Weekly Intermarket Report
Intermarket regime, week-on-week performance, breadth and relative rotations. The underlying backdrop remains expansionary, but the tactical correction has extended and short-term participation has narrowed sharply.
Long-term structure holds; short-term participation fades
Intermarket thesis: the market is transitioning from a broad risk-on environment to a regime that remains constructive yet tactically defensive. The correction has produced no credit stress nor a curve breakdown, but has hit technology, Asia and emerging markets hardest. Commodities and defensive sectors are absorbing part of the rotation.
What has changed since Week 28
- Risk Appetite from 74 to 68: still Greed, but with less euphoria.
- WPI Long Term from 73% to 70%; WPI Short Term from 53% to 39%.
- SPY moves from +1,37% to −1,54% on a weekly basis; Nasdaq down 4,16%.
- DBC accelerates from +3,58% to +5,31% on a weekly basis.
What has not changed
- Business Cycle Clock still in Expansion.
- Canary System still in Caution.
- High yield credit still risk-on relative to investment grade and duration.
- Bond prices weak and Treasury yields in Strong territory.
| Indicator | Week 28 | Week 29 | Reading |
|---|---|---|---|
| Risk Appetite | 74 | 68 | Less extreme Greed; moderation, not reversal. |
| WPI Long Term | 73% · 12/19 Q1 | 70% · 11/19 Q1 | Structure still positive, but marginally less broad. |
| WPI Short Term | 53% · 9/19 Q1 | 39% · 6/19 Q1 | Clear tactical deterioration and increased selectivity. |
| S&P 500 Breadth | 67,3% / 67,1% | 65,7% / 63,9% | LT resilient; 50-day participation declining. |
| Advance/Decline | 2,18 | 0,41 | Broad-based selling in the session recorded. |
| New Highs / New Lows | 43 / 6 | 48 / 5 | Daily weakness has not yet translated into structural deterioration. |
Expansion confirmed, but with protective signals still active
The Market Regime remains formally risk-supportive. Risk Appetite slips to 68 but stays in Greed territory; the cycle remains in Expansion. The Canary System, however, continues to signal Caution: the market is not in a fully risk-on condition and demands selectivity.
Murphy's 4 Pillars: equities in correction, commodities accelerating
Stocks — positive trend, negative week
SPY remains above the 50- and 200-day moving averages and retains a three-month return of +9,39%. The −1,54% weekly decline should be read as a pullback within a still-positive trend, although internal quality has deteriorated.
Bonds — no true reversal
TLT recovers just +0,06% over the week but remains below both moving averages and is down −2,28% over three months. The ongoing curve normalisation continues to reflect elevated yields, not a durable return to duration.
Commodities — weekly leadership
DBC rises +5,31% and turns positive over three months. The move represents the most significant intermarket development of the week, even as performance remains uneven across energy, agricultural products, soft commodities and metals.
US Dollar — Pause, Not Weakness
UUP gives up −0,21% on the week, but remains above the 50MA and 200MA, with +1,00% over one month and +3,24% over three months. The dollar retains its structural leadership.
The correction hits technology, Asia and emerging markets
The week-on-week reading shifts markedly. Week 28 had shown recoveries in Asia and the Nasdaq; in Week 29, the same clusters become the epicentre of weakness. Dispersion remains elevated: China and the FTSE 100 hold firm, while the KOSPI, EEM, Nikkei and Nasdaq retreat sharply.
| Area / Index | 1 week | Broader horizon | Reading |
|---|---|---|---|
| KOSPI | −11,43% | +17.16% 3M · +67.19% YTD | Violent weekly correction within an exceptional long-term performance. |
| Emerging Markets | −5,40% | +4.99% 3M · +15.68% YTD | Broad retracement; a strong dollar and Asian fragility return to centre stage. |
| Nikkei 225 | −4,29% | +2.68% 3M · +12.08% YTD | Tactical weakness, but medium-term trend still positive. |
| Nasdaq 100 | −4,16% | +13.79% 3M · +12.25% YTD | Tactical de-rating of growth; the primary drag on US equity. |
| CSI 300 | +1,94% | −5.85% 3M · −10.86% YTD | Relative weekly strength, but underlying structure still weak. |
| FTSE 100 | +0,73% | +6.73% YTD | Defensive resilience and relative independence from the tech correction. |
Structure remains positive, but the short term enters Weak territory
The 200-day breadth remains above 65%, while the 50-day breadth falls to 63.9%. The most significant deterioration comes from the WPI Short Term, which has moved to 39% with just 6 out of 19 instruments in Q1.
Stable leadership
Financials 81% / 87%, healthcare 68% / 82% and real estate 71% / 74% maintain the most robust combination of structure and tactical positioning.
Defensive rotation
Consumer staples rises to 73% above the 50DMA. Utilities remain strong over the long term, although cooling from a tactical standpoint.
Growth deterioration
Technology falls to 54% / 42%; communication services remains at 46% / 38%; consumer cyclicals is at 46% / 48%.
Commodities and defensives absorb the growth slowdown
Commodities
DBC improves both in performance and in its WPI reading: it remains bullish in the Long Term and moves to Improving in the short term. DBA remains the most solid component. GLD and SLV, by contrast, are in Q3 on the Short Term.
US Sectors
The internal rotation is clear: financials, healthcare, industrials, staples and real estate remain in the strong zones. SOX and XLK move into Weakening; XLY and XLC remain weak. XLE improves tactically following the weakness seen in Week 28.
FX and Yields
The dollar's weekly pause does not alter the currency regime. On the fixed income side, the persistence of yield strength continues to prevent a genuine recovery in bond prices.
Fragmented leadership, with Asia and emerging markets under pressure
Europe
Leadership remains selective and does not align with the DAX. Denmark, Poland, Ireland, Spain and Switzerland show greater relative strength; Germany and parts of Northern Europe remain more fragile.
Asia
The region loses the weekly leadership observed in Week 28. Korea, Japan and Taiwan move to the centre of the correction; Singapore maintains a relatively stronger position.
Americas and EM
Canada and the United States retain a more solid structure. The deterioration of EEM and several Latin American markets confirms the emerging-market bloc's sensitivity to the dollar and risk appetite.
The correction is tactical, but internal divergence is widening
Prevailing causal chain
- Strong yields → pressure on duration and growth multiples.
- Nasdaq and semiconductors weak → reduction of US leadership.
- Structurally strong dollar → headwind for Asia and emerging markets.
- Commodities recovering → relative support for energy, materials and inflation-sensitive segments.
- Stable credit → absence, for now, of systemic stress.
Divergences to monitor
- SPY near highs, WPI Short Term at 39%.
- A/D negative, but new highs still markedly outnumbering new lows.
- Normal curve, but bond prices still bearish.
- Risk Appetite in Greed, Canary still in Caution.
- Equity LT positive, but technology and Asia in sharp tactical deterioration.
Base scenario and control thresholds
Stabilisation confirmations
- WPI Short Term recovers above 50%.
- Advance/Decline returns sustainably above 1.
- Nasdaq and SOX exit Weakening.
- 50-day breadth returns above 65–70%.
- Treasury yields reduce their relative strength.
- The commodities recovery broadens beyond DBA and softs.
Deterioration signals
- WPI Long Term below 65%.
- 200-day breadth below 60%.
- Persistent increase in new lows.
- Deterioration of HYG/LQD and HYG/TLT.
- Further simultaneous acceleration of the dollar and yields.
- Loss of strength in financials, healthcare and real estate.