Summary: The market recovery on Friday, led by technology stocks and improving market internals is a good sign if it persists. The upcoming calendar ranges will be a key for picking up the next move in the markets.

Risk On

• The McClellan Oscillator turned positive by Fridays close for both the NYSE and the QQQ while the cumulative advance decline line also found support. (+)
• The NYSE new high new low ratio flipped positive with a buy signal this week on a short-term basis and even stronger on the Nasdaq. (+)
• Looking at the number of stocks above key moving averages, things are starting to turn around with all three timeframes having a positive slope. (+)
• Growth continues to outperform value with hugely divergent momentum patterns confirming growth’s leadership. (+)
• Bitcoin held critical support and bounced off those levels. (+)
•  Copper held the lower end of its trading range and if it can hold recent lows, could be a positive development for the economy. (+)
• Sister Semiconductors rallied sharply and showing some leadership over the S&P. (+)

Neutral

• Despite the strong rally on Friday, on the QQQ’s remained in a bullish phase and remains to be seen if the other indexes can rally enough to reclaim their bullish phases.(=)
• Volume reads stabilized at a neutral reading with roughly equal amounts of accumulation vs distribution days across the major indexes. (=)
• Soft commodities regained a bull phase, potentially inflationary. (=)
• A mixed read on sentiment readings with the 1-month below the 3-month, but still holding important support (110 ratio level). (=)
• Gold tested its 50 Day Moving Average but closed under it with momentum waning and looks stuck in a trading range. (=)
• Energy from USO, oil and gas exploration, etc, led the market higher by a wide margin. (=)
• With the strength in utilities and gold on a relative basis, the risk gauges backed off to a weak neutral. (=)
• Interest rates continue to sit at elevated levels, trading at the bottom of its recent levels. The yield curve continues to steepen. (=)

Risk-Off

• Over the last five trading days, 10 of the 14 sectors were down, led by technology and consumer discretionary sectors, while utilities were strong on a relative basis, indicating more of a risk-off picture. (-)
• Foreign equities continue to underperform U.S. equities and are in negative phases. (-)
• The color charts are negative across the board. (-)