Summary: The overall picture remains cautiously risk-on, supported by bullish major-index phases, strong foreign equities, low volatility, improving risk gauges, and Bitcoin holding near its highs. However, weakening breadth and market internals, deteriorating Modern Family participation, bond-market pressure, and unfavorable September seasonality argue for selective equity exposure rather than aggressively adding risk. 

Risk On

• Markets were mixed with the SPY, QQQ, and IWM only up marginally and DIW down. SPY, QQQ, DIA are in bullish phases. Real Motion is weak across the board with the exception of the SPY ondaily charts but weekly momentum intact.. (+)
• Risk gauges improved to 80%. (-)
• Volatility trading at its lowest levels since Decemeber 2025. Some concern with markets showing weakening breadth. (+)
• Value and Growth remain in bull phases with growth showing a little more short-term momentum than value. (+)
• Foreign equities, led by emerging markets, looks quite strong and showing good relative strength to U.S. markets and led by commodity sensitive and technology-related trends. (+)
• Bitcoin continues to hold its recent highs, above its 200 and 50-Day Moving Averages. (+)

Neutral

• Volume patterns improved marginally with about equal distribution days vs accumulation days over the last couple weeks. (=)
• The modern family is starting to show some cracks, with 5 of the six members losing their bull phases. Biotech is holding onto a strong lead over its 50-Day Moving Average and semiconductors looks like it's recovering. (=)
• Soft commodities got a bit overbought and are showing potential mean reversion or flagging action. Copper is showing some compression around its highs for 2026. (=)
• Gold closed right on its 50-Week Moving Average and still digesting its recent moves. If it regains its 200 and 10 Day Moving Averages, we could see another move testing its highs. (=)
• Sectors were a neutral, with Semiconductors and biotech up, though consumer discretionary took a hit. (=)

Risk Off

• Market internals weakened across the board with the up down volume ratio, McClellan Oscillator and Cumulative Advance Declines all below their mid-points, despite the market being up marginally. (-)
• The 52-Week new high new low ratio moving averages continue to trend lower. (-)
• Bonds are one of the major concerns with the 7-10 year getting hit hard. (-)
• Seasonal trends historically point to a weak September. (-)
• The color charts (moving average of stocks above key moving averages) are showing weakness almost across the board with even the 200-Day relationships weakening. (-)

Actionable Trading Plan

Maintain moderate equity exposure, but avoid aggressively adding risk while breadth, Real Motion, and market internals remain weak. Favor SPY, selective growth, emerging markets, semiconductors, and biotech; add only when price strength is confirmed by improving momentum and participation, while trimming consumer discretionary and other weakening positions. Keep stops tight, consider inexpensive hedges while volatility is low, avoid chasing overbought commodities, and treat a further deterioration in breadth or a break of key index support as a signal to reduce exposure and raise cash.