Key Points

  • The Global Dow Traded to a New High Last Week, Will the Relative Trend Turn?
  • Commodities Continue to Move Beyond the 2016 Highs
  • U.S. Equities Maintain Their Long-Term Uptrend
  • The 10-Year Yield Remains in a Consolidation
  • Will the Dollar Hold Support?

U.S. Equities

For the S&P 500, the 10-week moving average continues to act as a rising, short-term, support level within the context of a larger bullish trend. Price-based support is in the area of the May lows, near 4,100. Below that, the rising 40-week moving, currently near 3,800, would become a key level to watch. Momentum is bullish, with the 14-week RSI on the verge of crossing above 70 once again.

The S&P Small Cap 600 Index is trading toward the top of the range that has been in place since the middle of March. The 10-week moving average continues to act as important, near-term, support and is beginning to move higher. Price-based support moves up to the 1,250 – 1,300 range, while stronger support is around the 2018 highs, near 1,100. The 14-week RSI is also on the cusp of crossing above the 70 level, a signal that momentum remains to the upside.

Relative to the S&P 500, Small Caps are holding near-term support but remain below important resistance.

Within the Small Cap universe, Energy was the standout, trading to a new high last week and adding more than 12%. The defensive Utilities and Staples were also top Small Cap performers on the week, with the latter trading to a new high. Financials round out the top four Small Cap sectors on the week, though the group remains in a consolidation.

The NASDAQ Composite Index is fighting to regain the 10-week moving average as the index trades above the support range that we have been highlighting, in the 12,000 – 12,400 range. The 14-week RSI is making a series of lower lows and lower highs, as bullish momentum has been waning since the start of the year.

On a relative basis, the NASDAQ is fighting to hold support but remains in a near-term downtrend.

U.S. Fixed Income

The 10-year yield continues to dance with the 50-day moving average, below important resistance in the 1.90% – 2.00% range. The 14-day RSI is in a bullish regime, after holding the support level that we identified two weeks ago.

A break of resistance would likely point to a continuation of the reflation theme in the equity market, while a move lower in rates would be a sign of risk aversion on the part of investors.

Across the treasury curve there is not much that has changed. The short end remains pinned to the floor. At the long end of the curve, rates have come in but are testing/holding support.

Global Equities

The Dow Jones Global World Stock Index (excluding U.S.) closed the week above the rising 10-week moving average and at a new high. The 14-week RSI is not yet overbought but is in the process of breaking the short-term downtrend that we called out two weeks ago.

While we have been and remain on watch for a shift in the relative trend, the turn appears to be slow. The Global Dow is building a base vs. the S&P 500 but we are not yet able to call a new bullish trend.


The Bloomberg Commodity Index has moved up and out the consolidation zone that has been in place since 2016. The index is above the rising 10-week moving average and momentum confirms the bullish trend, with the 14-week RSI remaining in an overbought position.

Within the complex, Precious Metals are stalling after a strong move to the upside over the past few weeks. Industrial Metals continue their consolidation near the 2011 highs. Agriculture remains in an uptrend. Energy was the standout last week, breaking above near-term resistance. The bullish commodities theme is one that appears poised to persist.

The U.S. Dollar

U.S. Dollar Index remains under pressure and below the declining 10-week moving average. The index is above important support at the 2018 and 2021 lows, and we note that the RSI has failed to become oversold since testing the 30-level last August. This is a sign that downside momentum may be waning. The dollar has been weak as equities have been strong since the March 2020 lows. A reversal for the greenback would be meaningful in our view. At the same time, a breakdown would add a tailwind to the bullish commodity trend.


Equity trends remain to the upside in the U.S., but the more interesting dynamic is the fact that the Global Dow closed last week at a new high. Will this lead to outperformance on the part of global equities? Thus far, that trend has been elusive. Away from equities, strength in commodities continues to broaden, with Energy breaking above near-term support last week. While there is scope for commodity strength to continue, a breakdown in the U.S. Dollar would add a strong tailwind.
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