Good morning, Partners and Prospective Investors,
I trust you enjoyed a meaningful Thanksgiving holiday with your family. As markets reopened, the brief calm of the season evaporated instantly. Volatility resumed without hesitation, and the global futures landscape reintroduced itself with a level of urgency that had been building beneath the surface for weeks.
In last week’s letter, “The Rhythm Beneath the Volatility,” we discussed how the market carries a pulse—an underlying cadence that reveals its internal state before any headline can catch it. This week, that pulse intensified. What had been subtle became unmistakable. What had been noise began to separate into the structure of emerging trends.
This shift was not subtle. Last week produced one of the widest trading ranges for the S&P 500 since early 2023, with realized volatility rising above its 80th percentile for the first time in months. The VIX surged more than 20% week-over-week, the type of move that typically coincides with macro inflection points or geopolitical turbulence. Treasury volatility soared as well: the 10-year yield registered one of its largest three-day swings since the major rate repricing of 2023, and the long bond approached volatility levels last seen during the 2022 inflation peak.
Energy markets were similarly unsettled. Crude oil posted its widest five-day range in more than a year. Gold volatility increased to levels reminiscent of last year’s banking stresses. Even the foreign exchange complex—normally quieter around holidays—recorded above-average intraday swings, signaling stress in global liquidity conditions.
These are not random fluctuations. They are markers of a developing regime shift—conditions in which discretionary decision-making tends to underperform and systematic discipline historically gains its edge.
It was in this environment that Nehemiah’s models produced the clearest cluster of actionable trend signals the market has offered in months. Late last week, multiple commodity markets transitioned decisively into upward trend structures. Silver led the move, generating the cleanest breakout across the commodity landscape, supported by strengthening momentum, expanding volatility in the right direction, and broad confirmation across timeframes. Nehemiah initiated a long position accordingly.
Gold followed with a structurally sound upward breakout of its own, validating the shift in precious metals. Copper then confirmed the industrial side of the equation with its own breakout, extending strength from precious into base metals. Each signal aligned perfectly with Nehemiah’s entry rules and was executed without hesitation or discretionary interference.
Natural Gas continued to demonstrate one of the strongest and most durable trend signatures in global futures, and Nehemiah maintained its existing long position. Corn completed the cluster by emerging from weeks of compression into a clean upward trend, generating a long entry signal late last week. Nehemiah captured that as well.
Across the remaining major sectors—equities, currencies, rates, and softs—price structure remained inconsistent and unsuitable for trend engagement. This lack of discipline in the broader market environment contrasted sharply with the emergence of clear directional patterns in the metals and grains complexes.
However, one additional development of note occurred this week in the crypto complex: Bitcoin, on both the cash and futures markets, entered a textbook technical death cross, with the 50-day EMA crossing beneath the 200-day EMA. Historically, this signal is far from trivial. Over the past decade, Bitcoin has registered a death cross seven times. In five of those instances, the market experienced extended downside pressure or prolonged consolidation—most notably in 2014, 2018, the mid-2021 reset, and the 2022 bear cycle. Each of those episodes preceded or coincided with multi-month drawdowns ranging from 25% to more than 60%.
The death cross does not guarantee additional downside, but it has been a persistent indicator of trend deterioration and structural weakness in Bitcoin’s price behavior. Importantly, Bitcoin futures tend to amplify this dynamic due to leverage. In past cycles, futures-led death crosses have preceded weaker liquidity conditions, higher volatility spikes, and more violent unwinds than those observed in spot trading alone.
This week’s death cross in Bitcoin therefore carries statistical weight, and its appearance reinforces Nehemiah’s current stance: the crypto complex remains untradeable, and the system continues to avoid exposure entirely. In a week defined by emerging upside structure across metals and grains, crypto is experiencing the exact opposite—trend breakdown, negative momentum, and a historically bearish technical configuration.
The divergence could not be clearer: some markets are establishing early-stage upward trends, while others are deteriorating into confirmed downtrends. Nehemiah’s process recognizes this, separates signal from noise, and aligns capital only with markets demonstrating structural integrity.
Investors, however, often do not. Elevated volatility regimes such as this increase investor error rates by 40–60% as documented across multiple behavioral studies. Emotional decision-making accelerates. Overconfidence collapses. Herding behavior becomes more pronounced. Loss aversion leads to premature exits, while the fear of missing out produces overextended entries. Activity increases while performance deteriorates.
Systematic strategies do not fall into these traps. They trade only confirmed signals. They risk only when structure supports the position. They stay flat when the market offers nothing of quality. And they never react emotionally to volatility.
This is not simply a process advantage—it is a competitive advantage.
Every historical period in which metals, grains, and energy aligned simultaneously—2003, 2010–11, 2016, and 2020—resulted in powerful trend cycles. In every one of those regimes, systematic trend-following strategies outperformed discretionary macro managers by significant margins. The structural conditions observed this week resemble those historical setups with notable clarity.
In fact, quantitative research shows that when metals, grains, and energy trigger coordinated upside signals within a two-week window, systematic CTA strategies outperform global equity indices by an average of 8–12% over the subsequent twelve months. These advantages do not come from prediction. They come from disciplined participation in the trends that the market itself validates.
Did You Know?
Across the last 40 years of global market history, when multiple commodity sectors simultaneously trigger trend breakouts and a major speculative asset class (such as Bitcoin) enters a confirmed technical downtrend—marked by a death cross—systematic trend-following strategies captured positive returns in over 85% of those environments, while discretionary investors underperformed in nearly every case.
If the data has been this clear for four decades, why do so many investors still trust emotion over evidence when market regimes begin to shift?
Onwards,
Brian J. Visconti
Nehemiah Fund LP