The Sunday Setup May 25, 2025
MACRO OPS PORTFOLIO HOLDINGS – (Futures, Bonds & FX)
- Long Bitcoin – we added to a full 100 bps of risk now
- Long S&P 500 Futures 50 bps of risk
- Long Nasdaq Futures 50 bps of risk
- Long Gold Futures 50 bps of risk
- Long WTI Crude Oil 50 bps of risk
- Long Mexico Peso 50 bps of risk
- Long Swiss France 100 bps of risk
- Long Euro FX 100 bps of risk
YTD PERFORMANCE:
- Macro Ops Portfolio YTD Returns +11.16%
- S&P 500 YTD Returns -1.34%
Our Macro Ops Portfolio continues to outperform the S&P 500 with substantially less volatility. We are heavily positioned to the long side in Foreign Currencies, Bitcoin and Gold.
Heading into the April volatility we were holding large cash positions. We bought the dip in the S&P 500 at 5309 ($ES Emini Futures), currently at 5819. Adding to our long exposure we added Nasdaq ($NQ Nasdaq Emini Futures) at 20,136, currently at 20,975.
Rather than some hero moment where we magically predicted the future, it was far less glamorous. Our systems waited until the risk was appropriate and then let the market pull us in on the long side, with a standard position size that if wrong would only lose 1R of risk.
I understand that books are written and careers are made from the trader who steps in front of a freight train, puts it all on the line the moment that the world is ending, and walks away victorious.
We didn’t do that. At Macro Ops, we used the same prudent risk management that we always do, using our excellent research and development to do that heavy lifting, while we put our efforts into operating the systems.
Now as equities had their first taste of turmoil last week with a -3.6% pullback off the highs we now have the opportunity to learn something about this equity market. The $ES Emini put in a fresh new momentum buy signal before pulling back.
This past week was the first period of any sustained weakness in over a month, and bearish sentiment amongst traders shot up. I’m not going to lie, if I’m just looking at the chart, and not using any statistical edges that I have it looks like we likely topped.
But that’s a ridiculous way to operate a business, when we do have the knowledge of our statistical edges.
When the best looking sell setups fail, that’s the market telling us that it’s more bullish than it seems.
If this pullback reverses and our statistical edge plays out, we’ll learn something about how bullish this market is.
And if it continues to sell off, that’s also the market telling us that it’s in a much more rare, and risky environment than the system would suggest.
One final note on our portfolio, Bitcoin has been our best performing position, by far, all year. It has experienced very little downside and quite a bit of upside.
More to be said about that…
The Dollar, that’s it, that’s the heading.
This week, the U.S. Dollar Index (DXY) closed at its lowest weekly level in over three years. Simultaneously, 30-year U.S. Treasury yields surpassed 5%, indicating a significant sell-off in long-term U.S. debt. These moves suggest a growing unease among investors about the U.S.’s fiscal trajectory and the sustainability of its economic policies.
US 30 Year Government Bond Yields over 5%
As the dollar weakens, other currencies are gaining strength, with the Swiss Franc and Euro up about 10% vs the Dollar since the beginning of 2025.
The Mexican peso continues to be the strongest since Liberation Day.
We are long Euro, Swiss Franc and the Mexican Peso in the Macro Ops portfolio.
Coming into this week we were tactically short Gold after its historic rise. Gold had moved into a Bull Volatile market regime which opened the door for a 10% correction, we waited for our mean reversion short setup and went short.
This week we exited our Gold short position and flipped back long at 3300.
For decades, gold was the “inflation hedge.” That’s outdated thinking.
Right now, gold is trading like a fiscal hedge.
The U.S. government is spending like it doesn’t need a credit score. Trillions in unfunded liabilities, a ballooning deficit, no political will to cut.
Gold knows.
It just broke out of a multi-year base.
- Central banks are buying it hand over fist.
- China, Russia, India… they’re stacking.
- Retail? Still asleep.
This is one of those 80/20 moments, where just being long the right thing could cover all the wrong moves elsewhere.
If gold is the legacy fiscal hedge, Bitcoin is the insurgent version.
It doesn’t care who’s in office. Doesn’t care what Powell says. Doesn’t even care if you believe in it.
It’s software.
And software doesn’t blink.
Bitcoin already front-ran this cycle when it ripped from $25k to $110k after the ETF approvals and after the US Presidential Elections.
Our Crypto Momentum System got a fresh new bull market buy signal at the end of April, when Bitcoin was at 93k, today we are sitting at all time highs.
But here’s the thing, that’s just the beginning:
That move wasn’t about hype.
That was trust breaking down, ever so slightly, and capital rotating out of fiat-based systems and into the only digital hard asset we’ve ever had.
The ETF inflows aren’t slowing and we are 400 days post-halving, with approximately 6 months to go until a historical analog bull market peak…the analog suggests that the next 6 months are the most explosive period yet.
The Bitcoin phase hasn’t even started yet.
Don’t wait for permission.
Markets don’t ring bells. They whisper. And right now, they’re whispering one thing:
Hard assets are the safe haven.
Not cash.
Not bonds.
Gold and Bitcoin don’t yield. But in this regime, maybe that’s the point.
That’s it for this week.
If you are interested in the strategies that I use.
And you can work with me on building out your trading business in the Trading Thunderdome.
