Market Summary

Markets extended their rally with major indexes hitting new all-time highs, strong momentum across sectors, improving internals, and confirming risk-on signals from volatility and global equities. However, the lack of accumulation days, mixed Economic Modern Family readings, and neutral intermarket signals from commodities, the dollar, and Bitcoin suggest underlying strength tempered by selective caution.

Risk On

• Markets put in another strong week up 2-2.5% and new all-time highs in three of the four indexes with strong momentum that is not yet overbought on Real Motion.(+)
• Most sectors were up, with a recovery in regional banks and technology. Utilities and gold miners were down on the week. (+)
• Silver and gold and related miners were down on the week while the broader market was up. (+)
• The McClellan Oscillator turned positive and market internals improved across the board with positive readings. (+) 
• The slopes on the new high new low ratio all flipped from negative to positive. (+)
• The color charts (moving average of stocks above key moving averages) for the S&P are generally positive on the 20 and 200 periods, with a bit weaker intermediate readings on the 50 period.Additionally, the QQQ’s were positive across all time frames while IWM was very mixed. On balance, we see this as a positive reading. (+)
• Volatility moved back into a bear phase with short-term futures trading near all-time lows, giving a risk-on signal. (+)
• Growth is outperforming value, with both of them in strong bull phases. (+)
• Emerging and developed foreign markets confirm risk-on bias. (+)
• Rates are holding onto their bull phase, a positive sign for equities. (+)
• Seasonally, assuming we don’t have a black swan even in the last few days of Octobert, we are entering one of the strongest seasonal months, November. (+)

Neutral

• Volume patterns are neutral at best with zero accumulation days for the S&P despite it making new all-time highs. (=)
• The risk gauges improved with the relative weakness in Gold and Utilities to a strong neutral reading.. (=)
• Economic Modern Family is mixed, with half of the members in warning phases, and the other half in bull phases and semiconductors and biotech pushing new highs. (=)
• Soft commodities seem to point to easing inflation, a bit of a mixed message with the latest CPI report. Appears to be mostly in a trading range. (=)
• Gold and silver had a significant sell-off after one of the largest parabolic rallies in many years. Short-term relief in a potentially negative intermarket trend. Neutral overall. (=)
• The dollar is neutral as long as it can hold its 50-Day Moving Average and trading range. (=)
• Bitcoin is sitting in between its 50 and 200 Day Moving Average and has not confirmed the breakout in equities even though many consider Bitcoin to be a risk-on indicator. (=)

Actionable Trading Plan

Market Context

Momentum remains strong and broad-based with multiple indexes at new highs, positive internals (McClellan, NH/NL slopes, Real Motion), and volatility confirming a risk-on regime. Seasonality into November provides a supportive backdrop, though lack of accumulation days and mixed Economic Modern Family readings warrant measured exposure increases rather than full risk allocation.

Equity Positioning

• Add to strength: Maintain or modestly increase core equity exposure, prioritizing growth-oriented sectors (technology, semiconductors, biotech) and regional banks as recovery plays.
  
• Entry timing: Use short-term pullbacks to 10–20 day moving averages for adds; avoid chasing extended charts.
  
• Stops: Place stops 2–3% below swing lows or key support levels.
  

Sector & Thematic Rotations

• Overweight: Tech (QQQ, SMH), Biotech (XBI), Regional Banks (KRE).
  
• Underweight or avoid: Gold, Silver, and Utilities until relative strength improves.
  
• Watchlist: Energy and Industrials for potential rotation if rates remain stable.
  

Global & Intermarket Positioning

• Maintain exposure to emerging markets (EEM) and developed foreign equities (EFA) while rates and dollar trends remain neutral-to-supportive.
  
• Avoid gold/silver miners (GDX, SIL) until they find technical support after recent breakdowns.
  
• Keep an eye on Bitcoin for confirmation of broader speculative risk appetite — above 50-day MA would reinforce equity bullishness. Below 200 would cause some concerns.
  

Risk Management

• Keep overall risk allocation at 75–85% of full target exposure — reflecting a strong trend but acknowledging neutral volume patterns.
  
• Tighten stops or hedge modestly (via VIX calls or inverse ETFs) if indexes break below the 20-day moving average.
  
• Reassess risk posture if the S&P posts multiple distribution days or volatility spikes above its recent range.