Summary: Overall risk-on conditions strengthened as major indexes pushed to new highs led by small caps, market internals and new-high/new-low readings confirmed broad participation, volatility stayed near lows, and leadership expanded into metals, value, foreign equities, and multiple “modern family” groups. Offsetting this optimism are still-mixed volume patterns, lagging growth versus value, elevated leadership in defensive metals and gold alongside rising oil, and a few cross-asset signals (SPY/GLD, rates, crypto) that warrant monitoring for early warning signs if growth weakens.

Risk On

• Indexes were up strong this week led by small caps, up over 4.5%., Three of the four have closed on all-time highs in bull phases and aren’t overbought on real motion. We see some healthy rotation out of the concentrated themes from last year. (+)
• Sectors were up nearly universally (XLU only sector down and it ). (+)
• The biggest leaders in the market this week were metals, with palladium, silver, gold miners up significantly. Some from geopolitical stress, but also infrastructure and technology demand.(+)
• Cumulative advance decline line (hit new all-time highs) and market internals turned positive. (+)
• New high new low ratio is stacked and sloped positive. (+)
• The color charts (moving average of stocks above key moving averages) is bullish for SPY and IWM and more mixed on QQQ. (+)
• Risk gauges flipped back positive with the SPY/GLD ratio the only one showing risk-off. (+)
• Volatility remains low with cash volatility near its all-time lows. (-)
• New high in value while growth is still lagging, though both are in bullish phases. Value is running a little rich in-terms of price momentum. If growth starts to drop below lows of last week, it could be a concerning or early warning sign. (+)
• The modern family is strong across the board, with some new highs this week and everything in bull phases. (+)
• Foreign equities look to be in a strong uptrend without getting overbought and outperformging the U.S. (+)
• Soft commodities aren’t showing much inflationary pressure. (+)
• January seasonals tend to be very strong, typically led by Nasdaq with good participation in S&P and IWM. (+)

Neutral

• Volume patterns remain mixed with strength in DIA and IWM while much weaker in SPY and QQQ. (=)
• The biggest leaders in the market this week were metals, with palladium, silver, gold miners up significantly. Some from geopolitical stress, but also infrastructure and technology demand.(+)
• Gold remains strong and oil started to move this week. Demand for energy is there along with persistent geopolitical stress. (=)
• Bitcoin did get a little pop this week and looks better on the weekly chart. (=)
• Rates hat a muted response to the employment numbers and remain in a channel. (=)

Actionable Trading Plan

Market posture: Stay risk-on, but not maxed out. Breadth, new highs, and global strength support staying invested, while mixed volume and metals leadership argue for discipline.

What to own now

• Keep core exposure in broad equity and small-cap baskets to capture expanding participation.
• Overweight value/cyclical groups and foreign equities while they continue to lead.
• Hold a tactical sleeve in metals/miners, but manage them actively.
  

What to be careful with

• Growth/tech positions stay on a tighter leash until leadership improves.
• Avoid concentrating in last year’s crowded winners.
  

What to do this week

• Add on market digestion days, not strength.
• Rotate, don’t chase — shift capital toward areas showing improving participation and away from fading themes.
• Rebalance exposure weekly based on breadth, leadership, and risk-gauge alignment.
  

Risk controls

• Keep overall exposure slightly below full risk-on.
• Begin trimming if growth weakens further, metals continue to dominate leadership, or breadth/new-highs lose confirmation.