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We left off last week with the VIX as the key market to watch into the close. That resulted in holding bullish TREND and creating potential volatility risk in the market. Today Keith and Hedgeye are talking a lot about Quad 4, which can feel scary and confusing if you can’t see the full fractal picture. The Signal already had you reducing and exiting US Equity markets without needing that label. Today is not a day to exit everything just because the term Quad 4 is being thrown around. To me this looks like election-event uncertainty and panic heading into next week (just look at what happened with Brazil yesterday). We still have solid monthly and quarterly earnings and economic reports. Mid-January is when the data starts to turn, and that’s when I’d look to front-run a Quad 4. That said, could this be the start of a bear market? Sure. But we don’t have to predict it. Simply follow the fractal math daily, and whatever the market does, the Signal will guide you through it.

​Thursday, Oct 22, 2026​

VIX

VIX is still set up for another volatility pop. It just flipped bullish TREND and is retesting/holding that line at 18.05. That remains the key number to watch into the closes this week.

MOVE

Bonds remain in bullish volatility, a historical signal of potential Quad 4 environments.

HYG

Credit in bearish TREND is also generally a Quad 4 indicator. It’s at the top end of the RANGE in bearish TRADE and TREND, but notice the higher low we’ve been discussing. The low end of the RANGE is still above that October 1st low (September was a monthly Quad 4) and continues to hold. This is another key market to watch from here—it could mark the start of another downturn in credit.

SPY

As a broad overview of US Equities via SPY, we just broke TRADE. That’s why it’s a reduce, not a panic exit, with TREND still below the low end of the RANGE. Holding that level is something I’m focusing on through election day.

QQQ

Nasdaq has been weaker, but we already knew that. The AI bubble popped weeks ago and the Signal was repositioning in US equities away from AI and tech growth. We sit here with the potential of another leg down, but that does not mean we’ll hold below TREND until 2027.

MAGS

Mega caps gave the same signal as SPY: a reduce, not an add. It’s in bearish TRADE with VIX in bullish TREND.

AAPL

Exposure to US Equities should be concentrated in the strongest signals. Apple and Microsoft are two of the strongest remaining.

MSFT

Sector Signals

IGV

Overall software had a chance to make a bearish transition but just broke TRADE (we reduced some). It has since recovered bullish TRADE. That’s why you don’t panic on TRADE breaks—you move incrementally to manage new potential risk.

SMH

AI still has a lot of risk built in and can be a big headwind the overall market has to fight. Today is a big green day, but the Signal is still absolutely bearish. If we reach the top end of the RANGE, it’s a place to add short US Equity exposure.

XLF

Does that mean every sector looks like that? No. XLF flipped back bullish and is holding so far. Does that mean I’m adding here? No. VIX and overall signals are signaling risk or telling you to reduce, but this is also not an imminent “Black Monday” event that most are fearful of right now. Make sure whatever positions you have align with the fractal math and you’ll be positioned for whatever the market does.

XLY

Consumer Discretionary is a big Quad-defining sector and it’s firmly in bullish TRADE while deciding what it wants to do with TREND. Another key ticker signal to watch to see which way the market is leaning.

XLE

Energy has been one of the strongest sectors—which the Signal absolutely nailed. It’s a sector that generally goes straight down in Quad 4. The biggest takeaway today is that the market is unsure and there is risk, but it doesn’t fully look like Quad 2 or 4. That’s why having the full fractal math navigates you.

XLV

Similar view in healthcare. It’s been a big winner during this tough transition, and following the math kept you positioned. Overall, not doing much in US Equities today—we were already reducing, not adding, and not exiting because those reduces haven’t broken TREND yet.

Macro Markets

DXY

Leaving off from last week, FX was one of the strongest adds to the portfolio you could have made because that’s what the math said to do. Shorting FX and holding short gold has played out nicely in macro. Markets are not just US equities, and the Signal lets you go anywhere.

Euros

Strong position in the portfolio, executed right on time with free capital from reducing equities.

TLT

Did you ride the TLT bear market from July? Did you reduce and exit when the Signal changed? 100% out of TLT.

Oil

Another interesting divergence: Oil is bullish TRADE and TREND, but TLT flipped TREND. Generally Oil signals inflation, which means TLT down. That’s why we don’t use general rules or just a Quad label to position in markets—it’s the fractal flows that are important.

GLD

Similar Set Signal once again got you out and short at the exact right time. You just need to be able to see the math, then learn to trust it to execute in real time. Short Gold is a nice position to have in your book while US Equities are quite blurry at the moment.

BTC

It looks like Bitcoin will give its first reduce signal into the close today. That doesn’t mean EXIT. It means I’ll be taking some profits off and placing bids at TREND to rebuild a full position if it gets there at $75K.

Tired of getting whipsawed by Quad labels, headlines, and conflicting opinions while the market stays blurry? Subscribe to Similar Set Signal and let the fractal math do the heavy lifting. You’ll reduce and reposition when the signals actually change—not after when the narrative turns scary—so you stay protected on the downside and positioned for whatever comes next. Get the daily clarity that turns uncertainty into clear, executable decisions.

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