Summary: Markets weakened broadly with indexes down 1–4%, deteriorating internals, rising volatility, and nearly all sectors falling as oil and commodities surged amid escalating war concerns and seasonal market weakness. Despite the risk-off environment, growth stocks held up relatively well while gold slipped and the dollar strengthened, suggesting potential short-term mean reversion given deeply oversold conditions.

Neutral

• Growth stocks, a weak segment of the market recently, held up very well this week. If growth stocks can regain their 200 Day Moving Average ($465.76 in VUG), it could be a positive sign. (=)
• Despite the war news, gold prices actually closed marginally lower than last week. (=)
• The dollar strengthened, reversing its recent decline. (=)
• Bonds saw a big runup prior to the war announcement, then sold off back to its 50-Day Moving Average, but still holding onto its bullish phase. (=)

Risk Off

• Seasonally, we are in one of the weaker periods of the year for equities, though it tends to strengthen into the end of the month. (-)
• Markets trended lower, down 1-4% across the four key indexes, with 3 of the 4 down year-to-date and flirting with negative TSI numbers for the first time since April/May 2025. DIA, IWM, and SPY are deeply oversold on real motion, so we could see some mean reversion. (-)
• Volume patterns are confirming the move lower this week. (-)
• All the sectors were down significantly on the week, except energy, due to the jump in oil prices. Technology and communications were down the least of all the down sectors. (-)
• Volatility, along with fossil fuels, roared this week. (-)
• Market internals flipped negative this week across the board. (-)
• The new high new ratio continued to trend lower and is stacked and sloped negatively. (-)
• The color charts (moving average of stocks above key moving averages) flipped or continued to show negative readings. (-)
• Volatility broke out of a three and a half month trading range with the cash vix showing its highest readings going back to April of last year. (-)
• The risk gauges maintained a fully negative reading this week. (-)
• The modern family moved into a warning phase across the board, with retail also failing its 200-Day Moving Average. (-) 
• Emerging and developed markets got clocked even worse than U.S. markets, moving into warning phases, but significantly oversold on a short-term basis. (-)
• Soft commodities (DBA) moved significantly higher, breaking out of its base for the last few months and into an accumulation phase. (-)
• Oil posted one of its largest weekly gains in decades, related to the on-going military operations in Iran. (-)

Actionable Trading Plan

With market internals deteriorating, volatility breaking out, and the risk gauges fully negative, the primary focus should be capital preservation and tactical trading rather than aggressive positioning. Reduce broad market exposure and avoid adding new index longs until markets reclaim key levels or volatility begins to contract.

In the near term, deeply oversold conditions in SPY, DIA, and IWM could produce a short-term mean reversion bounce, so traders can look for tactical long setups if momentum improves, but treat these as short-duration trades rather than trend changes. Technology and communications held up relatively well, so continue to monitor growth stocks for relative strength, with a reclaim of the VUG 200-Day Moving Average ($465.76) serving as an important signal that risk appetite may be returning.

Meanwhile, energy and soft commodities remain the clearest leadership groups, supported by the surge in oil and geopolitical risk, so pullbacks in those areas may offer the most constructive long setups. Until market internals and the new high/new low ratio begin to stabilize, maintain smaller position sizes, tighter stops, and a defensive bias, recognizing that volatility and geopolitical developments could continue to drive sharp market swings.