Summary: Markets continued to push to new highs with strong performance in QQQ, semiconductors, gold miners, emerging markets, and Bitcoin, while volatility stayed subdued and both growth and value hit fresh highs. Offsetting this risk-on strength, leadership breadth weakened with retail, homebuilders, and parts of the Modern Family lagging, internals diverging from price, the risk gauge still reading risk-off, and metals flashing a potential cautionary signal.

Risk On

• Markets pushed higher on the week between +0.26% for IWM to +1.80% for QQQ and most of them have closed on yearly or all-time highs. (+)
• The majority of sectors were up on the week, led by gold miners and technology/semiconductors. Despite the drop in rates and projections of fed easing, homebuilders were down almost -2.8% for the week. Retail down as well. Sector results are a bit murky but maintain a risk-on footing. (+)
• New high new low ratio is looking positive in the short-run with a bit of a weakening neutral long-term signal. A weak-risk on reading. (+)
• The color charts (moving average of stocks above key moving averages) are marginally positive for IWM on shorter timeframes with a strong longer-term trend. (+)
• Volatility continued to languish at low levels as the market moved to new highs. (+)
• Both growth and value are in bullish phases and made new highs this week. (+)
• Emerging markets exploded on the week with all foreign equities maintaining strong performance. Emerging markets likely got a lift on commodity prices, a potential cautionary note. (+)
• Bitcoin had a good week, recovering its 50-Day Moving Average and back into a bullish phaseand entering an excellent seasonal period. (+)
• September is historically the weakest month for seasonal performance. Though we are bucking that trend so far and the negative September trends tend to occur in years where we enter September in a downtrend or under key moving averages. Reference last weekend's newsletter. (+)

Neutral

• Volume patterns were neutral with fairly equal amounts of accumulation and distribution days over the last 10 days. (=)
• Market internals remain positive but are diverging from price action as market hits new highs and internals fall closer to mid-range. (=)
• Four of the six members of the modern family were down on the week and lagging the S&P based on our leadership indictor on a short-term basis, though Semiconductors exploded higher to new all-time highs. (=)
• Rates continue to project that the fed will cut in the upcoming meetings with the 7-10 year in a strong bull phase and TLT confirming a breakout above its 200-Day Moving Average for the first time since December of last year. The steepening of the yield curve could be a potential warning sign. (=)

Risk Off

• The color charts (moving average of stocks above key moving averages) on a short and intermediate term basis for, the S&P500 is negative, while the longer-term timeframe remains positive,and the NASDQ100 is negative in all timeframes (-)
• Risk gauge maintained its risk-off reading. (-)
• Gold and metals, including silver, has been explosive. (-)

Actionable Trading Ideas:

Trading Bias

• Maintain an overall bullish bias new highs in QQQ, semiconductors, and emerging markets, along with subdued volatility and strength in growth/value.
  
• Acknowledge mixed internals and sector divergences (retail, homebuilders, some Modern Family weakness) — so overweight leaders, underweight laggards.
  

Long Setups

• Semiconductors (SOXX, SMH, NVDA, AMD)
  

• • Entry: Buy on minor pullbacks to short-term support (e.g., 10- or 20-day MA).
    
  • Stop: Below last week’s breakout level.
    
  • Target: New highs +5–7%.
    

• Emerging Markets (EEM, EWZ, FXI, commodity-linked EM ETFs)
  

• • Entry: On continuation above last week’s breakout.
    
  • Stop: Below 50-day MA.
    
  • Target: +8–10% into Q4.
    

• Bitcoin / Crypto ETFs (BTC, BITO, IBIT)
  

• • Entry: On hold of 50-day MA reclaim.
    
  • Stop: Below 50-day MA.
    
  • Target: Retest of yearly highs.
    

• Gold Miners / Metals (GDX, SIL, GLD, SLV) – Tactical Momentum Play
  

1. • Entry: On strength above last week’s high.
     
   • Stop: Below breakout pivot.
     
   • Target: +10% short-term swing. 

Risk Management

• Sizing: Keep core longs (semis, EM, Bitcoin) larger; hedge with selective shorts (XHB, XRT) to balance breadth weakness.
  
• Stops: Use trailing stops to lock in profits in leaders.
  
• Risk Gauge Reminder: With the official gauge still reading risk-off, avoid overleveraging — bias longs, but keep some hedges on. 

Cautionary Notes

• Yield curve steepening may foreshadow stress — keep exposure tactical.
  
• Seasonality: September is historically weak, so tighten stops if market momentum falters.
  
• Internals Divergence: If advance-decline and new highs vs. lows worsen, reduce long exposure.