Equities in the U.S. pushed higher again last week, bringing the averages close to important levels on the upside. The bullish case becomes incrementally stronger should these levels be broken. For the S&P 500 and the NASDAQ 100, the key level to watch is the 40-week moving average. A move above these measures of a long-term trend points to the bulls regaining control. Treasuries yields remain in secular uptrends with key curves still inverted. Commodities are reasserting a bullish short-term trend within a larger secular uptrend. The dollar remains a key risk proxy in our view.

U.S. Equities

The S&P 500 closed the week near the top of the weekly range and within striking distance of the declining 40-week moving average. The rising 10-week moving average has moved above price-based support, providing a level that can be used for risk management should recent strength prove to be nothing more than a bear market rally. A close above the 40-week could open the door for a run to the November highs. Bulls want to see the 14-week RSI move above 60 and even become overbought to indicate that momentum has shifted in favor of the bulls.

The S&P Small Cap 600 Index rallied through the 40-week moving average, above price-based support, and the 10-week moving average. The index must now contend with the range that was in place for much of 2021 as the 14-week RSI attempts to break from a bearish regime. Above the 1,200 level, the benefit of the doubt is with the bulls.

The relative trend remains neutral, below price-based resistance.

The NASDAQ 100 closed higher for a fourth consecutive week to bring the 40-week moving average into range. The rising 10-week moving average enters the week above price-based support near 12,000. A break above the 40-week opens the door to further upside. A move below 12,000 puts the bears back in control.

The relative trend is testing resistance. Breaking higher from current levels could set the stage for further outperformance.

U.S. Fixed Income

The 10-Year Note came under pressure for a second week in a row but remains above the flat 10-week moving average. Support at the 2018 lows remained a key level for the bulls to hold during the current base-building process. Breaking above the 40-week moving average would be a sign that a new uptrend is taking hold.

The yield remains below resistance near 3.20%.

The move higher in rates last week was most pronounced at the long end of the curve. While nothing has changed in the larger trends, which remain to the upside, last week’s action helped to alleviate some of the flatness that we have been highlighting across the yield curve.

Three of the four yield curves that we track remain inverted despite some steepening last week.

Global Equities

The Global Dow did not sit out last week’s rally as the index moved further beyond the 10-week moving average. There is still resistance to overcome at the 40-week moving average and the 2021/2022 consolidation zone before we can state that the trend has become bullish.

The relative trend remains weak, trading near two-year lows vs. the S&P 500.


The Bloomberg Commodity Index has regained the 10-week moving average after holding support at the rising 40-week moving average. Last week’s strength helps to improve the short-term picture while the bullish secular trend remains in place. 

The 14-week RSI is holding in a bullish regime after testing the lower bound of this regime near 40.

Within the commodity complex, the metals continued to rebound from support. Agriculture joined that theme as well, moving higher after testing a key short-term support level. Energy remains in a consolidation zone while maintaining its bullish long-term trend.

U.S. Dollar

The U.S. Dollar Index remains a key risk proxy in our view. The rally in equities has played out as the dollar has retreated from the early July peak. Continued weakness, especially a break below the 103 level would likely serve as an added boost to risk assets.

Disclosure: This information is prepared for general information only and should not be considered as individual investment advice nor as a solicitation to buy or offer to sell any securities. This material does not constitute any representation as to the suitability or appropriateness of any investment advisory program or security. Please visit our FULL DISCLOSURE page.