and added a small tailwind for systems involved.

Performance Highlights – This Week’s Market Leaders & Laggards

This week’s market action delivered a mix of surprise rallies and sharp reversals. Energy contracts stole the spotlight with explosive gains, while previously trending sectors like meats and softs lost momentum. Below is a snapshot of the standout movers driving system outcomes.

Top Market Movers

Top Gainers

• Crude Oil (WTI and Brent): Both contracts surged more than 13 percent. What began as a short-covering move turned into a full-blown breakout that caught many short systems off guard.
• Heating Oil and Gasoline: Strong gains across the refined products complex supported the energy surge.
• Platinum, Gold, and Lumber: These markets continued to trend higher, contributing positively to diversified portfolios.
• Soybean Oil and Canola: Delivered steady upside. These contracts helped balance out turbulence in other commodity sectors.

Top Losers

• Cocoa: Fell nearly 5 percent this week. The downward slide has continued with no sign of stabilizing.
• Natural Gas: Dropped sharply in contrast to crude oil. The divergence added to cross-market noise.
• DAX and Euro Stoxx 50: European equities declined as risk sentiment weakened.
• Orange Juice and Coffee: Extended their pullbacks. Both have moved from prior strength into deeper correction phases.
• Live Cattle: Reversed recent gains. Momentum has now clearly broken in the meat complex.

Portfolio View - What the Moves Meant for Systems

• Energy: The most disruptive sector of the week. Many trend followers were short heading into the rally, and the violent upside move forced rapid exits. What initially looked like a breakout turned into a source of significant stress..
• Metals: A bright spot for long exposure. Gold, platinum, and silver continued to trend higher with relatively stable behaviour, providing consistent contribution to diversified models.
• Grains: Modest but constructive. Soybean oil and canola offered steady upside, while other grain contracts added little but did not hurt.
• Softs: Still on the defensive. Cocoa, sugar, and orange juice extended their declines. Trend structure remains weak, offering limited opportunity on either side.
• Meats: The trend has broken down. After weeks of quiet strength, cattle and hogs reversed, creating losses and signalling potential regime shifts in this complex.
• Equities: Downward rotation resumed. After a short recovery phase, equity indexes rolled over again as volatility returned. Trend signals remain shallow and inconsistent.
• Bonds: Provided a small degree of stability. Gains were not dramatic but helped offset losses from more volatile sectors.
• Currencies: Low activity and low contribution. FX markets remained quiet, with no dominant trends emerging across major pairs.
• Crypto: Added mild support. Bitcoin remained directionally positive and stable, contributing slightly to portfolios engaged in digital assets.

Final Reflections – Rebuilding in a Reactive Market

This week was a reminder that trend following is not just about spotting direction. It is about managing exposure when direction turns without warning.

Systems entered the week with improving posture. Metals held strong. Grains supported. Energy looked weak and short setups were common. But the dramatic reversal in crude and products forced a reset. Overnight moves cut deep, especially for models that were not quick to adjust.

Despite the volatility, the SG Trend Index finished higher for the second week in a row. The TTU Trend Barometer jumped to 50 percent, a firm shift toward more constructive territory. Trend structure is returning not just gradually, but with broader support. While volatility remains a factor, the environment is transitioning from reactive to directional. Systems that stay focused and disciplined may begin to find more sustainable edge.

This is a moment for discipline over aggression. For measured exposure over bold conviction. The path ahead is still forming, and for now, systems must stay agile and focused on preservation as much as participation.

The fire is back in parts of the market. But it is not yet controlled.

 

 

 

List of Resources used in the Week in Review

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