Key Points

U.S. Equities put in another strong week with the S&P 500 and the Nasdaq 100 closing at record highs. Small caps continue to consolidate but Utilities are a standout in the group. Rates at the long end of the Treasury curve are stalling at resistance. A second week of dollar weakness supports commodities; precious metals are rebounding from support.

U.S. Equities

The S&P 500 added 1.37% on the week, closing at a record high once again. The index has now traded to the 4,150 level that we had seen as an upside possibility. The move comes with a momentum confirmation as the 14-period RSI is now overbought, above the 70 mark.

In the near-term support comes into play near the 4,000 level. Stronger support for the uptrend from the 2020 low is near 3,700.

The S&P Small Cap 600 Index remains in a consolidation on an absolute basis as it works off the overbought condition that was reached with the strong rally into the beginning of the new year. The 14-period RSI has moved back below the 70 level for now. The consolidation has given us a near-term support range of 1,200 – 1,250. More important support is at 1,100 which is the breakout point above the 2018 highs.

On a relative basis, small caps were a slight underperformer, moving higher by 1.00% on the week. Since starting a strong rally in the fall of last year relative to the S&P 500, small caps have stalled at resistance near a prior consolidation zone.  

At the sector level within the small cap universe, Utilities, Staples, Health Care and Materials were the top performers on the week. Utilities traded to the new high, to stand out amongst a group that trades in a consolidation (much like the index itself). The charts of Staples, Health Care and Materials all provide an example of the trading dynamic that has played out in small caps over the past four to six weeks, a pause below record highs.

The Nasdaq Composite Index also lagged the S&P 500 on the week, rising by 1.09%. The index continues to trade in a consolidation above near-term support at the 12,000 level and the RSI is in a bullish regime, after becoming overbought at the start of the year. The index is on the verge of breaking to new highs and closed near the top of its weekly range on Friday.

On a relative basis, the Nasdaq is holding support at the July / August highs.  

While the broader Nasdaq index is fighting to reach a new high, the Nasdaq 100 Index achieved that goal last week. The index also closed at the top of its weekly range as investors showed a willingness to own the group into the weekend. The 14-period RSI continues to trade in a bullish regime, signaling that there is upside momentum to the move higher in price and we note that there is room before reaching overbought levels.

Relative to the S&P 500, the group has found and held near-term support.

Last week we noted that large cap growth stocks appeared to be finding their footing after a pause within their respective uptrends. The breakout in the Nasdaq 100 Index supports this view and we now look for signs that they will retake a leadership position within the equity market.

U.S. Fixed Income

The 10-year yield remains below resistance at the 2019 consolidation zone after the 14-period RSI became extremely overbought in late-February.

The stalling activity in growth stocks that we have seen for much of 2021 has coincided with a rapid rise in the 10-year yield. As rates stabilize, there is reason to believe that growth stocks can continue to advance.

Looking across the Treasury curve, we can see that the short end remains anchored near the lows. The 5-year has room before it reaches resistance near 1.40%. Further out, the 20-year and the 30-year have joined the 10-year in stalling at their respective resistance points.

Global Equities

The Dow Jones Global World Stock Index (Excluding U.S.) traded higher last week and, like its U.S. counterparts, finished Friday near the top of its weekly range. The 14-period RSI is in bullish ranges, confirming the trend, and has room before reaching an overbought condition.

Relative performance continues to be the biggest concern for global equities. There is reason to believe that international stocks are trying to build a base after a pronounced relative downtrend, but a breakout and confirmed change of trend remains elusive.


The Bloomberg Commodity Index continues to consolidate below resistance despite a strong performance last week, which took the group back to an overbought level based on the 14-period RSI. A break up, and out, of this consolidation would be a signal that a new, bullish commodity cycle is under way.

If a new cycle were to take hold, the question of performance relative to equities would have to enter the conversation. Thus far, there is not much to discuss as commodities remain an underperformer relative to equities.  

Much of the focus in the commodities complex has turned to the precious metals, in particular gold, last week. The Dow Jones Indices Precious Metals Index has been fading since August, but the move lower stopped at support near the peaks from 2014, 2016, and 2020. During the pullback, the 14-period RSI failed to become oversold, signaling that this may only be a pause within a larger uptrend.

Relative to the Bloomberg Commodity Index, precious metals have held support and are beginning to turn higher.

The U.S. Dollar

The U.S. Dollar Index was under pressure for a second consecutive week, as it continues to fade below resistance. The 14-period RSI is moving lower after failing to exit a bearish regime while the dollar had been strong to start the year. Continued weakness on the part of the dollar would likely serve as a tailwind to the commodity complex as well as for certain international equities such as emerging markets.


A record high for the S&P 500 continues to support the bullish equity trend, while a breakout for the Nasdaq 100 Index begins to confirm that large cap growth stocks have regained their footing after a consolidation. Stabilization in rates at the long end of the curve is another datapoint that is supportive of growth stocks. Weakness in the U.S. Dollar leads to a strong week for commodities, but will they breakout?
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