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Due to travel, there will not be the usual expanded market commentary this week. For now, here is a quick look at the state of things.

Every week, we review the big picture of the market's technical condition as seen through the lens of our data charts. The bullets below provide a quick summary organized by conditions we see as being risk-on, risk-off, or neutral.

Summary

The S&P 500 and the Nasdaq hurdled over their 200-day moving averages, reclaiming positive territory on the year, backed by strong internals and improving economic sentiment. Moody’s downgraded the U.S. credit rating on Friday, which could have reverberations in the market next week.

Risk-On

• The major indexes were up between 3%-7%, with 3 of the 4 back to positive territory and conditions still not showing overbought signs.
• Volume patterns were strong, confirming the recent market price action.
• All sectors were up on the week, with the exception of gold miners. Semiconductors led, up over +10% along with retail and transportation.
• Risk-off plays like gold and gold miners were down on the week, which seemed to be a significant divergence from the indexes.
• The cumulative advance-decline confirmed price action. The McClellan Oscilator has been showing some divergence from its mid-April peak, which should be watched closely.
• The 52-week new high/new low ratio continued to improve, with everything stacked, sloped, and with seemingly more upside found above.
• The moving average of the number of stocks above key moving averages looks bullish, and it has recorded some of the most extreme levels of participation we have seen in years.
• Risk gauges have continued to signal fully risk-on sentiment.
• Growth stocks continued to lead on both a short- and longer-term basis.
• Retail saw a big improvement over the week, and it has been outperforming the SPY. Meanwhile, the biotech space continued to be weighed down, possibly over political considerations.
• Foreign equities have still been acting strong, though the U.S. benchmark regained leadership on a short-term basis.
• Bitcoin has been compressed in a tight range over the last two weeks. Though, it looks like it could still break out to new highs, assuming it can hold its 10-day moving average.
• This period tends to see strong market action on a seasonal basis, especially semiconductors.
• Soft commodities, copper, and gold all lost leadership due to inflationary pressures abating in recent days.

Neutral

• The VIX has hit bullish levels with volatility coming down, though short-term futures have remained elevated.
• Gold backed off of its recent highs, though the trend has remained intact and the yellow metal may have found some support at its 50-day moving average.
• Rates maintained their recent trading range. It is yet to be seen how the Fed may respond to some easing of inflationary pressures.

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