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VIX

VIX had quite the panic attack heading into last week’s close, so the question now is whether that marked the beginning of a new volatility regime or just a volatility fit. To answer that, you need to see the fractal levels to make your next moves. As of today, VIX is holding the top end of the RANGE and attempting to close back down below TREND. Even if it does close back into bearish TREND, that does not mean everything is a buy. Most of the damage was in AI, and those signals broke before the Friday crash.

QQQ

QQQ has the most exposure to AI, which is why I’m not long QQQ. If you remember from last week, the shift was out of QQQ, SMH, and QTUM and into names like SPY and MAGS, while holding minimum sector exposure from the summer such as XLV and XLE. Today QQQ is holding TREND, but the low end of the RANGE is now below TREND. You want to see QQQ hold TREND for overall volatility to stay controlled, but that does not mean it is the best U.S. equity exposure.

MAGS

MAGS remains the strongest index signal, and I’m holding a full position in it. The difference in the signals is the only thing I need to determine where to hold U.S. equity exposure.

AAPL

Within MAGS, AAPL has been the strongest ticker to hold.

MSFT

Microsoft gave a buy signal today to add back more U.S. equity exposure.

SPY

When VIX blew out, I was reducing as it broke into bullish TREND. I still hold a minimum position here. With a close below VIX TREND, and depending on how much U.S. exposure you already have, it would be near the top of the list to add back so you do not miss an equity rally if VIX falls back down to the low end of the RANGE, which is sub-15.

IWM

Interestingly, small caps have been the best performer since the VIX blowout.

IWM Weekly (TAIL)

This could be why it has done nothing but ride the low end of the RANGE since peaking back in August. We still have Quad 2 monthly and quarterly, and it is only 2% above TAIL. Small caps look ready to rally on a weekly scale. We’ll see how it performs daily, but it is something to keep in mind. Remember, fractals are multi-duration.

Sector Signals

IGV

Software also took a hit on Friday, but the math said to reduce, not exit. Today it is trying to reclaim TRADE. The math says hold minimum—do not add or sell here.

SMH

This is the damage I was talking about in AI. It broke and held TREND. This is where the math is saying to expect acceleration, not reversal, which could have big implications for the overall market if AI gets another sell-off. That is why you do not want to be too aggressive and need to be very selective in what you own in U.S. equities. Risk is not out of this market.

SPCX

Given that market context and SPCX being in bearish TRADE, I reduced it back to minimum into earnings today. This could rip or crash, but since I got the absolute low, I’m not closing the position and I’m ready for whatever it wants to do next.

XLE

XLE has been a good sector to buffer some of this blowout. I haven’t been able to sell some at the top end of the RANGE because I’m already at minimum, but it is still helping overall performance.

XLV

Same with XLV—I’ve been riding this since mid-summer.

Macro Markets

DXY

The dollar looks ready to continue Quad 2. You just have to be patient and trust the math.

British Pound / Euro

The British Pound is showing relative strength, so I switched out of pounds for euros. Both are inverse signals to the dollar, so I’ll take the weaker one.

Short euros is a key macro position for my book, as equities still have plenty of risk built in.

EPHE

Global equities is another way to play long dollar, and the Philippines are at the top end of the RANGE in bearish TRADE and TREND. These are extremely strong signals compared to U.S. equities.

TLT

Rates are refusing to go down at the moment, which is why the top end of the RANGE is now above TREND. I’m still holding shorts, and the expectation is lower. They peaked on October 7 and have been straight up since. Don’t forget that all the people calling for a crash in equities because of higher rates were dead wrong. If rates roll over, it will be one of the catalysts for the U.S. to continue higher.

Oil

Oil is holding bullish TRADE and TREND. I haven’t had a position in oil in a while—just held XLE at minimum.

GLD

Gold rolled over again. I’m still at minimum. (Gold hates an up dollar and up rates.) It looks ready for another leg down as soon as the dollar and rates start playing along.

BTC

Bitcoin has been a big winner recently simply by not going down. That is what happens when it cannot break TRADE. Eventually after enough attempts of failing to go lower results in higher in bullish TRADE TREND.

If you want the same fractal clarity that lets you see the difference between a volatility fit and a new regime, shift out of the damaged AI exposure before the next leg, and hold only the signals that are actually working (MAGS over QQQ, minimum in the sectors that are just buffering, shorts where the math says stay short), subscribe to Similar Set Signal.

The transformation is simple: stop reacting to the panic and start seeing the RANGE, TREND, and TRADE levels across timeframes so you know exactly where to add, where to stay minimum, and where risk is still building. That edge is what keeps the book selective instead of aggressive when the market is still dangerous.

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