Trend Following - Week in Review - May 2, 2025

“The fog hasn’t lifted—but we’re learning to move through it.”

This Week In Trend

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

After April’s sharp volatility and tentative recovery, the first week of May offered a quieter, more measured tone. Markets didn’t surge—but they didn’t stumble either. Instead, we saw a cautious continuation of rebalancing, with trend signals beginning to stabilize.

The environment remains ambiguous, but systems are adjusting—seeking clarity not in the noise, but in the underlying patterns.

“The Fog Persists—But Footing Improves”

Markets entered May with less urgency and more balance. There was no breakout, no breakdown—just a steady, cautious recalibration as April’s turbulence faded further into the background.

Volatility continued to unwind. Equities climbed again. Commodities rotated with less conviction. But momentum, while present, lacked power.

What emerged this week was not clarity—but composure. The rally cooled, but it didn’t collapse. The leaders didn’t charge—but they didn’t retreat either.

Systems are still adapting, still probing the terrain for signals that endure—not just flickers in the fog.

SG Trend Index Performance

• MTD (as of May 1): -0.40%
• YTD: -9.69%

The SG Trend Index edged into more stable territory this week. While still negative month-to-date, the improvement from last week’s -5.72% MTD reading reflects a halt in the April drawdown.

Losses haven’t reversed—but they’ve decelerated. Systems are catching their breath, particularly those with equity and diversified commodity exposure. It’s a reprieve—not a reversal.

TTU Trend Barometer: 48% – Weakening Neutral

• Last week: 50%
• This week: 48%

10-day rate-of-change: Falling weakly

The Trend Barometer edged down to 48%, technically entering a weaker neutral zone. The 10-day rate of change has turned slightly negative, confirming this slight decline. There’s more trend strength than two weeks ago, but the signals are not accelerating—they're stabilizing. This is not a "hot" regime. It’s a transitional one—where conviction is hard-earned, and resilience still matters more than reach.

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 rotation continues, but at a softer pace. Equities remained firm, while most other asset classes cooled. Volatility declined again. Commodities lost traction. Trend signals? Selective and subdued.

This week was less about leadership and more about levelling off.

• Equity Indexes: +3.21%
• Meats: +0.24%
• Soft Commodities: -2.81%
• Grains: -1.71%
• Bonds: -0.32%
• Metals: -1.45%
• Currencies: -0.15%
• Energy: -1.01%
• Volatility Index (VIX): -3.82%

Asset Class Breakdown – Softer Tones, Smaller Signals

Grains: -1.71% (Prev: +0.88%)
A reversal week. Grain markets lost ground as recent upward momentum fizzled. Trend-followers long wheat or corn likely faced retracements.

Meats: +0.24% (Prev: +2.14%)
Momentum nearly stalled. The livestock trade that supported systems in recent weeks now looks indecisive, with only slight gains.

Bonds: -0.32% (Prev: +0.57%)
The bounce reversed. Bonds remain trendless, oscillating without direction. They continue to offer little value to directional systems.

Energy: -1.01% (Prev: -0.71%)
Crude and natural gas lost steam. The recent whipsaws in energy markets deepened, likely triggering reductions or stops in trend-following allocations.

Metals: -1.45% (Prev: +0.36%)
Gold and silver softened further. Last week’s stability gave way to modest weakness, interrupting what had been a strong April performance.

Soft Commodities: -2.81% (Prev: +1.98%)
Cocoa and coffee finally cooled. The outliers of Q2 are still elevated, but momentum cracked this week—hinting that the best of the trend may be behind us.

Equity Indexes: +3.21% (Prev: +4.66%)
Equities remained the standout, though gains moderated. Tech and global indices still provided directional opportunity, especially for systems early to rotate long.

Currencies: -0.15% (Prev: -0.26%)
FX remained quiet. The USD drifted sideways, while other majors failed to generate fresh signals. A waiting game for most FX strategies.

Performance Highlights – This Week’s Market Leaders & Laggards

This week marked a dramatic reversal in contract-level leadership. Natural gas exploded higher, while many recent outperformers faltered. Equity strength remained, but the spotlight shifted from soft commodities to industrials and energy whiplash.

The chart above captures the sharp dispersion across asset classes—an environment that rewarded select exposure and punished overcommitment.

Top Market Gains:

• Natural Gas: +17.76% – A violent surge. Natural gas ripped higher after weeks of pain, offering sharp relief to systems still holding exposure. Volatility remains extreme.
• DAX / Nasdaq 100 / Nikkei 225 / Russell 2000: +3.80%, +3.43%, +3.27%, +3.26% – Global equity strength broadened. Europe joined the party, while US and Japanese indices continued climbing.
• DJIA / S&P 500 / Euro Stoxx 50: +2.94%, +2.90%, +2.86% – Large caps and Europe added stability to equity exposure. These were steady gains, not speculative bursts.
• Palladium: +2.27% – A rare bright spot in metals. Palladium rebounded, diverging from the broader pullback in precious and base metals.
• Live & Feeder Cattle: +1.52%, +0.88% – Modest, consistent support from livestock. Meat contracts continue to grind upward, though the momentum is slowing.

Biggest Market Declines:

• Crude Oil (WTI & Brent): -7.36%, -6.75% – A deep slide. After two weeks of strength, energy markets reversed sharply. Systems with long exposure likely hit stops or pared risk.
• Oats / Heating Oil / Cocoa: -5.65%, -5.51%, -5.09% – Soft and energy commodities cracked. Cocoa’s Q2 rally broke sharply—marking a potential regime shift.
• Coffee / Sugar / Corn: -4.31%, -5.01%, -3.45% – The commodity unwind extended to the broader softs and grains complex. Coffee gave up recent gains. Corn resumed its retreat.
• Silver / Copper / Gasoline RBOB: -3.44%, -3.92%, -3.97% – Industrial commodities joined the pullback. Metal and energy trades faltered together, weakening trend structure.
• VIX: -3.82% – A continued unwind in volatility. Calm persisted, closing out short-vol profits and reducing potential for near-term directional trades.

Portfolio Observations

• Equities: Still strong, but more balanced. Gains broadened beyond tech into global indices and large caps. Equity exposure remained the bright spot for trend-followers.
• Natural Gas: The standout contract. Whiplash-prone but delivered big gains for those who endured the chop.
• Soft Commodities: Leadership broke. Cocoa, coffee, and sugar all reversed. Systems heavily weighted in these trades may now face a recalibration.
• Energy & Metals: A double fade. Crude oil and metals sank in tandem, sapping momentum from two formerly trending sectors.
• Currencies: Mostly muted. The USD firmed slightly, but no major moves materialized. FX systems stayed flat or trimmed.
• Volatility: Still falling, though at a slower pace. Short-vol trades are likely done, and new opportunities remain elusive in this calm.

Final Reflections – The Fog Holds, but the Ground Firms

The first week of May didn’t break the quiet, it deepened it. Momentum softened. Signals scattered. And yet, something subtle is taking shape beneath the stillness.

Equities continued to lead, but gains moderated. Softs cracked. Energy reversed. Natural gas roared back to life just as metals lost theirs.

The SG Trend Index nudged higher, trimming April’s damage. But the TTU Trend Barometer slipped to 48%, revealing a cooling of trend conditions—not a broad acceleration.

This wasn’t a breakout week. It was a balancing act. Volatility eased again, offering breathing room while simultaneously choking off fresh opportunity.

We’re not entering a new trend regime. We’re wandering the transition zone where systems recalibrate and signals flicker, half-formed.

The edge isn’t prediction. It’s poise. What matters now isn’t how much you gain but how little you lose while waiting.

Because the fog hasn’t lifted. But for those still standing, still steady—clarity always comes.
And when it does, the prepared will already be in motion.

 

List of Resources used in the Week in Review

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