Updated Models & Spotlight Charts 5/25/2026

Does Positioning in Bonds Suggest a Bounce Is Coming?

A holiday shortened week pushed volatility lower, but I still believe the setup is there. Commercial Traders have increased their exposure to vol despite the dip in spot VIX and the VRT remains on a signal. Breadth improved slightly Friday but because of the holiday weekend, it was also one of the lowest volume days in nearly two months. Funds have spiked their allocation to equities at a record pace and the excitement around the SpaceX IPO (less than a month away) grows as investors ignore any possible market risk that is in front of them. I think that risk is greater than being price in right now. This week’s Spotlight Charts look at positioning data for Treasury bonds and two interesting relative performance charts for two sectors that could lead to a rebound.

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Summary of Models

Index & Sector Performance Summary

Volatility Risk Trigger