Journal ·
Monday, 22 June 2026
Regime Risk-onMarket regime
Risk-on prints a second straight time (n=2), a continuation of the prior published read on 18 June 2026. This week added a little friction to last read. VIX rose to 17.28 but kept its calm tag. Breadth thinned marginally to 55.6% (543/977) above the 50-day EMA, still only healthy at the margin. SPY closed 744.27, +8.6% over its 200-EMA (685.57), a shade less stretched. Rates kept their split: the 10Y eased 2bps to 4.46% while the 2Y added 10bps to 4.19%, flattening the 10Y–2Y spread 12bps to 0.27%. Breakeven inflation eased 6bps to 2.25% and the real 10Y firmed 4bps to 2.21%, a touch more restrictive. HY tightened 5bps to 2.66%, with credit still confirming.
Key numbers
| Metric | Level | Read |
|---|---|---|
| Regime | Risk-on | Second consecutive print (n=2), continuation from 06-18 read |
| VIX | 17.28 | Calm tag, ticked up |
| Breadth >50-day EMA | 55.6% (543/977) | Healthy but unconfirmed, thinned slightly |
| SPY close | 744.27 | +8.6% vs 200-EMA (685.57) |
| 10Y Treasury | 4.46% | week over week −2bps |
| 2Y Treasury | 4.19% | week over week +10bps, front end leads |
| 10Y–2Y spread | 0.27% | week over week −12bps, flatter still |
| 10Y breakeven | 2.25% | week over week −6bps |
| Real 10Y rate | 2.21% | week over week +4bps, more restrictive |
| HY credit spread | 2.66% | week over week −5bps, tighter, credit still confirming |
| Fed Funds | 3.63% | as of 1 May 2026 |
| Initial claims | 226K | week over week −4K (as of 13 June 2026) |
| Unemployment | 4.3% | as of 1 May 2026 |
| Nonfarm payrolls | 159.0M | as of 1 May 2026 |
| Housing starts | 1,177K | as of 1 May 2026 |
Regime assessment
The two soft spots from last read both slipped: vol ticked up and breadth thinned. That adds some pressure without changing the shape of the tape. Leadership is still narrow at 55.6%, and the rate structure is the part to respect: a curve flattening on the 2Y, not the 10Y, prices a higher-for-longer hold, and a firmer real rate leans on the highest-multiple narratives first. Credit is the clean confirm, with risk capital still paying up alongside equities. Net read for positioning is constructive but selective press the cleanest accelerating stories with cluster confirmation, and treat a 55.6% breadth reading as no mandate to add broad beta.
What would change the call
Breadth at 55.6% is the load-bearing leg; participation sliding under 50% tilts the read toward neutral. VIX is still calm at 17.28, so a push toward elevated puts a genuine vol bid into the tape. HY breaking meaningfully wider off 2.66% would remove the one clean confirm. On rates, the real 10Y firming further past 2.21%, or the 2Y extending its 10bp move and dragging the curve toward inversion off 0.27%, hits the high-multiple names first.
What to watch
- Next CPI against a 2.25% breakeven: a hot read pushes the real rate further the wrong way for momentum multiples, just as it firmed +4bps to 2.21%.
- Next payrolls and claims: claims improved to 226K (−4K); whether the 159.0M payroll trend and 4.3% unemployment hold or the labor margin gives.
- The VIX path from 17.28: still at calm, so whether it stays settled or a bid builds is the fastest route to handing the regime back.
- Fed path against a 3.63% funds rate, with the 2Y leading a 10bp jump and the curve flattening to 0.27% the market repricing what the Fed hasn't.
Status
Risk-on, consecutive print #2 in the journal; continuation of the prior published read on 18 June 2026. Research only no positions, sizes, entries, stops, or P&L.