The Sunday Setup June 1, 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 +10.46%
- S&P 500 YTD Returns +0.51%
Our Macro Ops Portfolio continues to outperform the S&P 500 with substantially less volatility. We are heavily positioned to the long side in Equity Indices, Foreign Currencies, Bitcoin and Gold.
In essence, short USD.
Of note, we did roll our Bitcoin futures position to the June contract.
Looking at the S&P 500 Emini Futures compared to historical extremes during selloffs, the April spike low was as extreme as the 2022 bear market bottom, 2018 Christmas Crash, 2009 Global Financial Crisis bottom and 9/11.
The oscillator on the bottom half of the chart is a new indicator I’ve built which measures the rate of change of the SQN indicator, which I use for market regimes and have talked about quite a bit over the years. You can learn more about the SQN here.
I’m looking to see how fast we move from a given market regime to another, and more importantly looking for extremes.
It’s that extreme in velocity that gives context to how significant of a bottom we’ve put in…it is historically significant and gives me a lot of confidence to remain long, and even continue adding to the position.
Our focus will be on Nasdaq instead of the S&P 500 and it had the same bottoming signal, but Nasdaq has gotten back above the 0 line faster than S&P showing better relative strength.
Headlines Based Decision Making Is…
This entire market turmoil was caused by the reaction to the headlines of the tariffs.
I saw a tweet by Charlie Bilello on X this week about how investing (or not investing) based on political parties in the oval office has performed since 1953. Giving further evidence that reacting to headlines, and your feelings about a president, is not a successful way to do business.
I bring this up because I’m re-reading the 48 Laws of Power by Robert Greene. If you haven’t read this book, beware, it isn’t light reading material. In fact the subjects are quite heavy, teaching how to manipulate people in an effort to gain power.
Think an update to Machiavelli’s book The Prince, written in the year 1513, which was written for an audience of one, dedicated to Lorenzo di Medici, hoping to gain favor and a position in the Medici government.
What we learn in the 48 Laws of Power book, if nothing else, power players at the highest levels would never have gotten to those positions without employing some of the techniques in the book.
In other words, by making decisions on headlines means you are making decisions that are almost guaranteed to be a complete manipulation.
Which is why we focus on systematic trading, using statistical advantages instead of trying to guess what’s really happening in the news.
Focus Next Week
Last week was mostly quiet, except for PCE data coming in on Friday, slightly cooling off.
Next week should be a whole lot more exciting with big economic data release each day.
I know I just talked about not using headlines to make trading decisions, that doesn’t mean we don’t need headlines to get markets moving.
The headlines shake things loose and bring money in or out, shifting flows in all different directions. These movements cause our systems to get active, so I’ll be expecting some shifting to our portfolio this week with profit targets getting hit, or stopped out, and new setups forming.
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.
