WEEKEND TRADE SHEET for 10/18/2025
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WEEKEND TRADE SHEET
Paid subscribers only · Issue #22 — Saturday, October 18, 2025
NOTE: I have adjusted the 10% break even rule going forward. Now, instead of moving your stop loss to break even when price rallies 10% above entry, you are going to move your stop loss 2% above break even. We’ve had quite a few that have rallied 10% only to pull back to our stop loss that we moved to break even. It’s rare that price moves that far back without hitting break even, so by moving our stop loss up to 2% above entry, on those that do pull back to our entry, we are still going to be able to lock in a 2% price move. Small profit in these cases is worth significantly more than break even.
Macro snapshot
Trade shock & Friday crash: markets flash-sold after renewed U.S.-China tariff rhetoric (100% tariffs announced Oct 10), which re-anchored risk-off positioning into last week and fed the large one-day drops on Oct 10-11. Tech and cyclicals were hit hardest. Reuters
Volatility & breadth: VIX spiked into the low-20s mid-week and printed as high as the low-20s/low-mid-20s on key days before settling near ~20-22 by week-end. Realized and implied vol jumped sharply on the tariff headlines. YCharts
Gold & safe-havens: Gold ripped higher, briefly setting fresh intraday records above the $4,300-$4,370 area before easing, reflecting a strong, headline-driven safe-haven bid. BullionVault
Data calendar disruption: the government shutdown continues to disrupt official releases. The BLS rescheduled the Sept CPI release to Oct 24, increasing the chance the coming week is data-noisy and that CPI will carry outsized market impact. Bureau of Labor Statistics
Price action this week: after the mid-week panic, the tape staged a volatile rebound into Friday’s close but breadth remains fragile — the market is trading headlines more than fundamentals right now. Investopedia
Takeaway: this week was a headline-driven risk-off → volatility spike cycle. The tariff shock re-priced risk premiums, pushed volatility higher, and sent capital into real assets (gold) and cash. Until headlines stabilize, expect rapid one-day moves; trade smaller, prefer clean technical triggers, and keep pre-defined trim/hedge rules.
Catalysts in view
Mon-Tue (Oct 20-21): ongoing tariff / diplomatic headlines — any escalation or rollback will move rates & risk.
Tue-Thu: Treasury auctions (mid-week) and bill settlements — watch front-end liquidity and bid coverage; weak auctions can amplify risk moves.
Fri (Oct 24) — 08:30 AM ET: September CPI (rescheduled) — the highest-leverage macro print of the week now that it’s back on the calendar. Expect outsized moves if headline or core beats/misses consensus.
All week: earnings (select tech / cyclicals) and Fed speaker cadence — corporate news will reallocate flows and Fed nuance will steer rate-expectation trading.
Why it matters: With CPI rescheduled and trade geopolitics still front-and-center, next week is an event window: small data surprises or tariff noises will create outsized moves. Treasury auction results will tell you whether fixed-income can absorb a volatility shock; CPI will decide whether the “cut optionality” narrative survives. In short: headlines + CPI = amplified directional risk.
Risk Gauge
VIX: mid-20s intraday this week; settled ~20-22 by end-week — elevated from recent lows and prone to quick spikes.
DXY (U.S. dollar): slightly firmer on safe-haven flows and risk-off repositioning (watch 98-99 as tactical handles).
10-yr UST: yields compressed then re-tested on intraday flows — watch auction coverage into mid-week for liquidity signals.
Gold: strong bid — briefly >$4,300 intraday; a conspicuous safe-haven move that signals cross-asset risk aversion.
Equities & crypto: both remain headline-sensitive; Friday saw a fragile rebound but breadth is weak and small-cap / high-beta remain vulnerable.
Risk read: headline-dominated regime with elevated tail risk. Practical implications:
Downsize position size (reduce per-trade R) until headlines calm.
Prefer limit / buy-stop entries and avoid initiating large long-duration exposures without explicit hedges.
Pre-price hedges (short-dated S&P put spreads or VIX calls) to cap single-day gaps into CPI or tariff headlines.
Monitor auction results closely — a weak Treasury tape can cascade into equity dislocations.
Fresh Trade Set-ups
(Aim: ≥ 20 % move in 14-30 days; longs ▲, shorts ▼)