We have been highlighting incrementally bullish trends for equities over the past few weeks. However, those trends failed a key test last week as the bears stepped up in a big way. Major U.S. equity averages failed to get/hold above their 40-week moving averages as the U.S. Dollar Index saw renewed strength. Treasuries remain under pressure, and a key measure of the broader bond market remains below an important resistance level. Commodities appear to be reasserting their bullish trend even as the dollar moves higher.  

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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 a 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.

Uptrends remain in place for rates across the yield curve, with last week’s upside most pronounced at the long end. Both the 20-year and the 30-year have held short-term support levels to keep the prospect of a higher high in play.

As we discussed in our note on Friday, it may be too soon to call the peak in yields. A key broad measure of the bond market, the iShares Core U.S. Aggregate Bond ETF (AGG) continues to trade below an important resistance level. Last week saw the fund close below the 10-week moving average, below the steadily declining 40-week moving average.

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.

Across the commodity landscape, the support levels that we have been highlighting for Precious Metals, Industrial Metals, and Agriculture continue to hold. The Energy patch remains in  consolidation, continuing to digest the large move from the 2020 low. Given its weight in the index, Energy is a key driver for the overall commodity complex.

U.S. Dollar

We have been highlighting the U.S. Dollar Index as a key proxy for risk appetite in the market. We have called out the 103 level as important. Above that mark points to risk aversion. While equity bulls saw a glimmer of hope as the index retreated from recent highs, that light was dimmed last week as the index made a strong rebound. The 10-week moving average has defined the trend, and it is well above the rising 40-week moving average.

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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.