Journal ·
Thursday, 9 July 2026
Regime Risk-onMarket regime
Risk-on holds, the fourteenth consecutive read (n=14) and a one-day continuation of the 8 July 2026 print. Vol is calm: VIX 15.84, still inside the quiet zone. Breadth reads 61.0% (596/977), a healthy majority above the 50% line and clear of the marginal zone, closer to a robust participation regime. SPY closed 751.55, +8.6% over its 200-EMA of 692.08. Rates backed up in parallel on the week: the 10Y added 7bps to 4.56% and the 2Y matched it at +7bps to 4.21%, leaving the 10Y–2Y spread flat at 0.35%. Composition is the tell the move came from the real leg, the real 10Y up 5bps to 2.31% against a breakeven only 2bps higher at 2.25%, so this was the discount rate repricing rather than inflation expectations. Credit leaned the other way and tightened, HY in 4bps to 2.70%.
Key numbers
| Metric | Level | Read |
|---|---|---|
| Regime | Risk-on | Consecutive print #14, continuation from 07-08 |
| VIX | 15.84 | Calm |
| Breadth >50-day EMA | 61.0% (596/977) | Healthy, above 50% |
| SPY close | 751.55 | +8.6% vs 200-EMA (692.08) |
| 10Y Treasury | 4.56% | week over week +7bps |
| 2Y Treasury | 4.21% | week over week +7bps |
| 10Y–2Y spread | 0.35% | week over week flat |
| 10Y breakeven | 2.25% | week over week +2bps |
| Real 10Y rate | 2.31% | week over week +5bps, real leg led |
| HY credit spread | 2.70% | week over week −4bps, tighter |
| Fed Funds | 3.63% | as of 1 June 2026 |
| Initial claims | 215K | week over week −2K (as of 4 July 2026) |
| Unemployment | 4.2% | as of 1 June 2026 |
| Nonfarm payrolls | 159.0M | as of 1 June 2026 |
| Housing starts | 1,177K | as of 1 May 2026 |
Regime assessment
The two heaviest confirms still align. Credit grinding tighter and vol under the calm threshold both argue for holding cluster-confirmed leaders rather than trimming into a quiet tape. One thing tempers that. Breadth is a healthy majority now, clear of the marginal zone and well above the flip line, so there is still a cushion under a single leader rolling over. But the yield back-up came entirely from the real leg the precise pressure point for the longest-duration, highest-multiple narratives that re-rate first when the discount rate climbs. That pressure doesn't break the regime: a real growth scare would surface in credit and breadth, and credit is tightening while breadth holds a healthy majority. For positioning, that means keeping fresh high-conviction adds tethered to a catalyst or a clean setup instead of paying up for extension, and treating the real-rate drift as the thing to watch noise or trend, it decides which narratives get squeezed next.
What would change the call
- VIX at 15.84 sits in the calm band; a snap back above ~18 re-arms the vol gate and tilts the read toward caution.
- Breadth at 61.0% is a healthy majority; participation slipping under 50% flips the regime faster than any single macro print.
- HY at 2.70% just tightened again; a sharp reversal wider strips out the cleanest confirm and drags the read toward neutral.
- The real 10Y at 2.31% rose again this week; a continued climb hits the longest-duration narratives first, breakeven steady or not.
What to watch
- Next CPI against a 2.25% breakeven: a hot print extends the real-rate move that already drove this week's back-up and pressures duration.
- Labor: claims at 215K (−2K week over week, as of 4 July 2026) stay firm; the test is whether the 159.0M payroll trend and 4.2% unemployment hold into the next release.
- The HY path from 2.70%: whether this fresh tightening sticks or unwinds is the quickest route to re-rating credit.
- Fed path against a 3.63% funds rate, with the curve at 0.35% and both ends up 7bps on the week as the market keeps pricing cuts not yet delivered.
Status
Risk-on since 18 June 2026; consecutive print #14 in the journal, continuation of the 8 July 2026 read. Research only no positions, sizes, entries, stops, or P&L.