Summary: Overall sentiment leans cautiously risk-on, with strength in major indices, growth stocks, and global equities, while some mixed signals—like weak small caps, leadership from defensive sectors, and neutral volume patterns—suggest a market still navigating pockets of hesitation.

Risk On

• Markets were up about one percent over the last five trading days thanks to Tuesday’s gap higher. Nasdaq and S&P remain the strongest and not far off their all-time highs. (+)
• 11 of the fourteen sectors were up on the week, however, consumer staples, gold miners, and utilities led, all more risk-off sectors, while semiconductors was the weakest sector, a weak positive. (+)
• The new high new low ratio, based on moving averages and the current reading are all converging at fairly positive levels. (+)
• The color charts (moving average of stocks above key moving averages) are showing neutral readings for the short-term, while the intermediate and longer-term readings are still very positive. (+)
• Risk gauges backed off slightly from their most bullish readings, but remains strongly positive. (+)
• Growth continues to outperform value stocks with Growth in an accumulation phase while Value is still in a recovery phase. A weak positive reading. (+)
• In the Modern Family, retail recovered its 200-Day Moving Average and is leading the rest of the family. Overall, we have a weak risk-on reading from the family. (+)
• Foreign equities backed off a little from their recent leadership, but remain in strong bull phases and globally, equities look like they are in risk-on mode. (+)
• Agriculture ETF, DBA, broke down under its 50-Day Moving Average into a warning phase. It needs to hold onto its 200-Day Moving Average to keep the longer-term trend intact. Could signal some inflationary pressures easing. (=)
• Rates calmly eased over the week after testing its down channel lows (and oversold levels on our Real Motion indicator). (+)
• Seasonally, we are hitting an overall strong period for markets, especially for Small Caps, which have been lagging this year. (+)

Neutral

• Small caps remain quite weak, down almost -7% year-to-date. (=)
• Volume patterns remain neutral, though the Russels, otherwise the weakest index, improved. (=)
• Mixed read with the McClellan Oscillator hovering just under neutral while short-term up down volume patterns improved. (=)
• Volatility remains moderately elevated overall, though the cash VIX dropped below its 200-Day Moving Average into a distribution phase. (=)
• Gold is looking a little indecisive. A large flag may be forming with a potential breakout to the upside or a potential failure of its bull phase if we break $296.50. (=)