Key Points

  • The S&P 500 Fails at the 40-Week Moving Average
  • Small Caps Fade After a Strong Move
  • The NASDAQ 100 Is Losing a Key Relative Battle for Now
  • The Ten-Year Note Is at Risk of Further Weakness
  • Commodities Continue to Reassert Their Bullish Trend

U.S. Equities

The S&P 500 closed lower on the week after failing to break through the 50-week moving average. Getting above this level is the key next step for equity bulls. Further weakness from current levels must hold the 10-week moving average. Below there, price-based support near 3,900 will likely be in play. Thus far, the 14-week RSI has not been able to break above 60, keeping it in a bearish regime. The bulls want to see a pullback hold the 40-level.

The S&P Small Cap 600 Index closed back below the 40-week moving average but above support and the 10-week moving average. The 14-week RSI remains in a bearish regime, unable to clear the 60-level on recent strength.

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

The NASDAQ 100 also closed lower on the week, remaining trapped between the 10 and 40-week moving averages. The 14-week RSI is still in a bearish regime, under the 60-level.

The relative trend is beginning to fade from resistance, potentially leaving another lower high on the chart. Until this level is overcome, odds favor continued underperformance.

U.S. Fixed Income

The 10-Year Note came under pressure for a third week to close below the 10-week moving average. This weakness brings the 2018 lows into play as a key support level once again. The declining 40-week moving average points to a long-term trend that is still bearish. 

The yield remains below resistance near 3.20%, but we are watching this level closely as a move above it points to further upside.

Global Equities

The Global Dow was not immune to last week’s selling pressure in equities. The index is holding above support and the 10-week moving average while trading below the declining 40-week moving average. At the same time, the 14-week RSI remains in a bearish regime. 

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


The Bloomberg Commodity Index held above the 10-week moving average as the 40-week moving average continued to rise. The index closed the week near the top of its range to keep the March and June highs in play.   

The 14-week RSI remains in a bullish regime after holding support at the 40-level.


While equity trends had been becoming incrementally bullish heading into last week, they were not able to clear key resistance last week. This rejection leaves equities at risk of a pullback to important support levels. Until upside levels are breached, it is difficult to argue for becoming more bullish. At the same time, holding above support makes the bear case hard to make as well. Treasuries will face a key test this week; a break below the 2018 low points to further downside in price (upside in rates). Commodities continue to reassert their bullish trend.

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