Summary: Markets are still risk-on near highs with strong breadth and low volatility; small caps and retail are firm, and we’re watching QQQ’s 50-day average and the Sept 2nd lows as key support. Offsets: a sharp gold breakout, Treasuries (TLT) moving above the 200-day, mixed sector rotation, and short-term froth—together nudging our gauges toward weak neutral.

Risk On

• Markets treaded water this week right around their all-time highs with bullish trends remaining intact. A key level to watch would be the 50-Day Moving Average and the lows set on September 2nd in the QQQs. (+)
• Volume patterns moved to marginally bullish with the biggest strength in QQQ. (+)
• Market internals are looking positive and the cumulative advance decline line hit multi-year highs. (+)
• The new high new low ratio is maintaining its bullish configuration over the intermediate term. May be a bit overbought short-term. (+)
• The color charts (moving average of the stocks above key moving averages) looks most positive for the Small Caps and more mixed-to-posive for SPY and QQQ. (+)
• Volatility remains in a bear phase near its lowest recent levels. (+)
• Value and Growth performing about the same as the overall market and in bullish phases. On a longer-term basis, growth is well outperforming value. (+)
• The modern family has bull phases across the board with new yearly highs in Retail, IWM, and Biotech. (+)
• Emerging and developed markets remain in bull phases and matching the recent performance of U.S. equities. (+)

Neutral

• The sector summary is giving a mixed read with more sectors up than down, though it was an inconsistent mix, with Gold Miners and Retail up, and semiconductors, technology were down. We are seeing more weakness in short-term momentum as measured by the Real Motion 10 /50 settings across many sectors. (=)
• A big breakout in TLT’s this week. First time we have been above the 200-Day Moving Average and in an accumulation phase since April. If it can sustain it it will be the first major action above the 200-Day Moving Average since last fall. Market seems to be interpreting rates cuts as bullish, though a steepening of the yield curve is associated with major corrections in the past such as the 50% drop in 2008. (=)

Risk Off

• A parabolic move in Gold this week, breaking out of its compression for the last five months. (-) 
• Markets are entering their seasonally weakest month of the year. (-)
• Risk gauges moved to risk due to the strength in gold and treasuries. (-)

For Actionable Trading Guidance:

🔧 Market Stance & Exposure

• Bias: Maintain a moderate risk-on posture, while watching for signs of short-term exhaustion.
  
• Target equity exposure: ~75–85% of max risk allocation.
  
• Cash reserve: Keep 15–25% in cash to deploy on pullbacks or confirmation breakouts.

🧭 Key Technical Levels to Watch

• QQQ 50-Day Moving Average and September 2nd lows are critical supports.
  
• A decisive break below both = reduce exposure in tech/growth by 25–50%.
  
• Volume leadership in QQQ suggests staying tilted toward large-cap growth until that support breaks.
  
• Cumulative advance-decline line at multi-year highs → confirms internal breadth strength.

📊 Positioning Guidelines by Theme

✅ Equities

• Focus long positions on:
  
• IWM (Russell 2000) – small caps showing strongest "color chart" breadth. Add or overweight.
  
• XRT (Retail) and XBI (Biotech) – new yearly highs suggest leadership. Consider 1–2% tactical adds.
  
• SPY/QQQ – maintain core exposure; do not increase unless new highs break with volume.
  
• Caution on Tech & Semis (XLK / SMH):
  
• Flat or down this week. Hold existing but avoid fresh adds until relative strength improves.

🌍 Global Equities

• Maintain exposure to EFA (Developed) and EEM (Emerging):
  
• Both in confirmed bull phases.
  
• Target: 5–10% total allocation between them.
  
• Monitor 50-DMA for any breakdown.

🏦 Rates & Treasuries (TLT)

• TLT breakout above 200-DMA is notable:
  
• Initial position: 3–5% allocation in TLT with stop just below 200-DMA.
  
• Add on confirmation: Higher high + strong volume + follow-through next week.
  
• Watch for yield curve steepening — historically tied to market corrections. Be ready to raise cash if TLT surges while equities fade.

⚖️ Style Tilt: Growth vs Value

• Both in bullish phases short-term, but Growth still leading long-term.
  
• Maintain slight growth overweight (QQQ over DIA or IWD).
  
• Avoid big shifts until leadership reverses or internals deteriorate.

🟡 Caution Flags / Transition Triggers

Reduce risk exposure if 2 or more of the following occur:

• QQQ closes below 50-DMA + Sept 2nd low on volume.
  
• A/D line rolls over or NH/NL ratio turns negative.
  
• Risk gauge shifts fully neutral or risk-off.
  
• VIX closes > 2 ATR above recent low or enters bull phase.
  
• TLT surges while SPY drops >2% in a single day.