Despite the market’s resilience and the return to a “quiet” Turbulence regime, the SPX DeMark setup now flashes tactical caution. Sequential and Combo ‘13’ sell signals on the S&P 500 suggest potential trend exhaustion, but with no VIX backwardation to trigger contrarian risk-on sentiment, a wait-and-see posture is prudent. All eyes on next week’s confirmation window. This kind of multi-factor insight is part of our research at www.20quant.eu now available by subscription. Market Breakdown SPX DeMark Indicators The S&P 500 chart displays both a Sequential and Combo 13 sell signal completed in early June, suggesting trend exhaustion. Importantly, we are still within the 12-bar window in which a reversal should occur for the signal to remain valid. Price action has softened modestly since, failing… Read more
VIX vs. Turbulence: Why Volatility Alone Isn’t Enough
This issue compares the traditional Volatility Index (VIX) with the Turbulence Index (TI), emphasizing why the latter offers a structurally richer signal for portfolio risk management. While the VIX gauges expected volatility, the Turbulence Index measures statistical unusualness—accounting not only for magnitude shifts but also for breakdowns in asset correlations. The distinction is non-trivial. In crises, correlation behavior changes before volatility spikes. This newsletter outlines the academic foundations, empirical validation, and practical advantages of TI over VIX for modern portfolio construction. The Conceptual Gap: Why VIX Isn’t Enough The VIX, widely interpreted as the “fear gauge,” reflects the market’s consensus on future volatility. Yet its scope is univariate: it focuses exclusively on the magnitude of expected price fluctuations, neglecting how assets behave in relation… Read more
Why Global Investors May Start Reducing USD Exposure
The U.S. moves toward taxing foreign capital — and it’s not just about politics The “One Big Beautiful Bill” (OBBB), recently passed in the U.S. House and now pending Senate review, contains a little-known clause — Section 899 — that could have disproportionate market consequences. While its political message is loud, its financial implications may speak even louder: a structurally weaker dollar and a reassessment of U.S. asset exposure by global investors. From Tariffs on Goods to Tariffs on Capital Section 899 introduces a framework for taxing passive income (such as dividends or interest) earned by foreign investors in U.S. assets — but only if those investors are based in jurisdictions that Washington deems “discriminatory” toward the U.S. (i.e., countries with digital services taxes… Read more