Journal ·
Tuesday, 14 July 2026
Regime Risk-onMarket regime
Risk-on holds, print #17 in the journal and one session on from yesterday's read. VIX eased to 16.50, deeper into the calm band. Breadth reads 61.7% (602/976) above the 50-day EMA, still a healthy majority though a shade lighter than the prior 62.2%. SPY closed 751.94, +8.3% over its 200-EMA of 694.07. Rates extended their back-up: the 10Y added 6bps to 4.62% and the 2Y 5bps to 4.26%, nudging the 10Y–2Y spread up 1bp to 0.36%. The composition stayed real the real 10Y rose 5bps to 2.36% while the breakeven added just 1bp to 2.26%. Credit gave no ground and tightened another basis point, HY at 2.69%.
Key numbers
| Metric | Level | Read |
|---|---|---|
| Regime | Risk-on | Consecutive print #17, continuation from 07-13 |
| VIX | 16.50 | Calm |
| Breadth >50-day EMA | 61.7% (602/976) | Healthy majority |
| SPY close | 751.94 | +8.3% vs 200-EMA (694.07) |
| 10Y Treasury | 4.62% | week over week +6bps |
| 2Y Treasury | 4.26% | week over week +5bps |
| 10Y–2Y spread | 0.36% | week over week +1bps |
| 10Y breakeven | 2.26% | week over week +1bps |
| Real 10Y rate | 2.36% | week over week +5bps, real leg led |
| HY credit spread | 2.69% | week over week −1bps, 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 confirmations that carry the most weight still line up: HY grinding tighter and VIX pinned low both argue for holding cluster-confirmed leaders into a quiet tape. The live variable is the rate path. A second week of real-yield-led back-up resets the discount rate on the longest-duration, highest-multiple narratives first, so it decides which stories get squeezed rather than whether the regime turns. A real growth scare would surface as widening credit and thinning breadth; neither is present, breadth's small give notwithstanding. Stance is unchanged: gate fresh high-conviction adds to a catalyst or a clean setup, and treat the real-rate climb as the sorter for which narratives take the next hit.
What would change the call
- VIX at 16.50 sits in the calm band; a snap back above ~18 re-arms the vol gate and tilts the read to caution.
- Breadth at 61.7% eased but holds a healthy majority; participation under 50% flips the regime faster than any single macro print.
- HY at 2.69% tightened again; a sharp reversal wider strips out the cleanest confirm and drags the read toward neutral.
- Real 10Y at 2.36% rose for a second week; a continued climb pressures the longest-duration narratives first, breakeven steady or not.
What to watch
- Next CPI against a 2.26% breakeven: a hot print extends the real-rate move leading this 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 fastest route to re-rating credit.
- Fed path against a 3.63% funds rate, with the curve near flat at 0.36% and both ends still lifting as the market prices cuts not yet delivered.
Status
Risk-on since 18 June 2026; consecutive print #17 in the journal, continuation of the 13 July 2026 read. Research only no positions, sizes, entries, stops, or P&L.