Landon Phillips 9/13/26 Landon Phillips 9/13/26

Fed Rate Week — Human Override Likely

This week, the Federal Reserve is set to release a decision on rate hikes on Wednesday. At the same time, it appears that the signal has reset enough during last week's whipsaw lower to potentially signal another leveraged episode starting Tuesday.

For this exact scenario, the model allows for a "human override" which I plan to execute if the signal calls for leverage on Tuesday. The reasoning is simple, and reflects on the stated goal of the ROQ portfolio method: outperform the market by being fully invested in market indexes with selected times of leverage.

So far, the ROQ research portfolio is outperforming the S&P 500 by approximately 8 percentage points year to date, with a similar risk profile to the index itself. We could simply peg to the market indexes the rest of this year and claim victory. So, levering up the portfolio the day before a major risk event doesn't make much sense to me. If, on Thursday, the conditions are still sufficient for leverage, I'll let the model go as it is designed to do. Otherwise, we'll stay in an unleveraged position until there's a little more clarity from the Fed.

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Past performance is not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 9/9/26 Landon Phillips 9/9/26

Market Alert - Wave Failure, Leverage Off

Unfortunately, this wave did not behave as I would have liked, but that’s the very definition of an 80% probability of success.. two of ten waves are expected to fail and this was one of them. Tomorrow, at the market open, the algorithm will switch from the leveraged portfolio to the unleveraged bullish portfolio that tracks the indexes. The impact wasn’t too bad; the research portfolio only gave up 1.6 percentage points of alpha gained throughout the year, so things are still looking massively successful for the ROQ research portfolio on an annualized basis.

Landon Phillips 9/3/26 Landon Phillips 9/3/26

Market Alert — Bullish Entry Confirmed

Today the signal met the criteria for leveraged bullish portfolio construction. It is estimated that this wave has an approximately 80% probability of positive returns over the next 14 days.

Importantly, 80% probability is not 100%. It is important to monitor this position closely and have a defined downside exit strategy should the wave break down prematurely.

Market analysis and this alert were conducted and written with the assistance of AI analysis under human oversight.

Landon Phillips 9/2/26 Landon Phillips 9/2/26

ROQ Market Alert: Trough Complete, Pivot Soon

A short market note.. The ROQ signal has reached satisfactorily low levels to call the trough formation substantially complete. There may still be some more movement as the “U” shape takes hold, but we’re pretty much at the lowest point that the Signal can achieve. The ruleset will look for some confirmation before an official bullish portfolio construction notice, but that could come before the end of the week. Historically, this kind of setup results in 70-75% probability of positive gains in the next 14-21 days.

Landon Phillips 8/30/26 Landon Phillips 8/30/26

ROQ Indicators Show That a Trough Is Forming

The current wave peaked around August 15th, and since then the signal has been in a slow and steady decline down the backside of the wave. The algorithm was a little late to exit from the leveraged position, leading to some give-back on performance. This is something that could be avoided with a little human input. The wave had outperformed mightily, and it would have made sense to transition to an unleveraged position given the run we'd had.

Entering the wave on July 28, the research portfolio was already ahead of the S&P 500 by over 8 percentage points year to date, the result of disciplined defensive positioning and earlier bullish episodes. The wave itself added approximately 2.5 additional percentage points of outperformance, bringing the year-to-date lead to nearly 11 points at the wave's peak. That lead has settled back to just under 11 points following the corrective period since.

Year-to-date performance through August 28:

ROQ Research Portfolio: +22.3%
S&P 500: +12.4%
Alpha vs. S&P 500: +9.9 percentage points
Maximum Drawdown: -9.5% (vs. S&P 500's -9.1%)

Risk-adjusted metrics vs. S&P 500:

Sharpe Ratio: 1.44 vs. 1.08
Sortino Ratio: 2.45 vs. 1.67
Calmar Ratio: 4.10 vs. 2.15

Now, the wave is showing signs of trough formation. The internal indicators have been in oversold territory for several sessions. This is the pattern that historically precedes quality bullish signals in this model. It is reasonable to expect that the signal will give us a bullish turn in the next few trading sessions. The question will be whether we have another leveraged entry opportunity, or simply a return to the unleveraged growth allocation. We'll see in the coming days.

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 8/16/26 Landon Phillips 8/16/26

Research Portfolio Outperforms Mightily

This wave of the market cycle has been a notable success for the ROQ theory. The signal set up a Bullish Entry (meaning 2.8× leverage applied to the indexes) on July 28. The fascinating thing is that my human intuition wasn't fully onboard with the call at the time; it felt a little early. But this is a research portfolio, so I let the system and the rules run as they're designed.

It turns out, the model was correct.

Since the July 28 entry the research portfolio has significantly outpaced every benchmark I track. The leveraged position is up over 15% against the S&P 500's 5% gain over the same period, more than 10 percentage points of outperformance from a single signal. Year to date the picture is equally strong:

ROQ Portfolio: +28.4%
S&P 500: +13.5%
EW4 Equal Weight Passive: +16.6%
Alpha vs SPY: +14.9pp

If this were a managed portfolio, I'd exercise a little human judgment at this point and turn off the leverage. The signal is near the crest of the wave, and there's no need to be greedy. The research portfolio could coast to the end of the year and still be a huge success.

But the rules are the rules. The stop hasn't triggered, both indicators are still rising, and VIX is calm. So the leverage stays on — and we find out together what the model does next.

Looking forward, the ROQ research portfolio goes into next week with 2.8× leverage still applied. I'm anticipating a switch to either no-leverage or Defensive sometime next week as this wave completes.

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 7/26/26 Landon Phillips 7/26/26

The Trough Is Forming, But Patience Is Still Required

The ROQ portfolio has been in its Defensive allocation since July 9. Sixteen trading days in, the internal structure of the market is showing early signs of a potential turn, but the data isn't mature enough yet to call it a recovery with conviction.

The Defensive Period in Review

The allocation did its job, protecting capital relative to the growth benchmarks while the market worked through a meaningful correction.

Defensive: −1.26%
EW4 Passive: −1.56%
Bullish Continuation (counterfactual): −1.88%
S&P 500: −0.87%

Defensive outperformed both the passive EW4 benchmark and what the growth allocation would have returned by a meaningful margin. SPY edged out Defensive during this stretch; the Dow component of the Defensive allocation underperformed the broader S&P 500 during this particular correction, creating a modest drag. That's the expected trade-off.

The broader picture remains intact. Since inception, the portfolio's lead over SPY stands at nearly 7 percentage points. The Defensive period trimmed that lead modestly; that's exactly what a corrective phase is supposed to do, and the conservative posture limited the damage relative to staying in the growth allocation.

The Trough Is Forming

In recent posts, I've noted that the internal reset appeared incomplete, and the ROQ Signal hadn't reached the deeply oversold levels that historically precede quality recovery signals. That began to change this week. The primary signal dropped to its lowest reading since the May trough, reaching deeply oversold territory for the first time this cycle, before turning up modestly on Friday.

Friday's close did produce a Day-1 signal under the model's entry criteria. If Monday confirms the same conditions, a transition out of Defensive executes at Tuesday's open. Whether that transition comes with leverage or without depends on where VIX closes Monday. At 18.58 it clears the gate, but it doesn't leave much room.

I'm watching this closely rather than anticipating it. The setup is better than it has been at any point since May. But better isn't the same as confirmed, and the model requires two consecutive days of agreement before acting. Monday's close will tell us a great deal.

Where Things Stand

ROQ Portfolio (inception to date): +15.23%
S&P 500: +8.26%
EW4 Passive Benchmark: +12.13%
Alpha vs SPY: +6.97pp

Landon Phillips 7/8/26 Landon Phillips 7/8/26

Market Alert: Research Portfolio Shifting Defensive

The ROQ Wave-State Model has confirmed a Defensive signal as of today's close. The two-day cooldown has been satisfied and the portfolio transitions to the Defensive allocation at Thursday's open.

The signal developed over the past two sessions as both the breadth indicator and momentum declined simultaneously, with the breadth indicator falling back below a key structural level after a brief push above it last week. This is consistent with the cautionary thesis discussed in recent posts; the corrective phase that preceded the current advance never fully reset, and the subsequent move higher lacked the internal conviction to sustain itself.

The Defensive allocation shifts the portfolio to a more conservative posture: heavier weighting in the broadest, most stable index ETFs and reduced exposure to the growth and small-cap names that have been under pressure.

The model goes where the signal points. Today it points to Defensive.

Where Things Stand

ROQ Portfolio (inception to date): +15.23%
S&P 500: +8.26%
EW4 Passive Benchmark: +12.13%
Alpha vs SPY: +6.97pp

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 6/20/26 Landon Phillips 6/20/26

A Weak Impulse; The Skipped Trough Matters

The model has been in a Bullish Continuation portfolio setup since June 15. The move was correct, and the portfolio has outperformed both benchmarks since the transition. But the advance has been thin from the start, exactly as flagged last week when I noted the corrective phase never fully reset before the move higher began.

The data since the transition continues to support that caution. The internal structure has shown limited conviction, consistent with an advance still working off a single geopolitical catalyst rather than a properly consolidated base.

Despite that, the portfolio has outperformed both the S&P 500 and the EW4 benchmark since the transition. The growth-tilted allocation captured the early strength of the move, and the lead has held even as the underlying signal has weakened.

Given the pattern of deterioration in the signal this week, a Defensive transition next week would not surprise me.

Where Things Stand

ROQ Portfolio (inception to date): +17.20%
S&P 500: +9.06%
EW4 Passive Benchmark: +13.32%
Alpha vs SPY: +8.14pp

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 6/14/26 Landon Phillips 6/14/26

Transitioning to Bullish Continuation, With a Caveat

The model transitions to Bullish Continuation at Monday's open. The signal confirmed over two consecutive days, the breadth indicator cleared a key structural level for the first time this cycle, and the Defensive posture that the human override put in place last week did its job, cushioning Wednesday's sharp selloff before the market reversed sharply on geopolitical news Thursday and Friday.

The transition is called for per the ruleset, however this is not a clean wave setup.

The corrective phase that just ended never fully reset internally. The prior corrective cycle (the one that set up May's leveraged episode) produced a deep, sustained trough before recovering. This one didn't. The signal barely reached mid-range (about halfway down the wave slope) before the geopolitical catalyst pulled the market back up. That's not the internal structure that typically precedes a strong, sustained advance.

The BC allocation is the right posture given the signal. But the wave didn't fully consolidate, which means this advance may have less fuel behind it than the last one.

Where Things Stand

ROQ Portfolio (inception to date): +15.57%
S&P 500: +8.33%
EW4 Passive Benchmark: +11.98%
Alpha vs SPY: +7.24pp

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 6/6/26 Landon Phillips 6/6/26

ROQ Model Transitions To Defensive

Two significant model events occurred this week. The first was the clean close of the inaugural V3.0 leveraged episode. The second was the first activation of the human override module. Together, they illustrate how the ROQ model is designed to work, with mechanical rules and human judgment operating as a system.

The Leveraged Episode — Closed

The Bullish Entry position that opened May 22 ran for six trading days before the signal-based exit stop triggered on Monday, June 1. The stop executed exactly as designed, dropping the portfolio to the unleveraged Bullish Continuation allocation at Tuesday's open.

The final episode results:

May 22: +1.49% vs SPY +0.39%
May 26: +3.40% vs SPY +0.66%
May 27: −0.07% vs SPY −0.02%
May 28: +1.70% vs SPY +0.55%
May 29: +0.50% vs SPY +0.25%
June 1: +0.62% vs SPY +0.27%

Episode total: +7.85% leveraged vs SPY +2.13% — outperformance of +5.72pp in six trading days.

The stop exited the position at a natural top, capturing the gain and stepping aside when the signal deteriorated. That's exactly what it was designed to do.

The Human Override

After the leveraged episode closed, the portfolio held the unleveraged growth allocation through a volatile week that ended with a sharp, broad market selloff on Friday. Based on the internal signal structure and 15+ years of pattern recognition, conditions deteriorated in a way that warranted moving to Defensive ahead of the weekend rather than waiting for the mechanical rules to complete their normal cycle. The mechanical rules would have required one more day of downside to trigger a portfolio shift, but given the nature of what I’m observing, I decided to apply the human override a day earlier.

I activated the human override on Friday. The portfolio transitions to Defensive at Monday's open. As a reminder, Defensive means that we’re still fully invested in the market, just in a portfolio construction that historically minimizes losses during the down cycle of the wave.

The human override isn't a departure from the system… it's part of it. The model specification includes an explicit override module for exactly these situations, where judgment and experience can act faster than the mechanical rules allow. Using it transparently, with documentation, is how it was designed to be used.

Where Things Stand

ROQ Portfolio (inception to date): +14.38%
S&P 500: +7.72%
EW4 Passive Benchmark: +9.91%
Alpha vs SPY: +6.67pp

Friday's selloff trimmed the cumulative return. The Defensive allocation is now in place heading into next week.

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 6/1/26 Landon Phillips 6/1/26

ROQ Alert: Status Change, Leverage Removed

The ROQ Wave-State Model's first leveraged episode under Version 3.0 is now closed. The defensive stop triggered today, which calls for removing leverage at tomorrow's open and transitioning the portfolio to the unleveraged Bullish Continuation allocation. The episode ran six trading days, massively outperformed our benchmarks, and exited exactly as the rules prescribed. Here's the full account.

The Entry

The setup was described in last week's post. After nearly three weeks of base-building, the breadth signal and momentum indicator turned up sharply on Wednesday May 20. Thursday confirmed. The leveraged position engaged at Friday May 22's open with VIX at 16.90 — well clear of the gate.

The Episode

Six trading days. Here's how it played out:

May 22: +1.49% (portfolio) vs +0.39% (SPY)
May 26: +3.40% vs +0.66%
May 27: −0.07% vs −0.02%
May 28: +1.70% vs +0.55%
May 29: +0.50% vs +0.25%
June 1: +0.62% vs +0.27%

Episode total: +7.85% leveraged vs SPY +2.13% — outperformance of +5.72pp in six trading days.

The Stop Triggered Today

Friday May 29 both indicators declined simultaneously for the first time since entry. That was Day 1. Today, Monday June 1, both fell again. Day 2 confirmed. The stop triggered.

This is worth pausing on. The stop mechanism exists precisely for this moment — not to prevent losses, but to exit a leveraged position when the signal that justified it is no longer present. The position entered at deeply oversold levels, rode an orderly advance to overbought levels, and the stop found it at a natural top. That's the sequence working as intended.

Tomorrow's open the portfolio transitions to Bullish Continuation — same ETF allocation, no 3× instruments. The unleveraged growth posture stays in place until either the signal deteriorates into Defensive or a new Bullish Entry setup forms.

Where Things Stand

ROQ Portfolio (inception to date): +18.27%
S&P 500: +10.78%
EW4 Passive Benchmark: +12.93%
Alpha vs SPY: +7.49pp

The first V3.0 leveraged episode contributed approximately +6.96pp to the cumulative return. The remaining lead over SPY — built entirely through allocation rotation since December — now stands at +7.49pp in total. Both sources of alpha are on the scoreboard.

The model moves to Bullish Continuation tomorrow, and the model could quickly switch to Defensive. Watching for what comes next.

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 5/25/26 Landon Phillips 5/25/26

A New Version, A New Signal

The ROQ Wave-State Model has done exactly what it was designed to do since its inception in December 2025. By rotating tactically between a defensive allocation and a growth-oriented allocation, guided entirely by the internal structure of the market rather than price prediction, the portfolio has outperformed the S&P 500 through allocation discipline alone. Just systematic rotation based on measurable probabilities derived from the signal.

That foundation is solid. And after several months of live operation, I went back to the data to ask whether the model could be improved.

The Upgrade

After extensive backtesting across ten years of historical data, I've revised the ruleset that governs ROQ portfolio construction. Version 3.0 expands the conditions under which the model will deploy leverage, adds a hard volatility gate requiring VIX below 20 at any leverage entry, and introduces a signal-based exit stop that automatically removes leverage if both indicators deteriorate simultaneously for two consecutive days. The result is a more responsive model with better downside protection built in.

The numbers speak for themselves. Against the S&P 500 over ten years:

Cumulative return: V3.0 +692% vs S&P 500 +239%
Annualized return: V3.0 23.2% vs S&P 500 13.1%
Maximum drawdown: V3.0 −34.7% vs S&P 500 −34.1%
Sharpe Ratio: V3.0 0.916 vs S&P 500 0.485
Sortino Ratio: V3.0 1.176 vs S&P 500 0.588
Calmar Ratio: V3.0 0.544 vs S&P 500 0.258

Better returns. Better risk metrics. Same maximum drawdown (which occurred during the COVID-19 pandemic.) Every metric improved without adding tail risk. That's a rare combination and the reason I'm confident making the change.

I applied V3.0 retroactively to the actual live period data that the model had never seen. It would have returned +15.82% versus the +11.42% actually recorded, with the additional return coming from four specific leveraged days the original criteria missed. That out-of-sample check gave me the confidence to move forward.

Today's Signal

This week, the model produced its first Bullish Entry signal under V3.0 criteria. After nearly three weeks of base-building, the momentum indicator was grinding along deeply oversold levels while the market moved modestly higher. Both the breadth signal and momentum turned up sharply on Wednesday, confirmed on Thursday, and the leveraged position was engaged at Friday's open. VIX was sitting at 16.90, well clear of the gate. The setup was clean.

Friday returned +1.19% on the leveraged portfolio versus the S&P 500's +0.39%. The position remains open heading into next week, with both indicators still rising and the stop not triggered.

Where Things Stand

ROQ Portfolio (inception to date): +11.29%
S&P 500: +8.90%
EW4 Passive Benchmark: +10.81%

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 5/16/26 Landon Phillips 5/16/26

Defensive Shift Protects Downside

The ROQ Wave-State Model shifted to a Defensive posture at the open of May 12, completing a textbook transition that began with the first deteriorating signal on May 8. What made this transition notable wasn't just the outcome, it was the process.

The two-day cooldown rule is designed precisely for moments like this. When the signal first turned negative on May 8, the model held its Bullish Continuation allocation rather than reacting immediately. May 11 confirmed the deterioration, satisfying the cooldown and triggering the transition at the following open. That discipline was validated almost immediately: May 14 produced a brief one-day bounce in both indicators that looked like a potential recovery. Without the cooldown rule, the model would have rotated back to a growth posture, only to reverse sharply the very next day when the defensive signal resumed. The rule earned its keep.

The Defensive allocation (40% SPY, 40% DIA, 15% QQQ, 5% IWM) isn't a retreat from the market. The portfolio remained fully invested throughout, rotating toward a more balanced, stability-oriented mix. That positioning cushioned the week's roughest day on May 15, when a broad selloff hit small caps particularly hard, without sacrificing participation on the positive days earlier in the week.

Now 112 trading days into the live track record, the numbers are beginning to tell a story worth examining:

The comparison to SPY is straightforward: better return, better risk-adjusted performance across every measure. The comparison to EW4 requires a bit more context. EW4 is a passive, equal-weighted mix of the same four ETFs the model uses, rebalanced daily and never adjusted. It’s slightly higher raw return reflects a permanent tilt toward the more aggressive names in the portfolio. The model, by design, periodically rotates away from those names when conditions deteriorate.

What the numbers show is that this tactical rotation, the active work the model does, produces a comparable risk-adjusted result to simply holding everything equally, while doing so with meaningfully less day-to-day volatility. The model's Sortino Ratio of 1.873 essentially matches EW4's 1.869 with 87 basis points less annualized volatility. That is the early signature of the tactical approach working: similar reward, smoother ride.

The more compelling test will come in a genuine sustained downturn. EW4's permanent overweight to the high-octane names will amplify losses in that environment in a way the model's Defensive rotation is specifically designed to avoid. That chapter hasn't been written in the live period yet — but the mechanics are in place and, as this week demonstrated, functioning as intended.

The signals will tell us when conditions improve enough to shift back to offense.

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 5/11/26 Landon Phillips 5/11/26

Market Alert: ROQ portfolio switches to Defensive-Long status

Despite a positive day for equity market indexes, the ROQ signal showed further deterioration below the surface. This was day two of the required transition period, which dictates a change in portfolio construction. The change will take effect at the market open tomorrow.

Landon Phillips 5/9/26 Landon Phillips 5/9/26

Strong Week, But Defensive Signal Forming

Markets delivered another week of gains, with major indexes grinding higher despite choppy underlying momentum. The Wave-State Model captured the upside with the portfolio outperforming SPY by 76 basis points, though structural fragility beneath the rally triggered a defensive signal on Friday that could lead to repositioning next week.

The portfolio returned +3.11% for the week ending May 8 versus SPY's +2.35% and the equal-weight benchmark's +2.45%. The bullish allocation maintained since May 1 proved effective at capturing the rally, with higher exposure to growth and small-cap components providing the incremental performance edge. Week-to-week volatility was notable—SPY oscillated between a -0.37% decline on Monday and a +1.39% surge on Wednesday—but the framework's positioning stayed consistent throughout the chop.

However, Friday's session brought the first warning signal that the rally may be losing structural support. Both breadth and momentum indicators declined simultaneously, meeting the framework's criteria for a defensive trigger. This marks day one of a two-day confirmation period required before the portfolio shifts to a more conservative allocation. If the signal holds through Monday's session, the framework will transition to defensive positioning at Tuesday's open, reducing exposure to growth-oriented components ahead of a potential pullback.

The concern stems from the rally's character rather than its magnitude. While SPY has pushed to new highs, the advance shows signs of exhaustion on longer timeframes. Growth stocks have extended significantly from their moving averages following a near-vertical six-week rally, yet momentum indicators are failing to confirm the price action. This divergence between price and structure, where indexes make new highs without corresponding breadth or momentum confirmation, creates conditions where even modest weakness can accelerate quickly. The framework's defensive signal is responding to this structural fragility, positioning ahead of a potential mean-reversion move rather than reacting to it after the fact.

Since inception in early December, the Wave-State Model has delivered +8.86% versus SPY's +7.73% and the equal-weight benchmark's +9.62%. The portfolio has now moved into positive alpha territory against SPY (+1.13%), though it continues to trail the equal-weight allocation that maintains constant exposure to growth and small-cap components. The tactical framework's ability to outperform during this week's volatile conditions while generating the defensive signal before visible weakness validates the approach of using momentum and breadth structure to time positioning shifts rather than reacting to price declines.

QQQ has seen a moonshot upward thrust, caution is advised.

Performance Summary:

Week (May 1-8): ROQ +3.11% vs SPY +2.35% vs EW4 +2.45%
Since Inception (Dec 3 - May 8): ROQ +8.86% vs SPY +7.73% vs EW4 +9.62%

Author note: Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

Disclaimer: The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.

Landon Phillips 5/3/26 Landon Phillips 5/3/26

Consolidation Complete, Framework Switches Bullish

Markets completed a brief but textbook consolidation over the past week, building the foundation for what appears to be a resumption of the broader uptrend. After spending much of April in defensive positioning as wave structure compressed from extreme overbought levels, the framework transitioned to a more aggressive allocation on May 1 as internal momentum confirmed a turn off deeply oversold readings.

From April 24 through May 1, the portfolio delivered +1.24% versus SPY's +0.94% and the equal-weight benchmark's +1.01%. The period included a sharp trough formation on April 29, when momentum readings reached extreme oversold levels reminiscent of the March geopolitical selloff. The framework remained defensive through the consolidation, then pivoted to its bullish allocation as both breadth and momentum indicators reversed higher. The transition occurred at the open on May 1, positioning the portfolio to participate in the rally that emerged from the reset.

The consolidation followed the pattern expected after extended rallies: wave structure compressed through time rather than price, with the market digesting gains while underlying support held. Moving averages continued rising throughout the period, confirming that the pullback was consolidation within an uptrend rather than the start of a reversal. The framework's response—defensive during compression, aggressive as structure confirmed the turn—aligned with how tactical allocation should function during healthy corrections.

Since inception in early December, the Wave-State Model has delivered +5.57% versus SPY's +5.25% and the equal-weight benchmark's +7.00%. The portfolio continues to beat SPY through multiple market regimes while trailing the equal-weight allocation that maintains constant exposure to growth and small caps. This performance spread reflects the trade-off inherent in tactical frameworks: risk management during drawdowns in exchange for some opportunity cost during sustained rallies. The framework now holds a more aggressive allocation as structure supports continued participation in the uptrend.

Performance Summary:

Week Period (Apr 24 - May 1): ROQ +1.24% vs SPY +0.94% vs EW4 +1.01%
Since Inception (Dec 3 - May 1): ROQ +5.57% vs SPY +5.25% vs EW4 +7.00%

Author note: Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

Landon Phillips 4/25/26 Landon Phillips 4/25/26

Wave Compression: Consolidation After Strong Rally

The past two weeks have demonstrated an important aspect of wave-based momentum frameworks: strong rallies often require periods of consolidation where internal structure resets even as prices hold steady or continue higher. Markets extended the recovery from the March geopolitical selloff, with SPY rallying over 5% from early April through mid-month before entering a healthy consolidation phase. The framework navigated this period with multiple state transitions as momentum oscillators worked off extreme overbought conditions.

From April 10 through April 24, the portfolio delivered approximately +4.65% versus SPY's +5.07%, underperforming by roughly 40 basis points during this rapid advance. The underperformance came from defensive positioning during key portions of the rally—the framework remained in its defensive allocation from April 7-13 as wave structure signaled caution, then briefly shifted to a more aggressive posture from April 14-20 before returning to defensive positioning on April 21. The wave structure peaked on April 17 with momentum readings in extreme overbought territory, then began compressing over the following week as the market consolidated gains. Interestingly, SPY actually gained ground during this consolidation phase even as internal breadth and momentum readings fell significantly, illustrating how wave compression can occur through time rather than price.

The current consolidation is markedly different from the March trough. During March, the wave structure collapsed into deeply oversold territory as moving averages rolled over and breadth deteriorated across the board. The current environment shows wave readings compressing from extreme highs while the underlying trend structure—captured by rising 20-day moving averages—remains intact. This type of consolidation typically resolves more quickly than trough formations because the framework is digesting gains rather than repairing damage. The defensive positioning provides downside protection if consolidation turns into correction, while keeping the portfolio positioned to capture any resumption of the uptrend when structure confirms.

Since inception in early December, the Wave-State Model has delivered approximately +4.40% versus SPY's +4.39%, essentially matching the benchmark through significant volatility and multiple market regimes, while structurally de-risking the portfolio at the appropriate times. The framework has now navigated a major geopolitical selloff, a violent recovery rally, and a consolidation phase with state transitions occurring as structure dictated. The goal remains consistent risk management that preserves capital during adverse conditions and participates when opportunities emerge, even if execution isn't perfect during every market phase.

Performance Summary:

Two-Week Period (Apr 10-24): ROQ +4.65% vs SPY +5.07% (-0.42% underperformance)
Since Inception (Dec 3 - Apr 24): ROQ +4.40% vs SPY +4.39% (+0.01% outperformance)

Author note: Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

Landon Phillips 4/11/26 Landon Phillips 4/11/26

Navigating Geopolitical Volatility: Framework Delivers Through Market Extremes

The past two months have tested every dimension of the Wave-State framework. From late February through early April, markets grappled with escalating Middle East tensions that drove extreme volatility, a near 10% drawdown followed by a sharp 5% recovery in less than four weeks. The framework navigated this turbulent period without trying to predict headlines or trade geopolitical developments, relying instead on market structure to manage risk and capture opportunity.

The portfolio entered defensive positioning in late February as internal breadth and momentum deteriorated, well before geopolitical fears peaked. Markets bottomed on March 20 at SPY $648.57, having declined nearly 10% from recent highs. The wave structure spent three weeks building a proper trough in deeply oversold territory before reversing sharply higher. From the March 17 trough through April 10, the portfolio delivered +1.61% versus SPY's +1.29%, capturing the recovery while managing through five state transitions as volatility remained elevated. The defensive period from February 24 through March 17 underperformed by -0.62% as growth and small-cap segments within the defensive allocation were hit harder than large caps, but the positioning successfully limited exposure during the peak of the selloff.

The recovery phase proved challenging from an execution standpoint. The wave structure reversed violently—momentum surged 38 points and oscillator readings swung from single digits to extreme overbought levels in just three weeks. This created whipsaw conditions where the framework shifted between defensive and aggressive postures multiple times as signals triggered, cooled down, and reversed. The framework doesn't trade headlines or attempt to anticipate geopolitical resolution. It responds to what markets are doing, not what might happen next. In this case, the signals provided structure during a period when headline-driven volatility would have been nearly impossible to navigate through discretion alone.

Since inception in early December, the Wave-State Model has delivered -0.24% versus SPY's -0.65%, maintaining a +0.41% edge through multiple market cycles and significant geopolitical disruption. The framework's strength isn't perfection during every market phase; it's consistent risk management that preserves capital during drawdowns and captures recoveries when the structure confirms. The past two months demonstrated both: defensive positioning during the worst of the decline, followed by participation in the recovery despite choppy execution.

Performance Summary:

Since Inception (Dec 3 - Apr 10): ROQ -0.24% vs SPY -0.65% (+0.41% outperformance)
Trough Period (Feb 24 - Mar 17): ROQ -3.03% vs SPY -2.41% (-0.62% underperformance during selloff)
Recovery Period (Mar 17 - Apr 10): ROQ +1.61% vs SPY +1.29% (+0.32% outperformance)

Author note: Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

Landon Phillips 2/21/26 Landon Phillips 2/21/26

Wave Structure Improving, Portfolio Positioned for Participation

This week delivered what the Wave-State framework has been waiting for: sustained momentum confirming the market is building strength off the trough. After two weeks of choppy action following the shift to a more aggressive allocation, the underlying structure has finally started to cooperate.

From February 13 through February 20, SPY gained +1.13%. The portfolio gained +0.94% during the week, underperforming SPY by a small margin as the rally was led more by large caps than by the growth and small-cap segments where the aggressive allocation is tilted. The important development isn't the weekly performance, it's the wave structure. After spending most of February testing whether the trough had truly formed, the market has now delivered sustained rising momentum and strengthening participation across indexes. This is what the framework looks for when assessing whether a wave has exited the bottom.

Since shifting to the aggressive allocation on February 11, the portfolio is down -0.52% versus SPY's -0.39%. That modest underperformance reflects the timing of the shift—it came just ahead of a sharp selloff on February 12, followed by consolidation before this week's rally materialized. The framework stayed disciplined through that volatility and is now positioned to participate as the wave builds.

Since its inception in early December, the portfolio is up +1.71% versus SPY's +0.81%, for +0.90% of outperformance. The edge continues to come primarily from the defensive period in late January and early February, which successfully preserved capital during the trough-building phase. The aggressive positioning over the past two weeks has been flat to slightly negative relative to the benchmark, but the structure is improving and the framework remains patient.

The goal isn't perfection—it's alignment. The defensive shift in late January worked because it recognized the wave was rolling over and needed time to build a base. The shift back to aggressive positioning on February 11 was early, but the framework doesn't demand perfect entries. It demands staying invested, managing risk, and positioning the portfolio to capture the next leg when the structure confirms. This week, the structure confirmed.

Author note: Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

RedOakQuant.com