Summary: Positive price action across all four key U.S. equities indexes (with the S&P making new all-time highs) and a breakout of both the monthly and six-month calendar ranges, along with a strong improvement in foreign equities puts us in a strong risk-on environment. Considering potential severe tariffs, maintaining risk controls is crucial as the markets can shift quickly.

Risk On

• Three out of the four indexes are in bull phases and momentum readings have definitely improved. The S&P touched new all-time highs this week. Indexes were up between +1.83% to +3.23%. (+)
• Volume patterns confirmed the positive price action with both the S&P and the Dow now only having one distribution day over the last ten trading days. (+)
• With the exception of energy, all sectors were positive on the week, led by technology, while risk-off sector utilities lagged, up only +0.98% for the week.(+)
• Foreign equities had been lagging for a while, but were market hotspots this week, many up over +5%. (+)
• Yield curve continues to steepen as Short-term rates eased. (+)
• The Nasdaq Composite came a hair away from hitting new all-time highs and not running quite as rich as the S&P for internals. (+)
• The dollar got hit pretty hard with a sharp rally in the Euro, entering a recovery phase. A weaker dollar is generally better for equities. (+)
• The new high new low ratio continued to improve this week. (+)
• Sentiment reading improved across the board with both 1-month and 3-month readings in bullish territory, though the cash index remains elevated despite the market putting in new highs. (+)
• Strong rally in foreign markets, which are potentially poised to take out the 200-Day Moving Average in both emerging and developed markets. Momentum is not yet overbought despite the strong action. (+)
• Value stocks, on a short-term basis, are outperforming the S&P and in a bull phase. Both value and growth are in bull phases which is considered risk-on. (+)
• Bitcoin is compressing above 100k and acting as risk on asset with strong seasonal trends about to unfold (+)

Neutral

• On a positive note, semiconductors still continue to lead the S&P, however, regarding the modern family, four out of the six members remain either in warning or recovery phases. (=)
• Interesting divergence between soft commodities, metals, and energy. With Gold and DBA up on the week attacking recent highs, while energy got hit hard due to geopolitical developments. (=)
• Market internals improved significantly this week with the McClellan Oscillator confirming price action in the S&P, though potentially reaching overbought levels. (=)
• The short-term moving average of stocks above their key moving average (color charts) has improved and been positive, while longer-term readings remain negative and divergent. (=)
• Risk gauges improved to a strong neutral with both XLU/Utilities and equities in positive phases. (=)