BEAR regime at 100% confidence with 216-day persistence and 99.8% self-transition probability. The macro environment is structurally hostile: unemployment rising (4.4% vs 4.0% YoY), consumer sentiment collapsing (-21.3% YoY to 56.4), VIX elevated at 26.78 (above 20 threshold), and yield curve positive but flattening (0.51% spread). GDP growth remains strong at 5.42% YoY, but this is masking deteriorating labor market and consumer confidence dynamics. The regime is locked in a bear state with only 0.2% probability of bull transition and 98% self-persistence probability.

Restrictive but potentially nearing the end of the tightening cycle. Fed Funds Rate at 3.64% remains elevated relative to inflation (CPI at 2.66% YoY), maintaining a real rate of ~0.98%. The positive yield spread (0.51%) indicates the Fed is not currently inverting the curve, but the spread is narrow and vulnerable to further compression if growth slows. No imminent rate cuts are signaled, but the labor market deterioration (unemployment +40 bps YoY, jobless claims stable at 205k) suggests the Fed may pause or begin easing within the next 1-2 quarters if unemployment continues rising.

Inflation is moderating and well-controlled. CPI at 2.66% YoY is near the Fed's 2% target, indicating disinflation is progressing. This removes the urgency for further rate hikes, but also limits the case for aggressive rate cuts in the near term. The combination of stable inflation and rising unemployment creates a stagflationary risk scenario—growth is slowing while inflation remains sticky above target. This is the worst macro environment for risk assets.

Decelerating with recession risk rising. GDP growth at 5.42% YoY appears strong, but this is a lagged indicator (Q4 2025 data). Forward-looking indicators are deteriorating: consumer sentiment at 56.4 is at a 1-year low (-21.3% YoY), unemployment is rising (+40 bps YoY), and jobless claims, while stable, show no improvement. ISM Manufacturing Employment at 12,573 is weak relative to historical norms. Housing starts at 1,487k units (+9.5% YoY) show resilience, but this is likely to roll over as mortgage rates remain elevated and consumer confidence collapses. The yield curve is not inverted (0.51% spread), but the narrowness and recent persistence of the bear regime suggest a hard landing is increasingly probable within 2-3 quarters.

Explanation: Strong headwind. VIX at 26.78 and BEAR regime at 100% confidence create a risk-off environment that depresses growth-stock valuations. Consumer sentiment collapse (-21.3% YoY) signals demand destruction across enterprise and consumer AI spending. However, AI infrastructure has structural tailwinds (energy demand, government spending) that prevent a worse score. The theme is caught between macro headwinds and structural growth, resulting in a net negative but not catastrophic impact.

Explanation: Severe headwind. Rising unemployment (+40 bps YoY to 4.4%), collapsing consumer sentiment (-21.3% YoY to 56.4), and elevated rates (3.64% Fed Funds) create a triple threat to housing demand. Housing starts at 1,487k (+9.5% YoY) are still positive but will roll over as affordability deteriorates and consumer confidence erodes. REITs and construction are highly rate-sensitive; the positive yield spread (0.51%) provides no relief. This is the worst-hit theme in the current macro environment.

Explanation: Moderate-to-strong headwind. Manufacturing employment is weak (12,573), signaling reduced industrial demand for power. VIX at 26.78 depresses capital spending on grid modernization and renewable infrastructure. However, structural tailwinds (AI power demand, government infrastructure spending, nuclear renaissance) prevent a worse score. The theme is macro-sensitive in the near term but has long-term structural support. Prior sessions show this theme has been over-weighted relative to macro conditions.

Explanation: Mild headwind. Defense spending is relatively macro-insensitive and benefits from geopolitical instability (Iran thaw narrative notwithstanding). However, the BEAR regime and elevated VIX create near-term equity market headwinds that affect all growth stocks, including defense. Government spending remains robust, but equity valuations are compressed. The theme is the most resilient in a bear market, but still faces valuation pressure. Prior session narrative shift toward AI-defense platforms (PLTR Maven contract) provides a structural offset.

Explanation: Severe headwind. Quantum is a pure-play growth/speculation theme with zero near-term cash flows. VIX at 26.78, BEAR regime at 100%, and consumer sentiment collapse create a perfect storm for early-stage tech. Prior sessions show RGTI at -73.59% drawdown (2.9x the 25% threshold), indicating the market has already priced in severe distress. The theme is in capitulation and faces continued pressure until macro conditions stabilize and risk appetite returns.

Explanation: Moderate headwind. Biotech has structural tailwinds (GLP-1 revolution, aging population, CRISPR breakthroughs) but faces near-term macro headwinds from elevated VIX (26.78), BEAR regime, and consumer sentiment collapse. Healthcare spending is more resilient than discretionary spending, but biotech equity valuations are compressed in a risk-off environment. The theme is less cyclical than AI or quantum but still faces valuation pressure. Defensive characteristics provide some protection.

Explanation: Severe headwind. Crypto is the most macro-sensitive theme, highly correlated with liquidity conditions, risk appetite, and VIX. VIX at 26.78 (elevated), BEAR regime at 100%, and Fed Funds at 3.64% (restrictive) create a hostile environment. Prior sessions show MSTR at -76.53% drawdown (3.8x the 20% threshold), indicating severe capital destruction. The theme is in capitulation and will remain under pressure until the Fed signals rate cuts and risk appetite returns. No near-term catalysts for recovery.

Explanation: Mild tailwind. In a BEAR regime with elevated VIX (26.78) and collapsing consumer sentiment (-21.3% YoY), defensive themes (consumer staples, gold, bonds) should outperform. However, prior sessions show defensive hedge is impaired with PG -19.93% and GLD -16.64%, both exceeding 5% thresholds by 3x+. This indicates even defensive positions are being sold in a capitulation environment. The theme provides relative protection but is not immune to the bear market. The tailwind is modest because the entire market is in distress.

Unemployment rising 40 bps YoY to 4.4% combined with consumer sentiment at 56.4 (-21.3% YoY) signals a hard landing scenario. If unemployment breaches 4.5% and sentiment falls below 50, recession probability exceeds 70% within 2 quarters.

VIX at 26.78 (elevated, above 20 threshold) with 99.8% BEAR regime self-persistence probability and zero momentum data across all 49 tickers creates a capitulation environment with zero trend confirmation. Risk management is operating blind; any conviction increases compound capital at risk.

Catastrophic drawdown breaches persist across 30+ of 49 tickers (61%+) with no healing observed across 6 consecutive sessions: SMR -78.59% (6.5x threshold), MSTR -76.53% (3.8x), RGTI -73.59% (2.9x), MARA -70.53% (3.5x), COIN -66.39% (3.3x). This is a portfolio-wide capitulation signal, not a temporary drawdown.

Yield curve at 0.51% spread is narrow and vulnerable to inversion if growth slows further. An inverted curve combined with rising unemployment would trigger a formal recession signal and likely accelerate equity market deterioration.

Defensive hedge is 100% impaired with all 5 tickers breaching the 5% max drawdown threshold (PG -19.93%, GLD -16.64%). The traditional risk-off hedge is not functioning, leaving the portfolio exposed to tail risk with no protection mechanism.

Summary: The macro environment is in a structural bear regime (100% confidence, 216-day persistence) characterized by rising unemployment (+40 bps YoY), collapsing consumer sentiment (-21.3% YoY), elevated VIX (26.78), and restrictive Fed policy (3.64% Fed Funds). While GDP growth remains strong at 5.42% YoY, forward-looking indicators (unemployment, sentiment, manufacturing employment) signal a hard landing within 2-3 quarters. This creates a stagflationary risk scenario where growth is decelerating while inflation remains sticky above target—the worst macro environment for risk assets. All 8 themes face headwinds, with growth themes (quantum, crypto, AI) experiencing severe distress (-0.65 to -0.81 impact scores) and rate-sensitive themes (real estate at -0.72) facing triple threats from unemployment, sentiment collapse, and elevated rates. Only defensive themes provide mild protection (+0.35), but even defensive positions are impaired in the current capitulation environment. The veto conditions from prior sessions remain unmet: zero momentum data across all tickers, 61%+ of portfolio in drawdown breach, and zero regime transition signals. Only conviction decreases (risk reduction) should proceed until macro stabilization is confirmed.

Musk's Terafab: Tesla/SpaceX announce massive chip factory, semiconductor equipment stocks surge

Broadcom flags TSMC capacity maxed out — AI chip supply constraints confirmed at production level

Energy risks to TSMC: Iran war / Strait of Hormuz disruption threatens East Asia fossil fuel flows and AI chip supply chain

BofA remains bullish on ASML after Asia checks; memory cycle strong through at least 1H27

Microsoft-backed Lace raises $40M for advanced chipmaking equipment tech targeting ASML alternatives

OpenAI warns investors of 'Microsoft dependency' hazard ahead of expected IPO

SoftBank tests borrowing limits with $30bn bet on OpenAI

JPMorgan offers clients new way to hedge AI debt risk

Trump delays Iran strikes for 5 days — Bitcoin spikes, oil/gold fall, defense stocks mixed

Northrop drops after Trump Iran pause post; L3Harris falls 2.1% while GD rises 0.5% — conflict premium bifurcation continues

Chevron CEO warns oil markets still haven't fully priced in Strait of Hormuz supply shock despite 60% oil price surge

Constellation Energy sells PJM generation portfolio to LS Power for $5B; JPMorgan cuts price target, stock -10.9%

Nuclear energy trend: SMR and BWX Technologies highlighted as major 2026 opportunity; no-brainer buy framing

India opens floodgates on weight-loss generics — 50+ generic Ozempic/Wegovy versions at $14/month

FDA clears higher-dose Wegovy (Novo Nordisk); LX9851 Phase 1 trial initiated — pipeline expanding

Novo Nordisk down 53% over 1 year, 28% YTD — valuation question intensifies amid generic competition

Beijing courts Eli Lilly with $3bn China commitment as weight-loss drug race intensifies

IBM alliances highlight quantum-centric supercomputing + AI upside; BofA reaffirms Buy at $340

Lam Research eyeing Besi Industries merger amid IBM pact for logic scaling

Bitcoin price spikes as Trump delays Iran strikes — geopolitical risk-off unwind benefits crypto

Baird raises Coinbase PT to $215 amid stablecoin activity and crypto sentiment improvement

Coinbase launches stock perpetual futures contracts for non-US users — product expansion

Vulcan Materials down 13.9% since last earnings; JPMorgan downgrades to Neutral — slowing construction demand

CRH involvement in 100+ US data center builds — quiet demand engine for construction materials

Johnson & Johnson advances bladder cancer treatment with 89% response rate; Cramer bullish as 'textbook slowdown stock'

FAA upgrades air traffic control — RTX, Leidos doing the work; Boeing 787 certification logjam breaks

Tesla/SpaceX Terafab announcement drives semiconductor equipment stocks (ASML) higher — new entrant signals demand so extreme incumbents can't meet it

Broadcom confirms TSMC capacity is maxed out — supply constraint narrative now validated at the product-marketing level, not just analyst speculation

Energy/Hormuz risk to TSMC supply chain — geopolitical tail risk now explicitly linked to AI chip production continuity

JPMorgan offering AI debt hedging products — institutional acknowledgment of AI capex bubble risk, but also confirms scale of AI investment cycle

OpenAI IPO document flags Microsoft dependency — structural risk disclosure but also confirms AI monetization is advancing toward public markets

BofA bullish on ASML post-Asia checks; memory cycle strong through 1H27 — demand durability confirmed

The TSMC capacity constraint narrative has crossed a threshold: it is no longer a forward risk but a present reality confirmed by Broadcom's product marketing team. Simultaneously, the Strait of Hormuz energy disruption is now explicitly linked to TSMC's Taiwan operations — creating a dual supply shock vector (fab capacity + energy supply) that the market has not yet fully priced as a single compound risk. The Terafab announcement, while speculative, signals that demand is so far ahead of supply that a company with zero chip manufacturing experience is entering the space. The narrative is shifting from 'AI demand is strong' to 'AI supply is the binding constraint' — a subtle but important distinction that favors upstream equipment (ASML) and diversified fab exposure over pure software/application plays.

Chevron CEO warns oil markets haven't fully priced Hormuz supply shock despite 60% oil price surge

Goldman Sachs raises oil price forecasts, picks 7 energy winners

Constellation Energy -10.9% on JPMorgan price target cut + $5B PJM asset sale — near-term headwind for nuclear power narrative

Nuclear SMR trend pieces continue — BWX Technologies highlighted as best SMR play

AI energy demand narrative persists: NVIDIA energy partnerships noted in multiple articles

Energy grid narrative is bifurcated: fossil fuel/oil names benefit from Hormuz shock while nuclear/clean power names face near-term pressure (CEG asset sale, JPMorgan cut). The AI power demand thesis remains intact but is being temporarily overshadowed by geopolitical oil dynamics. No new narrative shift — this is continuation of existing tension between near-term oil shock and long-term clean power buildout. Note: SMR remains in catastrophic drawdown (-78.59%) per prior sessions; positive narrative does NOT override structural risk.

Trump delays Iran strikes 5 days — conflict premium fading, defense stocks mixed (NOC down, GD up 0.5%, LHX down 2.1%)

Bifurcation confirmed: geopolitical fear plays (NOC, RTX) underperforming while structural/AI-defense names hold

FAA ATC upgrade contract — RTX and Leidos doing the work, steady structural revenue

L3Harris AI-driven electronic warfare milestone with Shield AI — structural AI-defense thesis advancing

Boeing 787 certification logjam breaking — aerospace supply chain normalization signal

The defense bifurcation narrative flagged in prior sessions (cs_20260324_000802 and cs_20260324_011217) is now in its third consecutive session of confirmation. The conflict-premium trade is clearly fading as Iran diplomatic progress advances. The structural AI-defense narrative (PLTR, LHX AI-EW) continues to strengthen. This is NOT a new shift — it is a maturing, confirmed rotation. The market is pricing it. Alpha from this signal is diminishing as it becomes consensus. Monitor for PLTR-specific catalysts as the Maven Program of Record thesis plays out.

India opens floodgates: 50+ generic Ozempic/Wegovy versions at $14/month — existential pricing pressure on GLP-1 incumbents

FDA approves higher-dose Wegovy — positive pipeline catalyst for NVO but stock still -53% over 1 year

NVO LX9851 Phase 1 trial initiated — pipeline diversification beyond GLP-1 incretin class

Beijing courts Eli Lilly with $3bn China commitment — LLY geographic expansion positive

Hims & Hers -8.86% on profit-taking after 88% monthly surge — compounding pharmacy narrative volatile

The India generic GLP-1 development is a material narrative escalation. While compounding pharmacy competition was already known, the scale (50+ generics at $14/month vs. ~$1,000+/month branded) represents a structural pricing threat that could permanently compress the GLP-1 TAM narrative for NVO and LLY. The market has been treating GLP-1 competition as a manageable headwind; $14/month generics from Indian pharma reframes this as a potential commodity-ization of the obesity drug market. This is the first signal that the 'GLP-1 moat' narrative — which has driven NVO and LLY to massive valuations — may be structurally challenged rather than cyclically pressured. NVO's -53% 1-year decline may be partially anticipating this, but LLY has not yet repriced to the same degree. Watch for LLY to face similar narrative pressure.

IBM outlines quantum-centric supercomputing architecture combining classical, quantum, and communication technologies

IBM deepens AI infrastructure collaboration with NVIDIA and expands post-quantum cryptography services with Bain

BofA reaffirms Buy on IBM at $340 following CEO discussion on agentic AI expansion

Lam Research eyeing Besi Industries merger — semiconductor consolidation supporting quantum hardware supply chain

IBM continues to execute on a multi-vector quantum+AI strategy, providing the most credible near-term quantum narrative in the theme. However, pure-play quantum names (IONQ, RGTI) remain in catastrophic drawdown per prior sessions with no recovery signal. IBM's narrative strength does not translate to pure-play recovery. Quantum theme narrative is modestly positive on IBM's institutional momentum but structurally impaired by pure-play capitulation.

Bitcoin spikes on Trump Iran delay — crypto acting as geopolitical risk-off hedge, not just speculative asset

Baird raises Coinbase PT to $215 on stablecoin activity and improved crypto sentiment

Coinbase launches stock perpetual futures — product expansion into traditional finance territory

Pudgy World lands on Amazon Marketplace — crypto/NFT consumer adoption signal

Crypto is benefiting from the Iran geopolitical relief trade — Bitcoin's positive reaction to the Iran pause (while gold fell) reinforces the 'digital gold' narrative in geopolitical uncertainty contexts. Coinbase product expansion into stock futures is a structural positive. However, COIN, MSTR, and MARA remain in catastrophic drawdown per prior sessions. Positive narrative does not override structural risk conditions.

Vulcan Materials -13.9% since last earnings; JPMorgan downgrades to Neutral from Overweight — slowing construction aggregate demand

Zacks 'Bear of the Day' designation for VMC — consensus bearish signal on construction materials

CRH data center buildout exposure — 100+ US data center builds providing quiet demand offset to residential/infrastructure weakness

Real estate/construction narrative remains under pressure from slowing aggregate demand and rate sensitivity. VMC weakness is the dominant signal. CRH's data center exposure is a positive offset but insufficient to change the overall theme narrative. No new shift — continuation of existing bearish construction materials trend.

Johnson & Johnson advances bladder cancer treatment with 89% response rate — pipeline positive

Jim Cramer calls JNJ 'textbook slowdown stock' — institutional validation of defensive rotation thesis

Safe dividend stock coverage increasing — market seeking yield and stability amid BEAR regime

Protagonist Therapeutics FDA approval of ICOTYDE triggers $50M milestone payment to JNJ partnership

Defensive theme narrative modestly improving as JNJ pipeline advances and slowdown-stock framing gains traction. However, per prior sessions, PG and GLD remain in significant drawdown, impairing the defensive hedge function. Narrative improvement is real but structural impairment persists.

COMPOUND SUPPLY SHOCK — ai_compute × energy_grid: The Strait of Hormuz disruption is now simultaneously (1) threatening TSMC's energy supply in Taiwan, (2) driving oil prices that increase data center operating costs, and (3) creating a geopolitical risk premium on the entire AI chip supply chain. This cross-theme linkage is the most underpriced risk in the portfolio — it connects energy_grid geopolitical risk directly to ai_compute supply continuity.

DEMAND CONFIRMATION LOOP — ai_compute × real_estate: Tesla Terafab + Broadcom capacity warnings + CRH's 100+ data center builds collectively confirm that AI infrastructure buildout is generating real construction/materials demand. CRH is the quiet beneficiary of AI capex that VMC is missing. This divergence within real_estate (data center materials vs. residential/infrastructure aggregates) is a rotation signal.

GEOPOLITICAL RELIEF TRADE — defense_aerospace × crypto_digital × energy_grid: Trump's Iran pause simultaneously (1) fades the conflict premium in defense names, (2) spikes Bitcoin as risk-off unwinds, and (3) temporarily relieves oil price pressure. These three themes are moving in correlated but opposite directions on the same geopolitical catalyst — a classic cross-theme divergence that creates short-term trading opportunities.

AI-DEFENSE CONVERGENCE — ai_compute × defense_aerospace: L3Harris AI-driven electronic warfare milestone + PLTR Maven Program of Record (prior session) + IBM quantum-centric computing for defense applications = the AI-defense convergence narrative is strengthening across multiple sessions. This is a durable cross-theme tailwind that benefits both themes simultaneously.

GLP-1 COMMODITY RISK — biotech_health × defensive: India's $14/month generic GLP-1 threat to NVO/LLY could accelerate rotation from growth biotech into defensive healthcare (JNJ, ABBV) as investors de-risk the obesity drug premium. If the GLP-1 moat narrative cracks, defensive healthcare becomes the relative safe haven within the healthcare complex.

AI DEBT RISK INSTITUTIONALIZATION — ai_compute × defensive: JPMorgan offering AI debt hedging products signals that institutional risk managers are now treating AI capex debt as a systemic risk category. This is a late-cycle signal — when banks create hedging products for a risk, it means the risk is large enough to be systemic. Defensive positioning becomes more attractive as AI debt risk is formally recognized.

Summary:
Session 7 narrative digest in a persistent BEAR regime. Two narrative shifts detected this session:

**SHIFT 1 — AI Compute Supply Constraint Compound Risk (ai_compute):** The TSMC capacity ceiling is no longer theoretical — Broadcom's product marketing team has confirmed it in real-time. Simultaneously, the Strait of Hormuz energy disruption is now explicitly linked to TSMC's Taiwan operations, creating a dual supply shock vector (fab capacity + energy supply) that the market has not yet priced as a single compound risk. The Terafab announcement, while speculative and years from production, is the most powerful demand signal: when a company with zero chip manufacturing experience enters the space, it confirms demand is structurally outpacing supply. The narrative is shifting from 'AI demand is strong' to 'AI supply is the binding constraint' — this favors upstream equipment plays (ASML) over application-layer software. ASML's -7% dip on a BofA Buy rating with 25% upside target is the specific entry signal the market may be underweighting.

**SHIFT 2 — GLP-1 Commodity Risk (biotech_health):** India's release of 50+ generic Ozempic/Wegovy versions at $14/month is a structural escalation, not a cyclical headwind. The market has been treating GLP-1 competition as manageable; $14/month generics reframe the obesity drug market as potentially commoditizing. NVO's -53% 1-year decline may partially anticipate this, but LLY has not repriced to the same degree — creating a potential divergence trade. The FDA's approval of higher-dose Wegovy and LX9851 Phase 1 trial are positive pipeline signals, but they cannot offset the pricing floor destruction implied by $14/month generics at scale.

**Continuity from prior sessions:** The defense bifurcation narrative (conflict-premium fading, AI-defense structural thesis strengthening) is now in its third consecutive session of confirmation — it is becoming consensus and alpha is diminishing. The Iran diplomatic progress is accelerating this rotation. The PLTR/AI-defense structural thesis from cs_20260324_011217 is playing out as predicted.

**Critical cross-theme risk:** The Hormuz-TSMC-AI supply chain linkage is the most underpriced compound risk in the portfolio. Energy grid geopolitical disruption is no longer just an energy_grid theme issue — it is an ai_compute supply continuity issue. This cross-theme connection has not yet appeared in mainstream analyst coverage.

**Regime context:** All narrative signals are assessed against a persistent BEAR regime with catastrophic drawdowns across 30+ tickers. Positive narrative scores reflect improving story momentum, NOT buy signals. Risk management constraints from prior sessions remain fully operative.

Two narrative shifts converge on a single structural thesis: TSMC capacity is now confirmed as a present-reality constraint (Broadcom product marketing validation), and the Strait of Hormuz energy disruption creates a dual supply shock vector (fab capacity + energy supply) that the market has NOT yet priced as a compound risk. The Terafab announcement — a company with zero chip manufacturing experience entering the space — is the most powerful demand signal possible: it confirms demand is structurally outpacing supply. This narrative shift from 'AI demand is strong' to 'AI supply is the binding constraint' is the AI EDGE signal this session. Upstream equipment plays (ASML) are the specific beneficiary — ASML's -7% dip on a BofA Buy with 25% upside target is a mispricing. Quant confirms: ASML 6m momentum +99.84%, 3m +41.4%, relative strength vs SPY +33.4%, Sharpe 1.626, max drawdown only -18.2% (below the 25% threshold). TSM also strong: 6m +63%, 3m +31.22%, Sharpe 1.72. Theme avg 6m momentum +20.42%, 3m +4.83%. GOOG Sharpe 1.879. The narrative shift is the 40% weight signal; quant confirms with ASML/TSM as the clean expression. Prior veto was on ai_compute +1 in cs_20260324_000802 — but that session lacked a narrative shift. This session has a confirmed shift. Conditions have changed materially.

BEAR regime at 100% confidence with 216-day persistence. Macro impact score -0.65 — strong headwind. Consumer sentiment -21.3% YoY signals demand destruction. SMCI at -66.18% drawdown (4.4x threshold) and MSFT at -29.55% are significant impairments within the theme. AMD -31.88% drawdown. Theme avg relative strength vs SPY is essentially flat at -0.02 — the theme is not outperforming the market on average. VIX at 26.78 compresses growth valuations. The compound supply shock narrative could also be read as a RISK signal — if Hormuz disrupts TSMC energy supply, AI chip production halts, which is bearish for the entire AI ecosystem. Prior session vetoes on ai_compute +1 were correct given conditions at the time; the Risk Sentinel may veto again given persistent macro headwinds.

CRH's exposure to 100+ US data center builds is a genuine demand offset — AI capex is generating real construction materials demand that VMC is missing. TOL shows strong momentum: 6m +23.12%, 3m +28.22%, Sharpe 0.682. O (Realty Income) and SPG show positive relative strength vs SPY (+11.73% and +1.84% respectively). Theme 3m momentum is actually positive at +11.99%, suggesting some near-term stabilization. Housing starts at 1,487k (+9.5% YoY) remain resilient. The data center construction angle (CRH) is a structural positive that the market may be underweighting.

Macro impact score -0.72 — the worst-hit theme in the current environment. Triple threat: rising unemployment (+40 bps YoY), collapsing consumer sentiment (-21.3% YoY), elevated rates (3.64% Fed Funds). VMC -13.9% since last earnings, JPMorgan downgrade to Neutral, Zacks 'Bear of the Day' — consensus bearish signal on construction aggregates. Narrative score -0.20 with no shift detected. RKT at -41.77% drawdown, LEN at -36.41%, DHI at -27.67%. Theme avg relative strength vs SPY at -2.08. AMT Sharpe -0.836, LEN Sharpe -0.569, SHW Sharpe -0.424. The data center offset (CRH) is insufficient to change the overall theme trajectory. Rate sensitivity remains the dominant headwind with no Fed pivot signal.

Goldman Sachs raises oil price forecasts and picks 7 energy winners — institutional validation of the oil/energy trade. GEV is the standout: 6m +37.02%, 3m +39.47%, Sharpe 2.022, relative strength vs SPY +37.79% — the strongest single-name quant signal in the theme. UEC: 6m +68.92%, 3m +35.64%, Sharpe 1.388. NEE: 6m +21.16%, 3m +9.39%, Sharpe 0.918, relative strength +17.14%. Nuclear SMR narrative continues with BWX Technologies highlighted. AI power demand thesis remains structurally intact. The Hormuz disruption creates a near-term oil price tailwind for energy names. Theme 6m avg momentum +14.59%.

Macro impact score -0.58. No narrative shift detected — this is continuation of existing bifurcated tension. SMR remains at -78.59% drawdown (6.5x the 12% threshold) — the worst single-name position in the entire portfolio, flagged as CRITICAL across 6 consecutive sessions with ZERO recovery. CEG -10.9% on JPMorgan cut + $5B PJM asset sale. FSLR relative strength vs SPY -25.16%. CEG relative strength -14.77%. SMR relative strength -23.49%. Theme avg relative strength vs SPY -0.64. Theme volatility avg 62.35% — the highest of any theme. SMR daily VaR -9.9%. Prior sessions show energy_grid conviction was pushed to 8 (incorrectly) and has been correctly reduced to 6 across three consecutive vetoes. The Risk Sentinel has been right on this theme. Holding at 6 is the appropriate call — no new shift justifies an increase, and SMR's catastrophic drawdown prevents a clean increase.

This is the strongest quant profile in the entire portfolio. Theme avg 6m momentum +21.01%, 3m +15.85%. ALL six names show positive 6m momentum. Relative strength vs SPY: LMT +33.68%, NOC +23.33%, LHX +23.89%, RTX +10.74%, GD +6.06% — theme avg +14.10%, the only theme with a strongly positive relative strength average. ALL six Sharpe ratios are positive and above 1.0: LHX 1.936, RTX 1.294, LMT 1.267, GD 1.122, PLTR 1.092, NOC 1.076. Max drawdowns are the most controlled in the portfolio: LHX -11.23%, GD -10.27%, LMT -15.56%, NOC -15.56%, RTX -16.15% — all within or near acceptable thresholds. Macro impact score -0.15 — the most resilient theme in the bear regime. The AI-defense convergence narrative (PLTR Maven Program of Record + L3Harris AI-EW milestone + IBM quantum-defense) is now in its third consecutive session of confirmation — it is a durable structural thesis, not a one-session signal. FAA ATC upgrade (RTX, Leidos) provides steady structural revenue. The Iran pause fades the conflict premium but does NOT impair the structural AI-defense thesis. Prior veto of defense_aerospace +1 in cs_20260324_011217 was based on identical structural risk conditions — but the quant profile here is the cleanest in the portfolio and the AI-defense narrative has continued to strengthen. This is the one theme where a conviction increase is most defensible.

BEAR regime at 100% confidence creates valuation compression across all equities. PLTR at -37.81% drawdown is a significant impairment within the theme — the highest-conviction AI-defense name is also the most distressed. PLTR daily VaR -5.69%. The conflict premium fading (NOC down, LHX -2.1% on Iran pause) creates near-term headwinds for the geopolitical fear plays. Narrative score only +0.20 — no new shift detected this session. The AI-defense bifurcation narrative is becoming consensus (third session), meaning alpha is diminishing. Prior veto was specifically on this theme — the Risk Sentinel has blocked defense_aerospace +1 twice. However, the quant conditions are materially stronger than prior sessions, and the structural thesis has only strengthened.

IBM's quantum-centric supercomputing architecture combining classical, quantum, and communication technologies is the most credible near-term quantum narrative. BofA reaffirms Buy on IBM at $340. GOOG Sharpe 1.879, 6m momentum +56.96%. IBM and GOOG provide institutional-grade exposure to quantum without pure-play risk. Lam Research/Besi merger supports quantum hardware supply chain. The IBM narrative is genuinely positive and multi-session consistent.

Macro impact score -0.78 — severe headwind. No narrative shift detected. Theme 3m momentum -18.56% — the worst 3m momentum of any theme. Theme relative strength vs SPY -17.65% — the worst relative strength of any theme. IONQ -62.93% drawdown (2.5x threshold), RGTI -73.59% drawdown (2.9x threshold) — both in sustained capitulation with ZERO recovery across 6 consecutive sessions. IONQ daily VaR -8.18%, RGTI daily VaR -8.78%. Theme volatility avg 67.48%. HHI concentration 0.3061 — high concentration risk. IBM Sharpe only 0.022 — barely positive. Prior session veto of quantum +1 in cs_20260324_011217 was correct. IBM's positive narrative does NOT translate to pure-play recovery. The theme is in structural capitulation. Conviction should decrease to reflect the sustained drawdown reality.

FDA approves higher-dose Wegovy — positive pipeline catalyst. NVO LX9851 Phase 1 trial initiated — pipeline diversification. Beijing courts Eli Lilly with $3bn China commitment — geographic expansion. CRSP 3m momentum +5.38%, Sharpe 0.387. LLY 6m momentum +42.22%. JNJ pipeline advancing (89% bladder cancer response rate). The GLP-1 revolution structural thesis remains intact — aging population, obesity epidemic, CRISPR breakthroughs are multi-decade tailwinds. ABBV max drawdown -18.79% and ISRG -24.09% are within manageable ranges.

NARRATIVE SHIFT DETECTED — India's 50+ generic GLP-1 versions at $14/month is a structural escalation that reframes the GLP-1 moat narrative as potentially commoditizing. This is the 40% weight signal working AGAINST the theme. NVO at -54.93% drawdown (4.6x threshold), -53% over 1 year. Theme avg relative strength vs SPY -12.43% — significantly underperforming. Theme 3m momentum -3.17% — negative. NVO Sharpe -1.14, ISRG Sharpe -0.165, ABBV Sharpe -0.12. Macro impact score -0.52. LLY has NOT yet repriced to the same degree as NVO — creating downside risk as the generic narrative spreads. Prior session veto of biotech_health +1 in cs_20260324_000802 was correct. The narrative shift this session is NEGATIVE, which combined with weak quant signals justifies a conviction decrease.

Bitcoin's positive reaction to the Iran pause (while gold fell) reinforces the 'digital gold' narrative in geopolitical uncertainty contexts — a genuine narrative positive. Baird raises Coinbase PT to $215 on stablecoin activity. Coinbase launches stock perpetual futures — product expansion into traditional finance. Pudgy World on Amazon Marketplace — consumer adoption signal. Narrative score +0.25 — the most positive narrative score among the distressed themes. The geopolitical relief trade is a real near-term catalyst.

Macro impact score -0.81 — the most severe headwind of any theme. No narrative shift detected. Theme 6m momentum -45.23%, 3m -26.37% — catastrophic momentum, the worst of any theme. Theme relative strength vs SPY -9.58%. COIN -66.39% drawdown (3.3x threshold), MSTR -76.53% (3.8x threshold), MARA -70.53% (3.5x threshold) — all in sustained capitulation across 6 consecutive sessions with ZERO recovery. MSTR Sharpe -0.896, MARA Sharpe -0.265. MARA daily VaR -8.31%, MSTR -7.61%, COIN -6.48%. HHI concentration 0.3061. The Bitcoin geopolitical spike is a one-day event, not a structural reversal. Positive narrative does NOT override catastrophic structural risk. Holding at 3 (not decreasing further) because the geopolitical narrative provides a floor, but no increase is warranted.

The strongest quant case for increasing defensive conviction: theme avg relative strength vs SPY +7.88% — the second-best relative strength of any theme after defense_aerospace. JNJ: 6m +35.52%, 3m +19.74%, Sharpe 1.760, relative strength vs SPY +17.78%, max drawdown -11.75% (well within threshold). GLD: 6m +52.5%, 3m +24.98%, Sharpe 1.355, relative strength +4.96%. KO: 6m +12.99%, 3m +12.28%, Sharpe 0.298, relative strength +10.91%. Theme avg 6m momentum +21.15%, 3m +13.40% — genuinely positive momentum. Theme volatility avg 18.78% — the lowest of any theme. TLT daily VaR only -1.20%, JNJ -1.50%, KO -1.57%. In a BEAR regime at 100% confidence, the macro tailwind score of +0.35 is the ONLY positive macro score in the portfolio. Jim Cramer's 'textbook slowdown stock' framing for JNJ is institutional validation of the defensive rotation thesis. The GLP-1 commodity risk narrative (biotech_health shift) accelerates rotation from growth biotech into defensive healthcare (JNJ, ABBV). JPMorgan's AI debt hedging product launch signals systemic risk recognition — defensive positioning becomes more attractive. Prior session veto of defensive +1 in cs_20260323_160058 was based on PG and GLD impairment — but GLD has 6m momentum +52.5% and Sharpe 1.355, suggesting it has recovered meaningfully. JNJ is the clean expression with the best Sharpe in the theme.

Prior session veto of defensive +1 was correct at the time — PG at -19.93% drawdown (3.97x the 5% threshold) and GLD at -18.52% remain impaired. TLT Sharpe -0.710, PG Sharpe -0.903 — two of five names have negative Sharpe ratios. The defensive hedge function is described as '100% impaired' in prior sessions. Narrative score only +0.15 — no shift detected. The macro tailwind (+0.35) is modest. In a capitulation environment, even defensive positions are being sold. The Risk Sentinel may correctly note that PG and GLD drawdowns have not healed to threshold levels.

Defense & Aerospace (defense_aerospace) — the only theme with universally positive quant signals in a BEAR regime: theme avg relative strength vs SPY +14.10%, all six Sharpe ratios above 1.0 (LHX 1.936, RTX 1.294, LMT 1.267), controlled max drawdowns (LHX -11.23%, GD -10.27%), and a structurally confirmed AI-defense convergence narrative now in its third consecutive session. The Maven Program of Record (PLTR) + L3Harris AI-EW milestone + FAA ATC upgrade (RTX) create a durable multi-year revenue thesis that is macro-insensitive and geopolitically independent. Within this theme, the specific expression is LHX (best Sharpe at 1.936, lowest drawdown at -11.23%, AI-EW structural catalyst) as the primary vehicle, with LMT and RTX as structural anchors. The AI-defense convergence is the most durable cross-theme tailwind in the portfolio.

The Hormuz-TSMC-AI compound supply shock is the most underpriced systemic risk in the portfolio — and it is simultaneously the biggest risk AND the biggest opportunity mispricing. If the Strait of Hormuz disruption escalates, it simultaneously (1) halts TSMC's energy supply in Taiwan, (2) drives oil prices that increase data center operating costs, (3) creates a geopolitical risk premium on the entire AI chip supply chain, and (4) reverses the Iran diplomatic progress that is currently fading the defense conflict premium. This cross-theme linkage (energy_grid × ai_compute × defense_aerospace) has not yet appeared in mainstream analyst coverage and represents a tail risk that could cascade across three of the portfolio's highest-conviction themes simultaneously. The secondary systemic risk remains the portfolio-wide capitulation: 30+ of 49 tickers (61%+) in drawdown breach across 6 consecutive sessions with ZERO healing, SMR at -78.59% (6.5x threshold) as the most acute single-name risk, and the defensive hedge remaining structurally impaired (PG -19.93%, GLD -18.52%).

Summary:
Session 7 Thesis Analysis — BEAR regime, 7th consecutive session. Two narrative shifts detected this session materially change the conviction calculus for two themes.

**SHIFT 1 — AI Compute Supply Constraint (ai_compute, BULLISH):** The TSMC capacity ceiling is confirmed as present reality by Broadcom's product marketing team, simultaneously linked to Hormuz energy disruption as a dual supply shock vector. The Terafab announcement is the strongest possible demand signal. Narrative shifts from 'AI demand strong' to 'AI supply is the binding constraint' — favoring upstream equipment (ASML: 6m +99.84%, Sharpe 1.626, drawdown -18.2%). This is a changed condition from the prior veto of ai_compute +1 in cs_20260324_000802, which lacked a narrative shift. Proposing +1 delta to conviction 5.

**SHIFT 2 — GLP-1 Commodity Risk (biotech_health, BEARISH):** India's 50+ generic GLP-1 versions at $14/month reframes the obesity drug market as potentially commoditizing. Combined with negative quant signals (3m momentum -3.17%, relative strength -12.43%, NVO Sharpe -1.14), this justifies a -1 delta to conviction 3.

**Continuity signals:** Defense_aerospace quant profile remains the strongest in the portfolio (all Sharpe >1.0, relative strength avg +14.10%, controlled drawdowns) with the AI-defense structural thesis confirmed for a third consecutive session. Proposing +1 delta to conviction 8 — this is the most defensible conviction increase in the portfolio. Quantum -1 delta to conviction 2 reflects sustained capitulation (3m momentum -18.56%, relative strength -17.65%, IONQ/RGTI in catastrophic drawdown). Real estate -1 delta to conviction 3 reflects the triple macro threat with no narrative offset. Defensive +1 delta to conviction 5 reflects the only positive macro score (+0.35), strong JNJ/GLD quant signals, and the GLP-1 rotation accelerating into defensive healthcare. Energy_grid and crypto_digital held at current conviction — no new shifts, and prior veto conditions on energy_grid remain partially operative (SMR -78.59%).

**Risk acknowledgment:** All proposed increases are subject to Risk Sentinel review. The prior session pattern of vetoing conviction increases remains the dominant constraint. The defense_aerospace and ai_compute increases are the most defensible given changed narrative conditions; the defensive increase is the most likely to be contested given prior PG/GLD impairment flags.

Theme avg volatility 44.25% is extreme for a moderate-aggressive allocation; SMCI at 79.19% vol is uninvestable

SMCI daily VaR of -7.54% and AMD at -5.37% both exceed the 3% VaR threshold significantly

3-month momentum has collapsed to +4.83% from +20.42% 6-month, indicating rapid deceleration; MSFT -18.45% and AMD -10.47% on 3m show deterioration

Macro impact score of -0.65 with BEAR regime at 100% confidence creates structural headwind for growth multiples

Positive signal: some names showing resilience — TSM 3m +31.22%, ASML +41.4%, GOOG +7.48% — but this is bifurcation, not broad strength

Macro impact score of -0.72 is the worst of all themes — triple threat from rising unemployment (+40bps YoY), collapsing consumer sentiment (-21.3% YoY), and elevated rates (3.64% Fed Funds)

RKT daily VaR of -5.36% is extreme for a rate-sensitive mortgage play; LEN at -3.84% also exceeds 3% threshold

RKT volatility at 60.88% is wildly inconsistent with a 'moderate' risk tolerance theme

3-month momentum of +11.99% is the one positive signal, but this is likely a dead-cat bounce in a structurally hostile rate environment

Theme relative strength vs SPY is -2.08%, underperforming the broad market which is itself in a bear regime

SMR at -78.59% drawdown is 6.5x the 12% max_drawdown threshold — the WORST single-name drawdown in the entire portfolio, persisting across 7 consecutive sessions with ZERO healing

SMR daily VaR of -9.9% means this position can lose another 10% in a single day; this is the highest VaR in the portfolio

SMR volatility at 105.66% is uninvestable — this is penny-stock-level risk in a 'moderate' risk tolerance theme

Theme avg volatility of 62.35% is the second highest across all themes, incompatible with moderate risk tolerance

Conviction was reduced from 8→7→6 over prior sessions but remains too high given SMR's catastrophic position; further reduction warranted

UEC daily VaR of -7.05% and FSLR at -5.45% both far exceed the 3% threshold

PLTR at -37.81% drawdown is 3.8x the 10% max_drawdown threshold; daily VaR of -5.69% is extreme and exceeds 3% threshold by nearly 2x

PLTR volatility at 57.44% is nearly double the theme average of 31.24%, creating single-name concentration risk despite HHI of 0.18

PLTR 3-month momentum of -18.24% is sharply negative while the rest of the theme is strongly positive (LMT +40.08%, NOC +28.06%, LHX +24.85%), indicating severe bifurcation

Theme-level metrics are the strongest in the portfolio: avg relative strength +14.10% vs SPY, all non-PLTR Sharpe ratios >1.0, 3m momentum +15.85%

Macro impact score of -0.15 is the most resilient; structural rearmament thesis confirmed by Maven POR narrative shift

Current conviction of 7 is appropriate given the data — this is the only theme with genuine positive momentum in a BEAR regime

RGTI at -73.59% drawdown is 2.9x the 25% max_drawdown threshold — 7th consecutive session at this level with ZERO recovery

IONQ at -62.93% drawdown is 2.5x the 25% threshold; daily VaR of -8.18% is among the highest in the portfolio

RGTI daily VaR of -8.78% — this position can lose nearly 9% in a single day

Theme avg volatility of 67.48% is the second highest; IONQ at 96.35% and RGTI at 109.84% are uninvestable

Concentration HHI of 0.3061 exceeds the 0.25 threshold — concentrated in catastrophically impaired names

3-month momentum of -18.56% is the worst of any theme, confirming sustained capitulation with no reversal signal

Macro impact score of -0.78 — pure-play speculative growth in a locked BEAR regime with zero near-term cash flows

Theme relative strength vs SPY of -17.65% is the worst across all themes

NVO at -54.93% drawdown is 4.6x the 12% max_drawdown threshold — this is the 4th worst single-name drawdown in the portfolio

CRSP at -40.24% is 3.4x the threshold; LLY at -30.40% is 2.5x

4 of 5 tickers breach the 12% threshold: NVO -54.93%, CRSP -40.24%, LLY -30.40%, ISRG -24.09%

CRSP daily VaR of -6.17% and NVO at -4.70% both far exceed the 3% threshold

3-month momentum has turned negative at -3.17%, with NVO -3.22%, LLY -3.82%, ISRG -10.73%

Theme relative strength vs SPY of -12.43% indicates significant underperformance even in a bear market

Concentration HHI of 0.2231 is approaching the 0.25 threshold

Only 1 of 5 tickers (CRSP at 0.387) has a positive Sharpe ratio — the theme is destroying risk-adjusted capital

MSTR at -76.53% drawdown is 3.8x the 20% max_drawdown threshold — 7th consecutive session at this level, ZERO healing

MARA at -70.53% is 3.5x threshold; COIN at -66.39% is 3.3x; XYZ at -39.48% is 2.0x — ALL 4 tickers in catastrophic breach

Theme avg 6-month momentum of -45.23% and 3-month of -26.37% — the worst momentum of ANY theme by a massive margin

Theme avg volatility of 71.34% is the HIGHEST across all themes

MARA daily VaR of -8.31%, MSTR at -7.61%, COIN at -6.48% — three positions with >6% daily loss potential

Concentration HHI of 0.3061 exceeds the 0.25 threshold — concentrated in names that have already lost 66-77% of value

Macro impact score of -0.81 is the worst of all themes; restrictive Fed policy and elevated VIX are structural headwinds

Theme relative strength vs SPY of -9.58% confirms persistent underperformance; no recovery catalyst visible

Conviction already at 3 (minimum) but the theme should be exited entirely given 100% of positions in catastrophic drawdown

The defensive hedge is 100% IMPAIRED — this is the 7th consecutive session where the hedge provides no protection

PG Sharpe of -0.903 and TLT Sharpe of -0.71 indicate these 'safe havens' are actively destroying capital

However, 3-month momentum of +13.40% and relative strength vs SPY of +7.88% are the BEST of any theme — defensive is finally starting to work directionally

GLD 6m momentum of +52.50% and JNJ 6m of +35.52% show gold and healthcare staples are outperforming

Theme avg volatility of 18.78% is the lowest across all themes — appropriate for conservative risk tolerance

Despite drawdown breaches from prior peaks, the theme is now the strongest momentum play in the portfolio — conviction should be INCREASED, not decreased

No inter-theme correlation pairs exceed the 0.7 risk threshold. Highest correlation is ai_compute <> crypto_digital at 0.391 and ai_compute <> quantum at 0.35 — both LOW. Portfolio diversification across themes is adequate.

INTRA-theme concentration is the real risk: quantum HHI 0.3061 and crypto_digital HHI 0.3061 both exceed the 0.25 threshold, meaning losses are concentrated in a small number of catastrophically impaired names within those themes.

Regime-driven correlation risk: In a BEAR regime at 100% confidence, cross-asset correlations tend to spike during sell-offs. The current low inter-theme correlations measured over 6 months may understate tail-risk correlation during acute stress events. All growth themes (AI, quantum, crypto, energy) could correlate toward 1.0 in a liquidation event.

CATASTROPHIC — SMR (energy_grid): -78.59% drawdown, 6.5x the 12% threshold. WORST position in portfolio. 7 consecutive sessions with ZERO recovery. Daily VaR of -9.9% means further 10% loss possible in a single day. This position is a capital destruction event, not a drawdown.

CATASTROPHIC — MSTR (crypto_digital): -76.53% drawdown, 3.8x the 20% threshold. 7 sessions at this level. No recovery catalyst in a restrictive Fed environment.

CATASTROPHIC — RGTI (quantum): -73.59% drawdown, 2.9x the 25% threshold. Pure-play quantum with 109.84% annualized volatility. Position is uninvestable.

CATASTROPHIC — MARA (crypto_digital): -70.53% drawdown, 3.5x the 20% threshold. Bitcoin miner in a risk-off environment with -8.31% daily VaR.

SEVERE — COIN (crypto_digital): -66.39% drawdown, 3.3x threshold. SMCI (ai_compute): -66.18%, 4.4x threshold. IONQ (quantum): -62.93%, 2.5x threshold.

SEVERE — NVO (biotech_health): -54.93% drawdown, 4.6x the 12% threshold. Worst biotech position. GLP-1 narrative has not prevented capital destruction.

PORTFOLIO-WIDE: 30+ of 49 tickers (61%+) remain in breach of their respective theme max_drawdown thresholds for the 7th consecutive session. This is a sustained capitulation signal with ZERO healing observed across any prior session.

DEFENSIVE HEDGE IMPAIRED: All 5 defensive tickers breach the 5% threshold (PG -19.93%, GLD -18.52%, JNJ -11.75%, KO -11.14%, TLT -9.56%). However, 3-month momentum is now positive at +13.40% — the hedge may be beginning to recover directionally even though drawdowns from peak remain breached.

Summary: SEVENTH CONSECUTIVE VETO — structural risk conditions remain unchanged with marginal improvements only in defensive momentum and the emergence of real momentum data (no longer null). Key changes since last session: (1) Momentum data is now AVAILABLE across all tickers — this is a meaningful improvement from 6 sessions of null data, restoring some trend visibility; (2) Defensive theme shows strongest momentum in portfolio (+13.40% 3m, +7.88% RS vs SPY) — the hedge is beginning to function directionally; (3) Defense_aerospace shows genuine strength with +15.85% 3m momentum and +14.10% RS vs SPY — the only growth theme with broad positive momentum. HOWEVER, the core veto triggers remain: BEAR regime at 100% confidence with 98% self-persistence probability; 30+ of 49 tickers (61%+) in drawdown breach for 7th consecutive session with zero healing; SMR -78.59%, MSTR -76.53%, RGTI -73.59% all unchanged; VIX at 26.78 remains elevated; consumer sentiment at 56.4 and unemployment at 4.4% show no stabilization; 15+ tickers with daily VaR >5%. The portfolio is carrying catastrophic unrealized losses across quantum (exit), crypto (exit), and energy_grid (reduce) while the defensive hedge remains impaired from peak despite improving trajectory. Recommended actions: EXIT quantum and crypto_digital entirely; REDUCE energy_grid (especially SMR), ai_compute, real_estate, and biotech_health; HOLD defense_aerospace (strongest risk-adjusted theme); INCREASE defensive to conviction 7 floor. Only conviction decreases should proceed for risk themes until BEAR regime shows transition probability >5% and drawdown healing is confirmed across at least 2 consecutive sessions.

Summary: VETOED: Seventh consecutive session triggering veto — core structural risk conditions persist with insufficient improvement to justify lifting the block on conviction increases. BEAR regime remains locked at 100% confidence with 98% self-persistence probability and only 0.9% probability of bull transition. Portfolio-wide capitulation signal: 30+ of 49 tickers (61%+) in max_drawdown breach for the 7th consecutive session with ZERO healing in the worst positions (SMR -78.59%, MSTR -76.53%, RGTI -73.59%, MARA -70.53%). Three themes (quantum, crypto_digital, energy_grid) carry positions with daily VaR of 7-10%, meaning any single day could deepen already catastrophic losses by another 10%. Defensive hedge remains impaired from peak (all 5 tickers breaching 5% threshold) though directional momentum is improving. KEY IMPROVEMENT NOTED: Momentum data has returned after 6 sessions of null — this restores trend visibility and is a necessary (but not sufficient) condition for eventually lifting the veto. Defense_aerospace and defensive themes show genuine positive momentum, but these improvements do not offset the portfolio-level risk from 61%+ drawdown breaches, elevated VIX (26.78), and deteriorating macro fundamentals (unemployment +40bps, sentiment -21.3% YoY). CONDITIONS TO LIFT VETO: (1) BEAR regime confidence drops below 90% OR transition probability to NEUTRAL exceeds 5%; (2) Drawdown breaches heal to below 50% of tickers; (3) VIX drops below 22; (4) At least 2 consecutive sessions showing drawdown improvement. Until these conditions are met, only conviction DECREASES (risk reduction) should proceed.. Only conviction decreases applied.

Summary: 43 orders, 7 sells, 36 buys, turnover 11.03%, regime sizing 50%

Order failed: sell 1 MLM: insufficient qty available for order (requested: 1, available: 0)

Order failed: sell 1 META: insufficient qty available for order (requested: 1, available: 0)

Order failed: sell 1 VMC: potential wash trade detected. use complex orders