Summary: Despite a modest pullback in equities, risk-on conditions remain mostly intact with crypto and semiconductors hitting new highs, volatility declining, and growth continuing to outperform value. However, underlying market internals have weakened to neutral, with mixed volume patterns, sector performance, and growing strength in commodities like gold and oil signaling potential headwinds.

Risk On

• Markets were down marginally this week between -0.36% and -1.33%, after digesting monster gains since the April lows. We want to see the market hold the lows of this week to maintain its strong bullish trend. (+)
• Risk gauge remains in full-risk on mode, though increased strength in gold could flip some of the ratios negative. (+)
• Short-term volatility continued to drop on the week. (+)
• The modern family held up well relative to the benchmark. We closed at new all-time highs in semiconductors without being overbought and saw some improvement in Transportation and Biotech. (+)
• Growth continues to lead value on short and long term reading. (+)
• Bitcoin and crypto broke out to new all-time highs. It is generally seen as a risk-on move as speculative money loves crypto. (+)
• July is one of the strongest seasonal months of the year. (+)

Neutral

• Volume patterns backed off from mostly risk-on last week to neutral readings. With the Nasdaq 100 showing the weakest reading of the four key indexes.(=)
• 9 sectors that we track were down on the week and 9 were up on the week. Consumer staples were down while semiconductors were up. (=)
• Up/down volume retreated from overbought levels to slightly negative. The McClellan Oscillator backed off from overbought to slightly positive but looking a little heavy. (=)
• The new high new low ratio flipped negative on a short-term basis from overbought levels, however, intermediate trends remain positive. (=)
• On a short to intermediate term basis, the color charts (moving average of stocks above key moving averages) have flip to neutral at best, however, on the 200-day periods, the trend remains intact. (=)
• Large cap foreign equities have given up its leadership against the S&P and really need to hold its 50-Day Moving Average to remain in a bullish phase. If it does break, it could be a leading indicator of a potential global sell-off in equities. (=)
• Copper exploded to the upside based on geopolitical events, AI demand, and tariffs. (=) 
• Despite the fact that on the longer-end of the yield curve moved back into a bear phase/higher rates. It remains unclear what the Fed will do next in the upcoming July meeting. (=)

Risk Off

• Commodity prices, led by metals and oil were the biggest 5-day leaders regarding all asset classes. (-)
• The S&P hit major resistance against gold on a longer-term basis and could indicate further issues for the market.(-)
• Gold resumed its bullish trend and oi lis be trending higher as well. (-)