Markets had a strong week across the board, up between +1.9% and +4.4%, led by small and mid-cap stocks. (+)
All sectors were positive on the week with the biggest theme being the strength in Gold Miners and Homebuilders. (+)
The biggest theme regarding the global macro picture was that energy, including clean energy, and precious metals were up significantly. (+)
The McClellan Oscillator regained positive territory for both S&P and Nasdaq. (+)
The modern family had a strong rebound this week with retail and regional banks exploding to new recent highs and semiconductors, while positive on the week, clearly losing some leadership and closing in a warning phase. (+)
Bitcoin rallied to almost $100k, highlighting where speculative money is going with the dollar rocketing back to its 2022 highs, potentially about to break out of a multi-year sideways pattern. (+)
Color charts (stocks above key moving average) are showing IWM with strong leadership across short, intermediate, and longer timeframes.(+)
Neutral
The risk gauge weakened due to the strength in gold and relative weakness in lumbar. (=)
Gold exploded higher, reclaiming its bullish phase, most likely as a result of three factors: oversold condition, geopolitical stress, and inflationary pressures from rising commodity prices. (=)
Seasonal patterns in the key indexes may have topped with the exception of IWM, which still has some more potential upside. (=)
The 1-month vs 3-month volatility ratio closed above 1.10 and remains positive. Volatility remains elevated as the market hits new highs, indicating some remaining nervousness in the markets. (=)
Value stocks flipped positive relative to growth on a short-term basis. A bit concerning, growth stocks relative to the S&P baseline flipped negative over a shorter analysis period. (=)
Seasonal patterns have become significantly distorted as the market sorts out the consequences of the new presidential administration, with the biggest exception being Bitcoin which is totally in alignment with its seasonal pattern.. (=)
A mixed read on market internals for the S&P, despite strength in price, with a little weaker action in the Nasdaq Composite. (=)
Risk Off
Despite the strength in the market, volume patterns, especially in the Nasdaq, are neutral or negative, failing to confirm the recent positive market move. (-)
Foreign equities across all other continents widely lagged the U.S. markets with many in bear phases. The worst relative performance of foreign equities to U.S. equities since before the 2008 financial crisis. (-)
Soft commodities closed at its highest level in over a decade, indicating inflationary pressure. (-)
Semiconductors are below their 6-month calendar range lows. (-)
Contrary to the Fed guidance, interest rates might be indicating that additional cuts may not be in the cards. (-)
Despite the rally, on an intermediate and longer-term basis, the number of stocks above some key moving averages remains flat to negative for the S&P. (-)
