Journal ·
Monday, 13 July 2026
Regime Risk-onMarket regime
Risk-on carries, print #16 in the journal and a continuation of the 10 July 2026 read. Vol stays calm but firmer: VIX 17.16, up from 15.03 and toward the upper end of the calm band. Breadth reads 62.2% (608/977) above the 50-day EMA, a healthy majority. SPY closed 749.13, +8.0% over its 200-EMA of 693.49. Rates backed up in parallel this week the 10Y and 2Y each added 7bps, to 4.56% and 4.21%, leaving the 10Y–2Y spread flat at 0.35%. The composition was again real: the real 10Y rose 6bps to 2.32% while the breakeven ticked just 1bp to 2.24%. Credit went the other way and tightened, HY in 5bps to 2.69%.
Key numbers
| Metric | Level | Read |
|---|---|---|
| Regime | Risk-on | Consecutive print #16, continuation from 07-10 |
| VIX | 17.16 | Calm |
| Breadth >50-day EMA | 62.2% (608/977) | Healthy majority |
| SPY close | 749.13 | +8.0% vs 200-EMA (693.49) |
| 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 | 2.24% | week over week +1bps |
| Real 10Y rate | 2.32% | week over week +6bps, real leg led |
| HY credit spread | 2.69% | week over week −5bps, 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 confirms that carry the most weight stay aligned: credit grinding tighter and vol holding in the calm zone both favor holding cluster-confirmed leaders into a quiet tape. The wrinkle is the rate back-up, and it moved differently than last week both ends lifted together, so the discount rate reset as a parallel level shift rather than a steepening, and with the real leg doing the work it lands on the longest-duration, highest-multiple narratives first. That pressures which stories get squeezed, not the regime itself; a genuine growth scare would surface in widening credit and breadth breaking down, and neither is happening: credit tightened and breadth holds a healthy majority. Positioning holds: tether fresh high-conviction adds to a catalyst or a clean setup, and treat the real-rate path as the variable that sorts which narratives get pressured next.
What would change the call
- VIX at 17.16 sits in the calm band but not far below the line; a push above ~18 re-arms the vol gate and tilts the read toward caution.
- Breadth at 62.2% is a healthy majority; participation slipping under 50% flips the regime faster than any single macro print.
- HY at 2.69% just tightened again; a sharp reversal wider strips out the cleanest confirm and drags the read toward neutral.
- Real 10Y at 2.32% rose again this week; a continued climb hits the longest-duration narratives first, breakeven steady or not.
What to watch
- Next CPI against a 2.24% breakeven: a hot print extends the real-rate move that led 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 2.69%: 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 pinned at 0.35% and both ends rising together as the market keeps pricing cuts not yet delivered.
Status
Risk-on since 18 June 2026; consecutive print #16 in the journal, continuation of the 10 July 2026 read. Research only no positions, sizes, entries, stops, or P&L.