Defensive / Risk-Off Rotation
Play defense when SPY breaks
What it is
Rotate into defensives — long-duration Treasuries (TLT), gold (GLD), utilities / staples (XLU / XLP), the dollar (UUP) or an inverse hedge — when risk-off signals fire.
When it works
VIX spiking, yield curve / claims deteriorating, SPY breaking key support, or a recession / shock signal emerging.
Why the setup pays
Direction = Long on assets that rise when risk assets fall. The most regime-driven family — the macro and shock signals are effectively the entry trigger.
The market it wants
Contraction / shock. Contraction and risk-off shocks (geopolitical or systemic) — the classic flight-to-safety basket.
What goes wrong
A false alarm (whipsaw back to risk-on); defensives don't all work every time; duration can fall if rates spike.
Where it sits in the book
Defensive / Risk-Off Rotation belongs to Linear Risk Premia & Style Factors, the group whose edge comes from mean or trend of the distribution. That group looks for sustained trend extensions, or clear overextensions for mean-reversion, and its risk profile is dynamic / path-dependent directional.
Run this on the live market
This is the thesis the engine scans with. It reads the whole universe, scores what matches, and prices the structures against fair value.
risk-off rotation basket — TLT, GLD, XLU, UUP — what leads when SPY breaks support
No account needed to run it. The free trial runs on the same live data a paid account gets.
Educational material, not investment advice. Nothing on this page is a recommendation to trade any security or structure. Options trading involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future returns.