The Macro Regime Engine’s bullish votes have nearly fallen off the map. When we first went risk off in early March, it was roughly 18 bullish to 23 bearish. This week: 12 to 25. Things are getting worse under the surface, not better.
S&P 500.. bearish. Nasdaq.. bearish. European stocks.. chop. Nikkei.. chop. VIX.. elevated and bullish. MOVE Index.. broke out bullish. Ten-year yields.. still climbing. Bitcoin.. flat. Gold.. bounced but still risk off.
Markets are voting, breadth-wise, in totality.. that things are not great. The 4% bounce this week got a lot of people excited. I get it. But violent upside rallies are normal in downtrends.
The 2022 analogue is the clearest example: we had an amazing rally mid-bear that convinced people risk was back on. Then equities dropped for another four to five months.
Could this be different? Could we just take a 10% hit and reverse? Sure. I’m not predicting. I’m nowcasting. And the current state is clearly risk off.
The stress dashboard is the one marginally positive note. VIX has come down from 30 (still elevated at ~26). Dollar broke out but can’t get above 100. MOVE spiked to 115 and has come all the way back to 84. Stress is trending in the right direction. But we haven’t seen any positive breadth to actually generate bullish votes in the engine.
Bitcoin Trend: Bearish.. Still No Signal, But ETH Quietly Wakes Up
Bitcoin is flat. The 8th Rule is still not in a long position. We’re building and getting closer, but there hasn’t been enough positive price performance to break out and initiate even a 25% position.
Gold bounced and rallied but the indicators remain risk off. Not touching it.
The surprise this week is Ethereum.
The 8th Rule for ETH.. which I’ve now fully recreated in Python with proper backtesting, walk-forward analysis and Monte Carlo simulations is currently showing a long 25% position. This is the only bullish signal across everything I track.
I’m also working on Solana next. Initial backtests look promising, but SOL only has six years of price history.. grain of salt territory. For now, SOL is still clearly bearish. ETH is the only thing with even a minimal bullish pulse.
The Data: ISM Beats, Unemployment Dips, and the Fed Does Nothing
A lot of green numbers on the macro data page this week. But context matters. When forecasts are trending lower and you beat them, it’s positive at the margins.. but it doesn’t mean everything is fine. Beating a lowered bar is not the same as strength.
That said, the two standout prints:
ISM came in at 52.7 vs 52.3 forecast, the highest print in a while, beating February’s 52.6. Manufacturing activity is technically expanding. It’s just a survey. I’ve seen people online risking their entire portfolio based on positive ISM prints. That’s their prerogative. But the ISM is a data point, not a trading system.
Unemployment came in at 4.3% vs 4.4% forecast. This is reflected clearly in the FedWatch odds. A couple weeks ago, there was a 5-10% chance of rate hikes. That’s now effectively off the table.
FedWatch: The market is now pricing in no movement on rates for the rest of 2026 and into early 2027. No cuts, no hikes. The Fed is on hold.
On-chain: Nothing changed from last week. Long-term holders still accumulating. Short-term holders still selling the lows. Not much to call out.
Tweets worth noting:
Woo_Minkyu posted a BTC supply in loss/profit chart that looks like it’s signaling a bottom. My PSA on charts like this: check the x-axis. The 2022 bottom zone lasted nearly a year. The 2019 zone was at least three months. These zones are measured in months, not days.
Caleb posted BTC with the 200/55/21 day EMAs. It’s clear as day: 200-day sloping downward, bearish. 55-day clearly bearish. Every time the 21-day touches the 55-day, we reject lower. Anyone telling you we’re still in a bull market is coping.
Final Thoughts
The regime is getting worse, not better. Bullish votes are evaporating. The 4% bounce looks like a trap. Every major asset I track is risk off except Ethereum, which is showing the faintest pulse of life.. a 25% position that I’m watching closely.
The portfolio is evolving. 50/20/20/10. The addition of ETH as a high-beta sleeve is backed by rigorous backtesting and improves the overall risk-adjusted return profile significantly. When the systems flip risk on, this is the allocation that deploys.
Until then: cash. USFR. Patience. The systems are doing exactly what they were built to do.. keeping us on the right side of risk while the market sorts itself out.
The trend is what matters. Not the ISM print. Not the bounce. Not the narrative. The trend.
For this weeks full video breakdown:
— Durden out.
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Disclaimer: This content is for educational and informational purposes only. It does not constitute financial advice, investment advice, or a recommendation to buy or sell any asset. Trading equities and futures involves substantial risk of loss, including the potential for loss exceeding your initial investment.
Past performance, whether backtested or live, does not guarantee future results. Backtested performance has inherent limitations: it is designed with the benefit of hindsight, does not reflect actual trading, and does not account for all factors that may affect real-world execution.
The author is not a licensed financial advisor. Always do your own research and consult a qualified financial professional before making investment decisions. You are solely responsible for your own trading decisions.
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