Summary: Markets pushed to new all-time highs in the S&P and Nasdaq with strong breadth across sectors, supportive volume, and continued leadership from growth stocks, while global equities and crypto also showed strength—highlighting a broadly risk-on environment. However, mixed short-term internals like the McClellan Oscillator and Advance-Decline line, along with neutral signals in new highs and small caps, suggest some caution beneath the surface and we would like to see it hold the trendlines from the April-June lows to keep the market uptrend intact.

Risk On

• Markets continued their rise, up between 1-1.5% on the week, pushing to new all-time highs in the Nasdaq and S&P. The S&P is overbought on the real motion and price action (above 2 standard deviations). Watch that the S&P holds the trendline from the April-to-mid-June lows. Also looking for the Dow to break-out to new highs from the 2024 high still in place. (+)
• Volume analysis is marginally positive and still supportive of the risk-on readings. (+)
• Only two sectors were down on the week as semiconductors took a breather from its huge move off the lows in April and to new all-time highs. (+)
• Homebuilders caught a surge this week on speculation about the Fed cutting rates, though still lagging over the six-month period. (+)
• Risk gauges improved with the sell-off in Gold. (+)
• Volatility continued to come off to its lowest levels since Feburary of this year. (+)
• Growth continues to lead value pushing to new all-time highs, though growth is running a bit rich, overbought on price and real motion, though with compressing bands. (+)
• Biotech has been lagging in the Modern Family, and that broke out this week into an accumulation phase, with all the other members improving or in good shape. (+)
• Foreign equities put in strong moves in both developed and emerging markets with new highs in both. Global equities are in risk-on mode. (+)
• Copper’s strong moves continue this week, pushing up to new highs while soft commodities moved into a bear phase. Demand for copper is generally an indicator of strong economic activity. (+)
• Bitcoin’s strength recently has broadened out to alt-coins like Ethereum and Solana - along with an improving regulatory environment for crypto. (+)
• The longer-end of the yield curve, starting with the 7-10 year cleared both its 50 and 200 Day Moving Averages which could be a lead indicator of lower rates in the future. (+)
• Tailwinds for the S&P and Nasdaq as we head into August based on seasonal patterns. (+)

Neutral

• The McClellan Oscilator is still showing a sizable divergence as the market hits new highs and the cumulative Advance-Decline line is relatively weak over the last couple weeks. (=)
• The 52-week new high new low ratio is giving a neutral read with the short-term average under the longer-term average. (=)
• The color charts (moving average of the number of stocks above key moving averages) remains strong on the longer-term and more mixed on 20 and 50 periods. (=)
• Gold is putting in a pennant formation since April and it will be important to see which direction it breaks out. (=)
• The Small Caps have a strong seasonal pattern next week before weaker seasonal small cap trends for the next few months. (=)