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Both the S&P 500 and the Nasdaq continued their leadership this past week by hitting new all-time highs, while 'grandpa' Russell (IWM) continued to lag. Large-cap and FAANG stocks are masking poor market internals, yet overall good volume, record money inflows, and positive price action still play into the narrative.

Meanwhile, KRE (Regional Banks, a.k.a, the 'prodigy') had a monster performance on Friday, which could indicate that the recent rally in US long bonds is over and higher rates are on the way, which could derail the current rally.

This Week’s Highlights

• Risk Gauges remain risk-on.
• There were significant improvements in volume patterns across all four key indices, with a combined 12 accumulation days vs. only six distribution days over the last two weeks.
• Small-caps were oversold in both price and momentum, so watch for the possibility of a continued mean reversion.
• The Dow Jones is showing signs of a potential death-cross on Real Motion.
• Over the last five-day trading period, the IWM was the only major index to have a negative performance.
• The McClellan Oscillator on the SPY continues to lag price movement, although it has been bouncing from moderately oversold levels from earlier in the week.
• The 52-week new high-new low ratio has been deteriorating, failing to confirm new highs.
• High Yield Debt (HYG) continued to lag vs. Treasuries (TLT), a risk-off indication.
• Treasuries nonetheless failed to reach the 200-dma.
• The Yield Curve continues to flatten.
• Value (VTV) continues to lag Growth (VUG), which is bullish
• This week’s strongest sector was Real Estate (IYR), which was up 3%, followed by Technology (XLK) with a 2.2% gain.
• Even with ongoing infrastructure talks, Transportation (IYT) was still down over the last week, once again giving a mixed picture.
• Gold (GLD) recovered by 1.81% on the week, improving from a bearish phase to a distribution phase.
• Despite Friday’s bounce, Asian markets have been under quite a bit of pressure over the last three to six months, mainly in China (FXI), Thailand (THD), and Korea (EWY).
• The Australian and Japanese currency cross (AUD/JPY) is indicating risk-off for equities.

This Week in Crypto

• Bitcoin (BITCOMP) is looking to have a new six-month calendar range set on July 14, which is expected to be inside the previous six-month range that held support at $27,678 and resistance at $41,986. Watch for an explosive breakout from this tighter range.
• Ethereum (ETH-X) is expected to have its new six-month range take a step up from the previous six-month range that held support at $1,199 and resistance at $1,630, showing a sign of strength compared to the new setup of Bitcoin.
• Neither Bitcoin nor Ethereum violated their previous six-month support levels throughout the entire first half of the year.
• Looking at Ethereum Price action, Real Motion, the 200-dma, and the six-month calendar range high, all of these converged and offered tremendous support at the $1,630 level in mid- to late-June.

What does this all mean? The two leaders of the crypto market (Bitcoin & Ethereum) have respected technical analysis since the beginning of the most recent bull market and look to continue to do so.