Key Points

  • The S&P 500 Closes Lower for the Eighth Time in Nine Weeks
  • Small Caps Outperform, Keep the Title of “Least Bad”
  • Global Stocks Remain on Our Radar as a Possible Leader
  • Ten-Year Note Fades from Moving Average Resistance
  • Commodities Eye the Next Leg of the Uptrend

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U.S. Equities

The S&P 500 closed lower last week and remained below resistance near the 4,200 level. The index is still below the declining 10 and 40-week moving averages, with the former in line with price-based resistance. The 14-week RSI continues to make lower highs and trade in a bearish regime.

The S&P Small Cap 600 has moved through price-based resistance to test the declining 10-week moving average. This action plays out below the declining 40-week moving average. The 14-week RSI remains in a bearish regime.

We have been noting for the past few weeks that small caps have been resilient on a relative basis, and that remains the case this week. The ratio moved higher once again. A break of the October/November peaks could set the stage for further outperformance.

The NASDAQ 100 Index maintains its bearish trend, below resistance and the declining 10 and 40-week moving averages. Momentum confirms the bearish trend, with the 14-week RSI continuing to make lower highs.

The relative trend also remains bearish as the ratio trades below broken support and has been making lower highs since the November peak.

U.S. Fixed Income

After a short-term rally from the 2018 lows, the 10-Year Note has come under renewed pressure. The Note has met resistance at the declining 10-week moving average, which is below the declining 40-week moving average. A break of the $118 level could set the stage for further downside.

The yield moved higher last week but still has resistance to overcome near the 3.20% level.

Global Equities

The Global Dow has established support near the 3,600 level but remains below the declining 10 and 40-week moving averages. During the most recent low, the 14-week RSI did not reach an oversold position, but we note that the indicator is still in a bearish regime.  

The relative trend remains below resistance, but a breakout is still a threat. If it does take place, the stage could be set for further outperformance.


The Bloomberg Commodity Index remains in an uptrend, above the rising 10 and 40-week moving averages. The 10-week moving average continues to define the near-term trend. A break above the 1140 level could be a signal that the next leg of the bullish cycle is beginning.

The 14-week RSI is in an overbought position, confirming the bullish price action.


The bears remain in control of the absolute trends across the U.S. equity markets. There are clearly defined resistance levels, prices, and/or moving averages that must be overcome before a bullish case can be made. Under the surface, Small Caps continue to outperform while the NASDAQ 100 remains a laggard. Away from equities, Commodities remain the best game in town, while the 10-Year Note is beginning to fade after a counter-trend rally.
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