Journal ·
Wednesday, 15 July 2026
Regime Risk-onMarket regime
Risk-on carries, print #18 in the journal and one session on from yesterday's read. VIX sits at 15.67, inside the calm band and easing from 16.50, which widens the cushion beneath the ~18 gate. Breadth reads 60.9% (594/975) above the 50-day EMA, a healthy majority that eased only marginally. SPY closed 754.77, +8.6% over its 200-EMA of 694.91. Rates backed up across the curve at a measured pace: the 10Y added 4bps to 4.58% and the 2Y 2bps to 4.18%, widening the 10Y–2Y spread 2bps to 0.40%. The move split evenly this week, real 10Y and breakeven each up 2bps, to 2.33% and 2.25%. Credit gave a touch of ground for the first time in a while, HY 2bps wider at 2.72% still tight in absolute terms.
Key numbers
| Metric | Level | Read |
|---|---|---|
| Regime | Risk-on | Consecutive print #18, continuation from 07-14 |
| VIX | 15.67 | Calm, eased further below the ~18 gate |
| Breadth >50-day EMA | 60.9% (594/975) | Healthy majority |
| SPY close | 754.77 | +8.6% vs 200-EMA (694.91) |
| 10Y Treasury | 4.58% | week over week +4bps |
| 2Y Treasury | 4.18% | week over week +2bps |
| 10Y–2Y spread | 0.40% | week over week +2bps |
| 10Y breakeven | 2.25% | week over week +2bps |
| Real 10Y rate | 2.33% | week over week +2bps, even split with breakeven |
| HY credit spread | 2.72% | week over week +2bps, wider |
| 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 core supports for holding cluster-confirmed leaders remain in place: HY at 2.72% is tight by any historical yardstick and vol is contained. What changed at the margin is the shape of the risk. Credit widened rather than tightened, and the rate back-up split cleanly between the real and inflation legs, so there's no single duration-punishing signal to isolate the highest-multiple narratives this week. Neither move is large enough to reprice the regime; both are the kind of small give that decides which stories get squeezed, not whether the tape turns. Breadth's slight easing, even with VIX's wider cushion below the gate, argues for the same discipline already in force: gate fresh high-conviction adds behind a catalyst or a clean setup rather than adding on strength alone.
What would change the call
- VIX at 15.67 holds the calm band and has widened its cushion; a push above ~18 re-arms the vol gate and tilts the read to caution.
- Breadth at 60.9% eased but keeps a healthy majority; participation under 50% flips the regime faster than any single macro print.
- HY at 2.72% widened 2bps the first give in a while; an accelerating move wider strips out the cleanest confirm and drags the read toward neutral.
- Real 10Y at 2.33% climbed again; a sustained rise pressures the longest-duration narratives first, even with the breakeven moving in step.
What to watch
- Next CPI against a 2.25% breakeven: a hot print tilts this week's balanced back-up toward the real leg 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 2.72%: whether this first tick wider extends or reverses is the fastest route to re-rating credit.
- Fed path against a 3.63% funds rate, with the curve near flat at 0.40% and both ends lifting as the market prices cuts not yet delivered.
Status
Risk-on since 18 June 2026; consecutive print #18 in the journal, continuation of the 14 July 2026 read. Research only no positions, sizes, entries, stops, or P&L.