Key Points

  • The S&P 500 Closes Lower for the Ninth Time in 10 Weeks
  • Small Caps Outperform…Again
  • Global Stocks Hold Up Better Than Domestic
  • Ten-Year Note Breaks to the Downside
  • Commodities Continue to Trend Higher

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U.S. Equities

The S&P 500 has now closed lower in the nine of the past 10 weeks. Last week saw a rejection at the declining 10-week moving average, which is below the declining 40-week moving average. Momentum is in a bearish regime, confirming the price action. The bears remain in control of the trend, and there are increased prospects that the 3,400 – 3,500 zone will be tested.

The S&P Small Cap 600 was certainly not immune to the selling pressure that gripped markets last week. The index closed lower after failing to hold above the declining 10-week moving average. This drama plays out below the declining 40-week moving average. The 14-week RSI has moved back below the 40-level as the indicator shifts to a bearish regime.

While there is no doubt that the price trend is bearish, we continue to note that it has been less bearish than the S&P 500. The relative ratio is moving higher with eyes for the October/November peaks. Breaking that mark sets the stage for further outperformance.

The NASDAQ 100 Index maintains its bearish trend, below resistance and the declining 10 and 40-week moving averages. Momentum confirms the bearish, trend with the 14-week RSI continuing to make lower highs as it moves into a bearish regime.

The relative trend also remains bearish as the ratio trades below broken support and has been making lower highs since the November peak.

U.S. Fixed Income

The 10-Year Note remains under pressure, breaking below the 2018 lows after failing at the declining 10-week moving average, which is well below the 40-week moving average.

The yield is knocking on the door of a breakout in the near term.

Global Equities

Despite weakness last week, the Global Dow is holding above support at 3,600 while trading below the 10 and 40-week moving averages. Should 3,600 give way, the pre-COVID highs are likely in play. The 14-week RSI is breaking below 40, a bearish data point for the price trend.

The relative trend remains below resistance, but a breakout is still a threat. Should one take place, the stage could be set for further outperformance.


The Bloomberg Commodity Index remains in an uptrend, above the rising 10 and 40-week moving averages. A break above the 140 level could be a signal that the next leg of the bullish cycle is beginning.

The 14-week RSI is in an overbought position, confirming the bullish price action.


The bears keep the pressure on both the equity and treasury market, perpetuating the trends that have been in place for much of the year. Cycle lows are now at risk in the equity market and are being broken in the fixed income space. Commodities remain the only port in the storm, continuing a trend that we have been highlighting on these pages for months.
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