The Market Brief
U.S. futures edged higher early on Tuesday, as investors took a breather in the final trading session of a quarter that saw equities post the biggest gains in years.
Impact Snapshot
🟥 Consumer Confidence - 10:00am
🟥 JOLTS Job Openings - 10:00am
Macro Viewpoint
US index futures rose modestly on the last day of a quarter set to be the S&P 500’s best in six years. Global stocks are holding their gains as investors gear up for an earnings season analysts expect will be driven by the AI investment boom, with falling oil prices easing inflation concerns and offering further support.
Equities have held up despite a tense geopolitical backdrop, an oil price shock, and concerns over AI spending, with hopes now pinned on earnings to offset last week’s selloff in semiconductors and tech.
Prime Intelligence
Part of what we do in this newsletter is express the operational relationship between trading and risk management through the mechanical layer of the market. It’s not just about what you do in the market, it’s about understanding what others are likely doing, and more importantly, those who actually move capital.
Yesterday we flagged the potential for this exact reversal at the open in our brief, released at 6:00AM ET, well before the move played out. The rejection came tick perfect at our first resistance level. By the time it happened, the broader market was scrambling to attach a headline explanation to price action we had already mapped out mechanically, hours in advance.
This is why volatility and risk management can’t be separated, even the systematic funds that size risk around it aren’t immune. Long short managers who size risk off realized volatility are down 3.1% in aggregate over the last five sessions, a -3.3 standard deviation event, the worst stretch since December 2023, with losses concentrated in the short leg. They’re still up 11.3% year to date, proof that volatility cuts both ways.
Key takeaway: markets reward those who understand the mechanics behind price action.Volatility isn’t just noise to react to, it’s the force that determines how much risk systematic strategies can carry, and how violently they can be forced to cut it.
For the daily trading plans and in-depth research, consider joining the paid version of the brief.
Join hundreds of subscribers already on the inside 👇
