Risk On

• Risk gauges strengthened this week as the long bond got hit hard as did gold, while the S&P held up well on a relative basis. (+)
• Nasdaq and the S&P continue their leadership with both making new all-time highs on the week.
• The VIX continues to languish at fairly low levels. (+)
• The color charts which look at the % of stocks above key moving averages are showing a positive read on IWM overall, a positive divergence from price action …marginally bullish (+)

Neutral

• While the Nasdaq and the S&P continued their leadership this week, we saw a wide divergence in performance with the Dow down -1.7%  and Russells down -2.45%. The Russells usually have a strong seasonal pattern over the next several weeks. (=)
• Volume patterns were consistent with the price movements in the indexes, with five accumulation days for the Nasdaq and only one for Dow. (=)
• Growth continues to outperform value and the ratio is at historical highs, while value stocks are significantly lagging and trading in a warning phase. (=)
• The modern family is giving a very mixed read. Semiconductors regained it’s bull phase. Grandma Retail held at the upper end of its trading range. Transports fell into a warning phase. (=)
• Sloppy sideways action in gold, showing a significant loss in momentum. (=)
• The percentage of stocks over their key moving averages are all stacked and negatively sloped on the SPY and IWM  and on a short-term basis, looks oversold and ripe for a bounce in both the S&P and Russells. (=)

Risk Off

• Out of the 17 sectors we track, 15 were down, led by homebuilders, which got hit because of higher rates. (-)
• Commodity prices, especially energy, were all strong on the week (2-6%), indicating inflationary pressures. (-)
• Market internals for both the Nasdaq and S&P deteriorated and the cumulative advance decline line has also backed off significantly from recent highs even as the market sits just off recent all-time highs. (-)
• The 52-week new high new low ratio for both the S&P and Nasdaq composite flipped negative. (-)
• Soft commodities continue their accent, looking like it can still punch higher, adding to inflationary pressures, especially to the consumer. (-)
• Dr. Copper entered a bear phase and put in a new 60-day low. (-)
• The average of the percentage of stocks above key moving averages (color charts) across all indexes is overwhelmingly negative with the exception of the long-term view of the Nasdaq 100. (-)
• Interest rates on the longer-end of the yield curve got hit hard, considering strong underlying economic data and persistent inflation concerns. (-)
• Foreign equities continued to lag the U.S., and more established foreign equities (EFA) is entering into a bear phase. (-)