Key Points

  • The S&P 500 Closes Above the 10-Week Moving Average
  • Small Caps Rally, Still Have Work to Do
  • The NASDAQ 100 Breaks Resistance
  • The Ten-Year Note Continues to Hold the 2018 Lows
  • Commodities Remain in a Secular Uptrend

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U.S. Equities

The S&P 500 moved higher last week, reclaiming the 10-week moving average and the 3,900 level in the process. Above these two points, the countertrend rally to the declining 40-week moving average that we highlighted last week is still in play. The 14-week RSI has regained the 40-level and the declining trend line from the November highs.

Likewise, the S&P Small Cap 600 Index rallied through the 10-week moving average. The index still has work to do to clear resistance near 1,220 before an attack on the declining 40-week moving average can be contemplated. Momentum is improving, with the 14-week RSI regaining the 40 mark.

The relative trend continues to churn below resistance as it trades in a consolidation. The group remains an in-line performer for now.

The NASDAQ 100 completed the trifecta of strong performance for the major U.S. averages last week. The index has moved through the 10-week moving average and broken support, opening the door to a move toward the declining 40-week moving average. The 14-week RSI has moved above 40, a sign that momentum is improving for the index.

The relative trend continues to stabilize and will now need to break above resistance for us to begin to make a case for further outperformance.

U.S. Fixed Income

The 10-Year Note continues to hold support at the 2018 lows and the 10-week moving average. This base-building process is playing out below the declining 40-week moving average.

The yield is retreating from resistance near the 3.20% level. Until this level is broken, it is hard to make a case for a continued move higher in yields (lower in the price for the Note).

Global Equities

Even the beleaguered Global Dow managed to move higher last week. However, the index remains below the declining 10 and 40-week moving averages as well as resistance. On the most recent move lower, the 14-week RSI did not become oversold, but we note that it is still in a bearish regime.

The relative trend remains below resistance in a wide consolidation.


The Bloomberg Commodity Index broke a five-week losing streak last week and held the rising 40-week moving average in the process. At the same time, the index remains above important support at the 106 level. Retaking the 10-week moving average could open the door to a run to new highs. We continue to give the benefit of the doubt to the long-term trend if 106 holds.

The 14-week RSI is holding in a bullish regime as it tests the lower bound of this regime near 40.


Last week we noted that the door was open to a countertrend rally that could take the major averages through resistance. That scenario has begun to play out for the S&P 500 and the NASDAQ 100. The next major hurdle will be to clear the declining 40-week moving averages. The secular uptrend remains in place for commodities, and they did not sit out the rally in risk assets last week. They must now break above the 10-week moving average to have a chance at running to new highs. Finally, treasuries continue to build a base while holding support at the 2018 lows. Now the bulls want to see some follow-through on these moves this week.

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