Daily Market Brief, Nov 05: RECOVERY day 1, VIX 16.61, breadth 44% bullish

Regime & desk call

HMM regime: RECOVERY, day 1 (flipped from BEAR on 2026-11-04). Gross leverage scalar 3.00×, risk-on yes.

Desk synthesis. The model has flipped into a RECOVERY regime, supporting gross exposure at a 3.00× leverage scalar while the risk‑off probability sits at 29.4%. Breadth remains modest with 44% of the universe bullish, rates are anchored at 4.61% on the 2‑year and 4.95% on the 10‑year Treasury with a 2s10s spread of +34 bp, the VIX term structure is in contango (VIX9D/VIX 0.915, VIX/VIX3M 0.884) and the VIX itself is cheap at 16.61, and sector rotation favors Consumer Discretionary (+3.63%) and Financial Services (+3.48%) while Industrials (‑1.00%) and Energy (‑4.64%) lag. A decisive shift in the call will hinge on the upcoming 4‑Week Average Jobless Claims print of 196.00 at 08:30 ET.

Snapshot, corridors & sectors

Cross-asset pairs (60-session z-score of the log ratio, or of the price spread for Brent–WTI)

VIX term structure (Cboe implied-vol indices by horizon; ratios above 1.00 mean the curve is inverted)

Vol of VIX index: 90.41.

Index corridors (ATR HiLo trail and flip line)

Sector rotation (S&P 500 constituents, equal-weight 1D change)

Leaders: Consumer Discretionary, Financial Services. Laggards: Industrials, Energy.

Calendar, policy & wire

US macro, Thu Nov 05

Last session's high-impact prints, Nov 04

Market wire

• Ed Yardeni Says 5% Treasury Yields Now Attractive · Bloomberg, 2m ago
• Top S&P 500 Stock Names Implied Volatility · FinancialJuice, 14m ago
• Stock futures mixed after big rally following Democrats' decisive midterm wins · CNBC, 59m ago
• The BOE Hasn't Hiked Rates Since the Iran War Started. Why That's About to Change. · Barron's, 11h ago
• This year’s worst-performing S&P 500 stock is finally seeing some major relief · MarketWatch, 5h ago

Tape check: The headline theme of a fresh equity rally on Democrats’ decisive midterm wins and “attractive” Treasury yields is confirmed by the S&P 500’s +1.58% advance (with the Dow up +3.03%) alongside the 2‑year and 10‑year yields ticking higher by 2 bp and 4 bp respectively, indicating absorption of any lingering concerns. By contrast, the BOE‑rate‑hike speculation runs counter to the tape, which shows broad equity strength and a VIX plunge of –20.26% rather than the downside that a new rate‑hike narrative would normally provoke.

Prediction markets (Kalshi / Polymarket; Fed odds)

Flow: insiders, Street, squeeze & Congress

Congressional trade disclosures, last 30 days (538 disclosed trades; Congress tracker)

Options desk & hedge

Income plays (CSP ledger · covered calls). POP is the historical hit rate of the same strike distance and tenor.

Directional convexity (bull spreads · long calls)

$100K beta-1 portfolio hedge (long puts). VIX 16.61 is under the 22 gate: puts are priced for buying.

SD50 month-to-date

Holding month November 2026, Nov 01 - Nov 04 (MTD). Live tracker.

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Data as of the Nov 04, 2026 close. Method: methodology · track record · screener.

This brief is independent quantitative research, not investment advice. Signals, backtests and option ledgers are model outputs; past results do not guarantee future returns. Options carry risk of total loss. Position sizing, execution and risk management remain the reader's responsibility.