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Friday brought a massive sell-off in US equities, pushing the VIX above TREND. That was not where the math said to get aggressive. Throughout the week, signals were weakening, breaking TRADE and telling you to reduce. The real opportunities were shorting FX and rates.

​Friday, October 16, 2026​

VIX

The math has changed in the VIX. This does not mean sell everything, but there is risk of another spike higher as long as it holds bullish TRADE TREND. As always, follow the individual signals, but keep this in mind for the overall market environment.

MOVE

Bond volatility bounced off the low end of the RANGE and is holding bullish TREND, which is a good signal for rate shorts.

HYG

Despite the VIX blowing out, credit held its higher low and the RANGE is signaling condensing volatility (shrinking RANGE).

SPY

People calling for Black Friday could not see that SPY was never at risk of breaking TREND. It spent some time below TRADE, so I was reducing some there, but as we mentioned all of last week, breaking TRADE is a reduce—not an exit—signal. Today it is back above TRADE, but with the VIX above TREND I am not adding here. Just holding the minimum after reducing.

QQQ

QQQ was reducing two days before the big sell-off on Friday and held TREND throughout the panic. The next few days will be important. Stay on top of TRADE and TREND breaks—they will determine the next move.

MAGS

MAGS never broke TRADE and is a bit stronger than SPY. It remains my full US equity long.

AAPL

You would not know there was a market panic just by looking at Apple’s signal. If the VIX breaks below TREND and AAPL reaches the low end of the RANGE, that is another buy signal in bullish TRADE TREND. The math is still really strong here.

Sector Signals

IGV

Software was a reduce on Friday and is holding bearish TRADE.

SMH

Damage was done on Wednesday in SMH and QTUM. These were full exits before the blow-out.

QTUM

SPCX

SpaceX did not participate in the panic, so no moves were made here after buying TREND on Thursday.

XLE

XLE was a good place to have exposure during this event. The math was strengthening going in and coming out of it.

XLV

Same with XLV. Both were kept at minimums as they rallied last week.

XLU

XLU came back down and is still in a minimum position as rates start to roll back over.

Macro Markets

DXY

This is why FX was the aggressive move of the day on Friday. Bullish TRADE TREND at the low end of the RANGE.

British Pound

Nice reaction outside the top end of the RANGE at TREND in pounds.

TLT

TLT is still overbought and has plenty of room to the low end of the RANGE.

Oil

Oil is moving higher and holding bullish TRADE, which supports rates rolling over in TLT and XLU.

GLD

Gold was down again on the day—same rate-sensitivity trade. I was not adding more at the top end of the RANGE but holding the minimum for more rate exposure.

BTC

Bitcoin’s TRADE is still doing the heavy lifting, keeping Bitcoin up while other asset classes were puking. Same view as last week: hold TRADE and expect higher. A break of TRADE means reduce and bid TREND at $75K.

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