Summary: Market sentiment remains cautiously risk-on but weakening, as bullish trends in foreign equities and semiconductors are offset by deteriorating breadth, weakening volume patterns, and a rise in volatility and safe-haven assets like gold and bonds. While seasonality remains favorable, short-term headwinds and mixed sector performance suggest a pivotal week ahead.

Risk On

• The color charts (moving average of the percentage of stocks above key moving averages) show neutral readings on the 20-day periods while 50 and 200 remain bullish but weakening giving an overall weakening risk-on reading. Next week will be key. (+)
• Foreign equities continue to lead the U.S. with both emerging and developed foreign markets in bull phases. (+)
• Overall, we are in a strong seasonal period, especially July, however, some short-term weakness in the next week or two. (+)

Neutral

• Markets were down between -0.5% and -1.7% on the week with both the DOW and Russel 2000 back to negative territory on the year. All four indexes have positive TSI. Market phases saw some weakening in the DOW and the Russel’s failed just under it’s 200 Day Moving Average. (=)
• Seven of the fourteen sectors were up on the week with a mixed read with Retail hit the most and Gold Miners and Energy up. Though, Technology and Semiconductors were strong, bucking the trend. (=)
• The McClellan Oscilator moved to a negative read while the shorter-term up/down volume and advance decline still in neutral or positive territory. (=)
• The 52-Week New High New Low ratio weakened a bit from its hot readings. (=)
• For the first time since April, Value bottomed out on a relative basis to growth and is now leading on a short-term reading, though both held up relatively well to close out the week. (=)
• The modern family appears weak across the board with the one exception, semiconductors are still quite strong and it's hard to get negative when they are leading. (=)
• Agriculture and copper retained their bullish phases, though it came off a little bit, still indicating some inflationary pressure. (=)
• Continued side-ways action in a trading range for rates. (=)
• Bitcoin is in a trading range between $100k and $111k. (=)

Risk Off

• Volume patterns weakened with only one accumulation day for the DOW and NASDAQ. (-)
• Risk gauge weakened to risk-off with the strength in gold and bonds. (-)
• Volatility reversed its downward trajectory with the cash VIX closing above its 200-Day Moving Average while the futures bounced sharply after being a bit overdone on the downside, touching the lower bollinger bands mid-week. (-)
• Oil exploded higher and Gold closed at all time highs on Friday due to escalations in Middle East tensions. (-)