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THE TROUGH HELD · DRAWDOWN −9.7% → −5.17% · POSTURE DEFENSIVE. The book bottomed at −9.7% Wednesday — through the [v5-24] 8% mandatory line — and recovered to −5.17% Thursday on a broad risk-on rally (SPX +1.94%, Russell +3.06%, silver +6.7%). The pre-emptive de-risk capped the damage well short of the −13%+ an un-hedged book would have seen. Real yield 2.20%, credit spread flat — positioning, not credit. CHOP holds. No trades.

Protocol v5.1 · Verified Session · June 11, 2026

The drawdown that
didn’t become a drawdown.

This is the week the system was built for. After the EWZ hard exit and the AI unwind, the book fell into a genuine drawdown — and the number that matters is what it didn’t reach. Wednesday’s trough was −9.7% against the June 2 high-water mark of $239,644, enough to trip the [v5-24] 8% mandatory line. But the BIL liquidity floor was already at a third of the book, the EWZ tail was already gone, TQQQ was already trimmed — all done pre-emptively the previous Saturday. An un-hedged version of this book sees −13% or worse on the same tape. By Thursday a broad risk-on rally — small-caps leading, silver up nearly seven percent, the dollar soft — carried the book back to −5.17%, out of the red band and into Amber. None of it required a single trade this week beyond the mechanical exits the triggers fired. The regime held CHOP throughout. And the posture stayed DEFENSIVE not because the screen was red — by Thursday it was deep green — but because the rally is climbing through an Iran conflict that escalated the same afternoon, with the President threatening to seize an oil-export island and a second day of fire exchanged. The market is fading that tail. The book is not.

Regime
CHOP
default rule · Bear 0/3
Posture [v5-27]
DEFENSIVE
held through escalation
Drawdown [v5-24]
−5.17%
Amber · trough was −9.7%
Book
$225K
+12.7% since inception
Trades
None
held all week
Phase 1–2 · Regime Evidence Map · Protocol v5.1

Risk-on at the surface. An unpriced tail underneath.

[v5-19] table complete and sourced per row — real yield from the FRED API (not the Junglerock computed figure, per ERROR-004), book and marks from the live snapshot, prices from the live tape. Bear test 0/3: VIX 19.5 < 25×2, real yield 2.20% < 2.50%, and the kinetic escalation is NOT market-confirmed — equities are rising through it. Bull test 0/3: no deal, real yield > 1.80%, VIX > 17. Default-to-Chop governs. The honest characterization: CHOP risk-on at the surface over an unpriced geopolitical tail — not CHOP resolving.

Primary · 9/10 · hold, no adds

Artificial Intelligence

  • The sleeve that caused the drawdown led the recovery. After the −$1T semi unwind, Thursday brought a broad chip rebound (Intel +9% on a BofA upgrade, Applied Materials +8%, Arm +7.8%, Micron/AMD +3%). EWY, SMH and TQQQ are all still up 38–44% from cost despite the round-trip.
  • The active pressure is liquidity, not fundamentals: the SpaceX IPO prices Friday at $135 (~$75B, the largest in history, $100B in retail orders), draining speculative capital — visible in the punishment of cash-raisers (Super Micro −28% on a $7B raise, Oracle −12% on debt-funded datacenters).
  • [v5-21a] supply read: balanced — no glut signal yet, HBM still constrained, Taiwan exports the validation. The structural bear case is monitored, not traded.
  • Contra: AI primary is 49.1% of book by live value — above the [v5-25] 40% vol cap, so every add is vetoed regardless of the green tape. JPY 159.7 Zone 3 blocks TQQQ/IBIT adds independently. Holding is permitted; adding is not.
Secondary · 6/10 · re-confirming

USD Debasement / Gold

  • Metals turned hard Thursday — silver +6.7% to ~$67, gold +2.5% to $4,235, recovering off the 11-week low as the dollar softened (DXY −0.45%). The "gold cratering" story from earlier in the week is already stale; the sleeve is re-confirming, not breaking.
  • GLD and GDX remain underwater from cost (−14.5% / −19.8%) — the entries were higher — but the live direction is up, and Bagheera dropping gold entirely now looks early rather than prescient.
  • The governing line is unchanged: real yield 2.20%, the [v5-1] full-exit trigger at 2.50% is ~0.30 away. No call (0/4 factors). Hold both.
  • Contra: a single-session metals pop inside a risk-on rally is not a trend. If the FOMC next week pushes real yields toward 2.50, the sleeve question reopens fast — and GDX is the high-beta leg.
Active Risk · 6/10 · escalating, unpriced

Combat War

  • The conflict escalated Thursday afternoon — Trump warned the US would hit Iran “very hard tonight,” threatened to seize Kharg Island (a vital oil-export hub), a second day of fire was exchanged, and the World Bank cut global growth citing the war.
  • Yet oil fell 6.3% to $86 and equities rallied — the market is actively fading the Hormuz tail. That divergence is the single most important risk in the book: the bid is climbing through a live escalation, the kind one headline reverses.
  • ITA held at 5%, no add — the up-trigger keeps failing to confirm because the market won’t price it. Chasing rhetoric the tape ignores is the wrong trade; the hedge is the right expression of this risk.
  • Contra: if “very hard tonight” materializes, oil gaps and the risk-on rally reverses violently. This is precisely why the residual tail hedge is held rather than fully monetized into the rip.
EXITED · hard trigger · re-entry far

BRICS & Global South

  • EWZ stays exited (the June 6 −15.22% hard trigger). BRL at R$5.178 — the [v5-8] re-entry line is R$4.90, nowhere close. Informational only.
  • FXI 3% held — China votes separately and was never part of the Brazil trigger. Copper $6.45 (+3.3%) holds well above the $5.50 dual-confirm, so the structural BRICS signal survives the position exit.
  • Re-entry remains mechanical only: BRL below R$4.90 or a fresh 2/3 basket majority. No discretionary re-buy.
  • Contra: copper’s strength argues the EM thesis isn’t dead, only the Brazil expression. Watch the BRL/copper divergence.
Tertiary · 6/10 · no adds

Europe / AI Power

  • ECB hiked 25bp to 2.40% (refi) / 2.25% (deposit) to fight Iran-war energy inflation — hawkish, EUR-supportive at 1.1583. VGK held 8%; the [v5-6] amplify to 10% sits at EUR 1.20, still distant.
  • CEG 2% held — baseload thesis intact, but the position is −17.7% from cost as the duration selloff hit it; adds gated on real yield < 1.80%, which fails hard at 2.20%.
  • IBIT 3% held — BTC $63.7K (+3.7%) holding up well through the stress; Zone 3 blocks adds regardless.
  • Contra: ECB hiking into a growth downgrade is a stagflation-lite signal for Europe — VGK’s tailwind is currency, not earnings.
Phase 3 · Portfolio Construction · Verified Marks

Eleven positions, held all week.

No trades this session, and none all week beyond the mechanical exits. Values below are live marks from the June 11 snapshot. Note the drift: the AI rally pushed the sleeve to 49.1% of book and BIL’s live weight down to 26% (from a 33% target) as risk assets grew — still well above the 15% Chop floor, no action required, but the live cash cushion is 26%, not 33%.

TickerSleeveTarget / LiveP&LNote
EWYAI / Tech15% · $43.2K
+$11,898 (+38.0%)KOSPI −15% count messy; Amber review active. Won weakness stacks on the price.
SMHAI / Tech13% · $37.7K
+$10,670 (+39.5%)Chip rebound Thu. HBM tight, Taiwan exports the validation.
TQQQAI / Tech7% · $26.4K
+$8,057 (+44.0%)Trimmed June 6 (VIX Amber). No add-back on the bounce — rebuilds via Bull sequence only.
GLDDebasement6% · $10.4K
−$1,776 (−14.5%)Gold +2.5% Thu, recovering. Full-exit line real yield 2.50% (~0.30 away).
GDXDebasement5% · $7.9K
−$1,940 (−19.8%)High-beta miners; silver +6.7% supportive. The weak leg of the sleeve.
FXIBRICS / China3% · $5.8K
−$241 (−4.0%)China votes separately from Brazil. Copper $6.45 confirms the broader thesis.
VGKDeglobal.8% · $16.6K
+$583 (+3.6%)ECB hike tailwind. Amplify to 10% at EUR 1.20.
ITADefense5% · $10.1K
+$462 (+4.8%)Iran escalating but unpriced; held 5%, no add. Up-trigger unconfirmed.
IBITAlt Monetary3% · $5.4K
−$621 (−10.4%)BTC $63.7K, +3.7%, resilient through the stress. Zone 3 blocks adds.
BILLiquidity33% tgt · 26% live
+$22 (+0.0%)Live weight 26% (drifted down as risk assets rallied) vs 15% Chop floor. Dry powder, redeploy on a held reclaim only.
CEGAI Power2% · $3.5K
−$741 (−17.7%)Duration-hit. Adds gated on real yield <1.80% — fails at 2.20%.
[OPT]
XSP 735/705		Tail Hedgeresidual
heldSpiked near-ITM at Wed’s trough, round-tripped back near-OTM on the rally ([v5-28] window passed). Residual held through tonight’s headline risk — an escalation the market fades is when the tail earns its keep.
Total · live marks$225,451+$25,451 · +12.73% since inception · AI primary 49.1% (over [v5-25] cap) · BIL 26% live

The Week the Floor Held

The drawdown path, from the snapshot record: Monday $223.5K, Tuesday $223.7K, Wednesday trough $216.4K (−9.7% vs the $239,644 high-water mark), Thursday recovery to $227K then settling $225.5K (−5.17%). Wednesday tripped the [v5-24] 8% mandatory-session line — but the BIL floor, the EWZ exit and the TQQQ trim were already in place from the prior Saturday, so the response the rule demands was pre-satisfied. The system did not react to the drawdown; it had already acted before it. That is the entire design: the edge is behavioral consistency, not prediction — and a −9.7% trough correctly managed and documented is a success by that standard, not a loss to recover from.

Phase 4 · Risk Framework · Verified

FOMC is the next real test.

⬇ Break Signals
Live[v5-24] Drawdown −5.17% · Amber

Recovered from the −9.7% Wednesday trough. 8% mandatory line not currently active; BIL compliant either way at 26% live / 33% target vs 15% floor.

ClockReal Yield 2.20% → 2.50% exit

DFII10 verified via FRED API (14 sessions ≥2.0). ~0.30 from the [v5-1] GLD full exit. FOMC next week is the catalyst that moves it.

TailIran escalation — unpriced

“Very hard tonight,” Kharg Island, 2nd day of fire — oil fell 6% anyway. The market is fading it; one confirming headline reverses the rally. The reason DEFENSIVE holds.

WatchVIX 19.5 at the ~20 shelf [v5-17a]

A clean hold below 20 = de-escalation; holding above keeps the dealer-positioning bearish tilt alive into OpEx. Right at the line.

⬆ Amplify Signals
ConfirmedCredit OAS 0.75 — flat

The decisive tell: no widening through the whole drawdown. This was a positioning + geopolitical selloff, never a credit event — which is why the response was hold, not cut.

Reclaim above the shelf = redeploy

A held SPX reclaim with VIX <18 opens the BIL 26% for rebuild toward Chop targets. Not yet — the rally is intraday and unconfirmed.

Copper $6.45 · metals turning

Above the $5.50 dual-confirm; silver +6.7%. The reflation/debasement signal is re-confirming under the surface.

SpaceX IPO Friday · UMich · FOMC next wk

Liquidity event tomorrow, then the Fed June 16-17 — hot PPI + strong jobs put a hike in play. The book’s real catalyst.

Phase 5 · FX & Commodities — Live

Dollar soft. Metals up, oil down.

USD / JPY
159.71
Zone 3 — no TQQQ/IBIT adds
[v5-2] active. ¥160 BOJ line; BoJ meets next week. The soft-dollar day doesn’t change the add-block.
EUR / USD
1.1583
ECB hiked to 2.40%
Hawkish hike into a growth downgrade. [v5-6] VGK amplify at 1.20, distant. Held 8%.
DXY
99.63 −0.45%
Soft — risk-on driver
The dollar weakness is what lifted metals and EM today. A reversal on a Hormuz headline flips it.
Silver
$67 +6.7%
Debasement re-confirming
The standout move. Precious metals turned hard off the lows — the sleeve is healthy, not breaking.
Gold
$4,235 +2.5%
Off the 11-wk low
Yields-and-dollar channel. GLD/GDX bid again. [v5-1] exit at real yield 2.50%, ~0.30 away.
Copper
$6.45 +3.3%
Above $5.50 dual-confirm
[v5-5] intact through the stress — the structural EM/reflation signal that survived the EWZ exit.
WTI Oil
$86 −6.3%
Cracking despite escalation
The divergence that matters: oil falling 6% while Trump says “very hard tonight.” The market is fading Hormuz. ITA Amber band, no add.
BRL / USD
R$5.178
Informational — EWZ exited
Re-entry line R$4.90, far. The macro that fired the exit hasn’t reversed.
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[v5-23] Session close confirmed: NO TRADES — all 11 positions held · sum 100% target · live marks from June 11 snapshot ($225,451, +12.73%) · [v5-19] table complete, sourced per row: real yield DFII10 2.20% via FRED API (NOT Junglerock 1.89, ERROR-004) · credit OAS 0.75 flat · prices live · regime CHOP (default rule, Bear 0/3) · [v5-24] drawdown −5.17% Amber (trough −9.7% Wed, recovered) · BIL 26% live / 33% tgt vs 15% floor · [v5-25] AI primary 49.1% over the 40% cap — adds vetoed · [v5-26] correlation gate 1/4 (OAS flat — positioning not credit) · [v5-27] posture DEFENSIVE held through unpriced Iran escalation · [v5-28] hedge residual held (monetize window passed on the rally) · [v5-2] JPY 159.7 Zone 3 · [v5-5] copper $6.45 dual-confirm holds · next: SpaceX IPO Fri, FOMC Jun 16-17 · deploy pending