The pressure on the bulls continues to mount across asset classes. In the U.S. equity market, all eyes will be on the June lows. Should they be broken, odds favor a trip to the levels that were seen prior to the COVID crash. The 10-Year Note remains under pressure, trading to a new low for the current cycle. Finally, Commodities are on the verge of testing a key support zone that the bulls must defend. All in all, it’s hard to make a bullish case on risk assets with trends clearly moving in the bearish direction.

U.S. Equities

After losing support at 3,900, the S&P 500 closed lower again last week. While the index remains below the declining 10 and 40-week moving averages, all eyes will be on the June lows near 3,636. Should that level give way, odds favor a move down to the pre-COVID highs.

Momentum remains in a bearish regime, and the 14-week RSI is on the verge of pushing through the 40-level to the downside.

The S&P Small Cap 600 Index also came under intense pressure last week as it remains below the declining 10 and 40-week moving averages. There is now a scope for the pre-COVID levels to be reached in the near term. Momentum confirms the bearish price trend as the 14-week RSI continues to move lower and is now below 40.

The relative trend continues to move sideways; however as we noted in our work last Wednesday, there is a slight downside bias now in play. Until the October/November peak are broken, it is hard to make the case for sustained outperformance. 

The NASDAQ 100 Index moved lower last week and has now broken support at the 12,000 level. The index is below the 10 and 40-week moving averages, and investors will now have a close eye on the June lows. Should those give way, there is room to pre-COVID highs.

The relative trend continues to trade below resistance and is heading lower. Odds favor continued underperformance.

U.S. Fixed Income

The 10-Year Note closed lower once again last week, extending its bearish trend below the steadily declining 10 and 40-week moving averages. The Note is now well below the 2018 lows. While it is likely that there will be a rebound in the near term (nothing goes down in a straight line), it should be considered countertrend in nature.

The yield remains above support at the 3.20% level, increasing the odds of a move toward 4.00%.

Global Equities

The Global Dow was not immune to the selling pressure that gripped risk assets last week. The index has broken below support at 3,500 to test the levels seen prior to the COVID crash. The declining 10 and 40-week moving averages point to a bearish trend remaining in place. Momentum confirms the bearish price action as the 14-week RSI moves toward oversold levels.

The relative trend remains under pressure, near the late 2021 lows. There may be a base building, but more time is needed for a transition to take hold.


Last week, the Bloomberg Commodity Index closed lower again to remain below the 10 and 40-week moving averages. The support zone between 106 and 110 is now in play and remains a key level for the bulls to defend.

Momentum has also reached a key level as the 14-week RSI is testing 40 (the lower bound of a bullish regime). If commodity bulls are going to make a stand, now is the time.

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