Research · March 2026

The Market as a
Linear System

Every single commodity and currency moving like a drum. We treat a presidential Truth Social post as a delta function in geopolitical risk space and measure each asset's transfer function. The overshoot is tradeable.

On March 26, 2026 at 20:11 UTC, a single social media post moved every futures market simultaneously. The response wasn't random—it was a damped impulse response, and each market is a different oscillator. We fitted parametric models, benchmarked trading strategies, and built a gym to test them live.

The Impulse

A Trump Announcement Creates Opportunity—TACO. The post hit at 20:11 UTC. Within 60 seconds, ES gapped +0.94%, Brent crude dropped −3.37%, and Treasury futures spiked +0.24%. By minute 10, the algo overshoot was already reverting. By minute 40, 70–90% of the initial move had dissipated in equity and bond markets.

Three distinct events in 48 hours revealed the fundamental asymmetry: de-escalation overshoots and reverts (fadeable), escalation cascades and amplifies (follow). The physics is different. The strategy must be different.

IMPULSE RESPONSE — ALL INSTRUMENTS  
Normalized % return from pre-event price. t=0 is the TACO impulse. Data: 1-min bars from IBKR + Hyperliquid. Dashed lines show parametric fits.

The Asymmetry

The fundamental finding: the response is nonlinear in exactly one way. De-escalation events (relief) overshoot because algos front-run the move, then revert as the information is digested. Escalation events (fear) cascade because leverage + loss aversion creates a positive feedback loop.

RESPONSE TYPE COMPARISON
De-escalation: overshoot then revert (tradeable). Escalation: cascade then amplify (don't fade). Gold: driven response, peaks at t=29m. Silver: step function with 2-minute human delay.

The Oscillators

Each market responds as a different type of damped oscillator. Algo-dominated futures (ES, NQ, RTY) are underdamped—they overshoot and ring. Oil is the anti-correlated factor. Gold is driven, peaking at t=29 minutes. Silver has a 2-minute dead time—human traders placing phone orders.

The Gym

A live 165fps synthetic market feed. Fire a TACO event and watch the impulse propagate through all instruments simultaneously. The parametric models drive realistic price responses. Toggle strategies to see entry, exit, and P&L in real time.

1.0x
StrategyParametric Fade
P&L$0
Trades0
FPS0

Benchmark Results

Closed-loop evaluation: detect TACO events, predict the response curve, simulate fade trades. The parametric model beats TimesFM 7× on de-escalation events (0.09% vs 0.65% MAE) but fails on escalation. The optimal system is an ensemble.

MODEL COMPARISON — TACO DE-ESCALATION EVENT
Mean absolute error (%) for 37-bar forecast after 3 revealed bars. Lower is better. Parametric uses fitted two-phase decay; Naive assumes full mean-reversion; TimesFM is zero-shot 500M.

Detection Accuracy

EventDirectionDetectedConfidenceCorrect
TACOde-escalationYes0.90Yes
AntiTACO-1escalationYes0.40Yes
AntiTACO-2de-escalationYes0.65Yes
non-event 18:00noneYes (FP)0.80No
non-event 19:00noneYes (FP)0.70No
non-event 20:30noneNo0.00Yes
non-event 08:00noneNo0.15Yes

Strategy P&L

EventSymbolSideEntryExitP&L
TACOESShort5935.05917.5+$350
TACONQShort2033720277+$240
TACOBZLong72.1872.91+$730
TACOZNShort110.56110.48+$125
AntiTACO-2ESShort5890.55894.0-$70
AntiTACO-2NQShort2015020188-$152
AntiTACO-2BZLong71.8071.15-$650
AntiTACO-2RTYShort2100.22104.8-$230
Net+$526