Journal ·
Thursday, 25 June 2026
Regime Risk-onMarket regime
Risk-on prints for the fifth consecutive read (n=5), in place since 18 June 2026, continuing the prior published entry on 24 June 2026. The vol tape didn't help this session: VIX firmed to 18.89, still carrying the model's elevated tag and a notch hotter. Breadth above the 50-day EMA improved to 59.9% (585/977), healthy but unconfirmed and a hair broader, still the constructive leg. SPY closed 733.33, +6.9% over its 200-EMA (686.24), extended. Rates pulled lower across the curve: the 10Y shed 5bps to 4.41%, the 2Y dropped 8bps to 4.11%, and the 10Y–2Y spread widened 3bps to 0.30%. Breakeven inflation fell 7bps to 2.18%, the cleanest disinflation read of the week, while the real 10Y nudged up 2bps to 2.23% as the long end held firmer than breakevens. The one leg drifting the wrong way: HY widened 10bps to 2.76%, the session's largest single move and the spread worth watching.
Key numbers
| Metric | Level | Read |
|---|---|---|
| Regime | Risk-on | Fifth consecutive print (n=5), since 06-18, continuation from 06-24 read |
| VIX | 18.89 | Elevated tag, firmer |
| Breadth >50-day EMA | 59.9% (585/977) | Healthy but unconfirmed |
| SPY close | 733.33 | +6.9% vs 200-EMA (686.24) |
| 10Y Treasury | 4.41% | week over week −5bps |
| 2Y Treasury | 4.11% | week over week −8bps |
| 10Y–2Y spread | 0.30% | week over week +3bps, steeper |
| 10Y breakeven | 2.18% | week over week −7bps, disinflating |
| Real 10Y rate | 2.23% | week over week +2bps |
| HY credit spread | 2.76% | week over week +10bps, wider, leg to watch |
| Fed Funds | 3.63% | as of 1 May 2026 |
| Initial claims | 215K | week over week −12K (as of 20 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
This is the friendlier half of a risk-on tape: breakevens disinflated and the whole curve pulled lower, which loosens the duration headwind that capped the most stretched multiples last week, even as vol firmed a touch. The rate tape has stopped fighting the advance. The standing caution rotated from rates to credit: HY was the session's one wrong-way leg, and a double-digit-bps week is the first move that argues against pressing size, even with the level still tight. Breadth firmed a touch but stays at a marginal-healthy reading: broad but not decisively broadening, which says hold conviction rather than chase the narrowest extension. Net positioning stays constructive lean on cluster-confirmed names, and let the credit drift and a still-elevated VIX gate sizing instead of the rate tape, which improved.
What would change the call
- HY at 2.76% after a +10bps week is the leg to watch; a continued drift wider removes the cleanest confirm and pulls the read toward neutral.
- Breadth at 59.9% is healthy but marginal; participation slipping under 50% turns the regime faster than any single macro print.
- VIX still carries the elevated tag at 18.89; a further climb converts a firming vol tape into a vol regime.
- The 2Y reversing higher and re-flattening the 0.30% spread, or the real 10Y firming past 2.23%, hits the longest-duration narratives first.
What to watch
- Next CPI against a 2.18% breakeven: the disinflation read is the constructive input; a hot print reverses it and pushes the real rate the wrong way for momentum multiples.
- Next payrolls and claims: claims firmed to 215K (−12K), a strong labor signal; the open question is whether the 159.0M payroll trend and 4.3% unemployment hold.
- The HY path from 2.76%: whether this week's +10bps is noise or the opening of a credit re-rate is the fastest route to handing the regime back.
- Fed path against a 3.63% funds rate, with the curve at 0.30% as the market keeps pricing cuts the Fed hasn't delivered.
Status
Risk-on, consecutive print #5 in the journal, since 18 June 2026; continuation of the prior published read on 24 June 2026. Research only no positions, sizes, entries, stops, or P&L.