High risk appetite, tight market: tech and Asia hold up as bonds and breadth deteriorate
The Risk Appetite Index stands at 69 in Greed territory, yet equity market breadth is narrowing and Treasuries are giving back 2.32% on the week: a selective risk-on environment that warrants close attention.
WEEKLY INTERMARKET REPORT W39 · 27 SEP – 3 OCT 2026 · DATA CUT 2 OCT 2026
DOMINA MARKET INTELLIGENCE · CROSS-ASSET
The cross-asset picture remains consistent with an expansionary phase, yet risk-on is selective. Credit and volatility show no signs of systemic stress; conversely, weak Treasuries, a strong dollar and narrowing equity participation point to tighter financial conditions and an increasingly concentrated leadership.
Author · Fabrizio Ravetto | Data cut 2 Oct 2026 | Week 39
Executive Summary
The week closes with a marked divergence between the index level and the market's internal structure. The Risk Appetite Index stands at 69, in Greed territory, and the Business Cycle Clock remains in Expansion, but the Canary System flags Caution due to the negative TIP component. On the intermarket front, SPY slips just 0.22% on a weekly basis while QQQ gains 0.68%; TLT loses 2.32%, UUP rises 0.94% and DBC retreats only 0.25% after a +20.52% three-month gain. The message is not one of risk aversion: VIX at 15.3, HYG/LQD and HYG/TLT remain classified as risk-on. The vulnerability lies instead in breadth: only 42.3% of S&P 500 constituents are trading above their 200-day moving average and 26.4% above their 50-day moving average, with 16 new highs against 52 new lows. The Long-Term VPI stands at 55, moderate, while the Short-Term VPI falls to 37, weak. Leadership is concentrated in semiconductors, technology and energy, with RSP in weak territory. Geographically, South Korea, Taiwan, Japan and Brazil maintain the best relative configuration, while Europe and China remain under pressure.
Market Regime · Risk Appetite 69 (Greed) · Business Cycle: Expansion · Canary System: Caution on TIP NEG, credit OK. · Click or tap the chart to enlarge.
1. Macro Asset Snapshot
EquitySelective
US equity and fixed income: key weekly data
SPY 769.6: -0.22% 1W but above both the 50DMA and 200DMA. QQQ +0.68% 1W; US breadth weak and leadership concentrated.
BondUnder Pressure
TLT 77.5: -2.32% 1W, -5.45% 1M and -9.33% 3M; below both the 50DMA and 200DMA. US yield curve normal but at higher levels relative to three months ago.
CommoditiesStrong but Dispersed
DBC 32.5: -0.25% 1W, +1.91% 1M, +20.52% 3M. Energy and softs strong; precious metals weak and industrial metals mixed.
USD / FXUSD Strong
UUP 28.9: +0.94% 1W and +2.56% 1M, above both the 50DMA and 200DMA. DXY remains in the Strong quadrant, with most major currencies in weak territory.
Murphy's 4 Pillars · rolling 60 days · data as of 2 October 2026. The combination of resilient equities / weak bonds / strong USD defines a risk-on environment that is more selective than expansionary.
2. Week-over-Week
Indicator
Previous
Current
Change
Trajectory
Interpretation
Risk Appetite Index
NOT AVAILABLE
69 · GREED
current reading
high / stable
Favourable sentiment, but insufficient to define a full risk-on environment.
SPY
NOT AVAILABLE
769,6
-0.22% 1W
slight pullback
Index resilient; internal structure weaker than the headline index level suggests.
QQQ
NOT AVAILABLE
749,6
+0.68% 1W
improving
Growth/tech leadership.
IWM
NOT AVAILABLE
281,5
-0.16% 1W
weak
Small caps do not fully confirm risk-on.
TLT
NOT AVAILABLE
77,5
-2.32% 1W
deteriorating
Pressure on Treasuries and duration.
DBC
NOT AVAILABLE
32,5
-0.25% 1W
pause
3M trend strong (+20.52%) but week nearly flat.
UUP / USD
NOT AVAILABLE
28,9
+0.94% 1W
strengthening
Tighter financial conditions.
S&P 500 >200DMA
NOT AVAILABLE
42,3%
n.a.
neutral / fragile
Just above the model's bearish reference threshold.
S&P 500 >50DMA
NOT AVAILABLE
26,4%
n.a.
weak
Short-term participation very limited.
VPI Long Term
NOT AVAILABLE
55 · MODERATE
n.a.
moderate
5/19 instruments bullish.
VPI Short Term
NOT AVAILABLE
37 · WEAK
n.a.
deteriorated
3/19 instruments bullish; divergence relative to SPY.
New 52W Highs – Lows
NOT AVAILABLE
16 – 52
-36
negative
The latest session posted a positive A/D reading but more new lows than new highs.
Euro Stoxx 50
NOT AVAILABLE
67,0
-2.45% 1W
deteriorating
Europe significantly weaker than the US/Asia.
KOSPI
NOT AVAILABLE
191,9
+2.51% 1W
strong
Asian leadership consistent with the semiconductor theme.
3. Global Indices
Performance 1D, 1W, 1M, 3M and YTD. Source: DOMINA Market Intelligence dashboard, data cut 2 October 2026.
Observed data. Geographic dispersion is pronounced: QQQ +0.68% 1W, KOSPI +2.51% and Nikkei +1.01%, while Euro Stoxx 50 -2.45%, DAX -2.27%, FTSE 100 -2.41% and CSI 300 -2.27%. Inference. Leadership remains anchored to markets and segments with the greatest exposure to technology/semiconductors; weakness in Europe and China prevents the move from being characterised as a global, synchronised risk-on environment.
4. Country Monitor
Global Country Monitor. Taiwan (EWT), South Korea (EWY), Brazil (EWZ) and Japan (EWJ) occupy the relative leadership area; most other markets remain weak or weakening.
Regional rotations
Americas · Brazil leading; SPY close to Strong; Canada, Mexico, Chile and Colombia weaker.
Europe · heterogeneous but predominantly Weak/Weakening structure; Turkey at the bottom, some peripheral markets more resilient.
Asia · Taiwan and South Korea leading; Japan strong; China, India and several ASEAN markets on the weak side.
Emerging / regional residual · UAE relatively strong but weakening; other markets predominantly weak.
Euro Stoxx 50 breadth: 51.1% above 200DMA, 31.9% above 50DMA; A/D 26/21; new highs–lows -3.
Cross-asset relative rotation: SPY and UUP constructive; BTC and DBC on the strong side; Treasuries and precious metals on the weak side.
Observed data. Relative strength is concentrated in Taiwan, South Korea, Brazil and Japan. Europe shows less deteriorated long-term breadth than the US (51.1% above 200DMA), yet only 31.9% of Euro Stoxx 50 constituents are above the 50DMA and the index loses 2.45% on the week. Inference. The global market is not rewarding generic cyclical beta: it is selecting specific geographies and supply chains, in particular Asian technology and Brazil.
5. USA Sector Rotation
US sector ETFs · RSP · SOX · Relative rotation: SOX and XLK leading; XLE remains strong; SPY is near the neutral line, RSP and most sectors are weak/weakening.
Observed data. SOX and XLK are clearly in the Strong quadrant; XLE maintains a favourable configuration. RSP remains on the weak side and, in the VPI Short Term, only XLK and XLE are bullish, while most sectors are bearish or weakening. Inference. The index rally is not supported by broad-based participation: the concentration of leadership is the primary vulnerability in the equity outlook.
6. US Yield Curve
US Treasury curve · 2Y–10Y spread +0.46% · 3M–10Y spread +1.07% · normal configuration. The current curve lies above that of three months ago across the entire term structure.
Node
Yield
WoW bp
Reading
2Y
NOT AVAILABLE
NOT AVAILABLE
The screen displays the node on the current curve but does not present a legible numerical value that can be reported without reconstruction.
5Y
NOT AVAILABLE
NOT AVAILABLE
As above; the current curve lies above that of three months ago.
10Y
NOT AVAILABLE
NOT AVAILABLE
Node used in spreads: 2Y–10Y = +0.46%; 3M–10Y = +1.07%.
30Y
NOT AVAILABLE
NOT AVAILABLE
Long end elevated relative to the three-month-ago curve; WoW change in basis points not disclosed.
The curve screen does not display the numerical yields for individual nodes or the week-over-week change in basis points. For methodological consistency, these are not reconstructed from the chart.
7. Breadth and VPI
S&P 500 breadth: 42.3% above 200DMA; 26.4% above 50DMA; A/D 287/209 = 1.37 in the latest session; 16 new highs versus 52 new lows.
US sector breadth. Technology 63% above 200DMA and 61% above 50DMA; energy 73%/41%; healthcare 65%/45%. Financials 32%/4%, Real Estate 16%/0%, Utilities 3%/3%.
VPI — Long Term 55% (5/19 bullish), Short Term 37% (3/19 bullish) and historical VPI + SPY. Source: DOMINA Market Intelligence dashboard.
VPI · LT and ST quadrant map
LT: XLK, XLV, XLE bullish; DBC and DBA bullish; bond ETFs bearish. ST: only XLK and XLE bullish among sectors, DBC bullish, all bond ETFs bearish.
Observed data. Short-term participation is weaker than structural participation: 26.4% of components above the 50-DMA versus 42.3% above the 200-DMA; ST BPI at 37 versus LT at 55. The Advance/Decline for the latest session is positive, but new lows exceed new highs by 36 units. Inference. There is still no evidence of systemic stress, but the divergence between the index and breadth is too wide to classify the regime as full risk-on.
8. FX
DXY in the Strong quadrant; major currencies remain predominantly weak, with the yen relatively more resilient.
Observed data. UUP gains 0.94% on the week and 2.56% on the month; DXY is in the Strong quadrant. Inference. A strong dollar tightens financial conditions and acts as a headwind for emerging markets and commodities; the concurrent strength of South Korea and Taiwan indicates, however, that the semiconductors theme is locally prevailing over the currency headwind.
9. Commodities
Commodity Aggregate · Overall Commodity GRID: pronounced internal dispersion; sugar and natural gas stand out, while precious metals and a portion of industrial metals remain weak.
Energy Index · Energy Index: several contracts remain in the Strong quadrant; natural gas is improving, while some refined products/crude grades are showing a loss of momentum.
Precious Metals · Precious Metals: gold, silver, platinum and palladium are in the Weak quadrant or at its threshold.
Industrial Metals · Industrial Metals: HRC is strong; copper is weakening around the neutral line; nickel, aluminium and tin remain weak.
Grains · Grains: several contracts are still Strong but with cooling trajectories; the corn/soy complex is softer.
Soft Commodities · Soft Commodities: sugar (SB) is the clear leader; cocoa is improving; coffee, cotton, orange juice and lumber remain weak.
Observed data. DBC is essentially flat on the week (-0.25%) but remains +20.52% over three months and above the 50-DMA/200-DMA. Strength is not uniform: energy and sugar maintain leadership, precious metals are weak, industrial metals are mixed and grains are losing momentum. Inference. The complex continues to transmit an inflationary/nominal component, but the aggregate should not be read as a single directional block.
10. Bonds and central banks
Bond GRID: ZT, ZF, ZN, TN and ZB remain in the Weak quadrant; some nodes show tentative improvement, but the relative structure remains negative.
VIX 15.3; HYG/LQD 0.7553; Put/Call 0.77; HYG/TLT 0.9926. Credit/volatility signals are classified as risk-on, while breadth is neutral.
Observed data. The bond market is the primary source of stress: TLT -2.32% 1W and -9.33% 3M, with all major Treasury futures in the Weak quadrant. The curve is normal, but has shifted upward relative to three months ago. The Canary System remains on Caution due to TIP NEG, while credit continues to be classified as OK/risk-on. Inference. As long as credit does not deteriorate, the bond sell-off signals primarily pressure from real/nominal rates and the cost of capital, not a funding crisis.
11. Crypto
Crypto GRID: several assets, including BTC, remain on the Strong/Improving side, but dispersion across tokens is elevated.
The crypto segment confirms the presence of risk appetite in certain speculative areas, but does not alter the central message: the structure of traditional markets remains conditioned by bond weakness and reduced breadth.
12. Transmission channels
DriverWeak Treasuries + strong USD
TransmissionHigher cost of capital and tighter financial conditions; pressure on duration and dollar-sensitive markets.
ImpactNarrower equity leadership: SOX/XLK/XLE support the index while RSP, breadth and numerous sectors remain weak.
Confirmation / riskCredit and VIX remain constructive. A deterioration in either would transform the current divergence from selectivity into a genuine risk-off.
13. Risks and catalysts
Risk / Catalyst
Transmission channel
Signal to monitor
Further Treasury sell-off
Higher rates → pressure on duration, multiples and rate-sensitive real assets
TLT; GRID ZT/ZF/ZN/TN/ZB; 2s10s and 3m10y slope.
US breadth narrowing further
Index supported by a handful of leaders → greater vulnerability to shocks in mega-caps/semis
% above 50DMA; ST VPI; new highs/lows; RSP.
Positive equity broadening
Rotation from SOX/XLK towards RSP and cyclical sectors → healthier risk-on
RSP moving towards Improving; rising %>50DMA; ST VPI above weak territory.
USD accelerating further
Financial tightening → pressure on EM and commodities
UUP/DXY; EEM performance; FX GRID.
Credit/volatility deteriorating
Transforms an orderly correction into a systemic stress signal
VIX; HYG/LQD; HYG/TLT; Put/Call.
Commodities remain strong over a 3M horizon
Inflation-sensitive → makes an easing of yields more difficult
DBC, Energy Index, sugar/NG and industrial metals rotation.
Asian tech leadership holds
Support for the semiconductors theme despite a strong USD
KOSPI, EWT/Taiwan, EWJ/Japan, SOX.
14. Focus for the following week
1) US Breadth. The priority is to determine whether the 26.4% above 50DMA and the ST VPI at 37 can recover without a correction in the index. 2) Bond market. Stabilisation of TLT and Treasury futures is necessary to relieve pressure on multiples; absent stabilisation, leadership could narrow further. 3) Dollar. DXY/UUP remains a tightening variable: further acceleration would increase headwinds for EM and commodities. 4) Sector rotation. The constructive signal would be a move by RSP and cyclical sectors from the Weak quadrant towards Improving; conversely, rising new lows and fading momentum in SOX/XLK would make the divergence more critical. 5) Geography. South Korea, Taiwan, Japan and Brazil remain the leaders to benchmark against European and Chinese weakness.
15. Sources
DOMINA Market Intelligence — Market Regime, screenshot 2026-10-04-11-16-34, data as of 2 October 2026: Risk Appetite, Business Cycle Clock, Canary System.
DOMINA Market Intelligence — Global Indices Performance, screenshot 2026-10-04-11-17-11.
DOMINA Market Intelligence — Market Breadth, screenshot 2026-10-04-11-17-24; Advance/Decline and New Highs–Lows, screenshot 2026-10-04-11-17-30; Sector Breadth, screenshot 2026-10-04-11-18-01.
DOMINA Market Intelligence — Euro Stoxx 50 Breadth, screenshot 2026-10-04-11-18-13; A/D and New Highs–Lows, screenshot 2026-10-04-11-18-20.
DOMINA Market Intelligence — VPI Breadth US Multi-asset, screenshot 2026-10-04-11-18-54; LT/ST quadrants, screenshots 2026-10-04-11-19-00 and 2026-10-04-11-19-07.
DOMINA Market Intelligence — GRID Rotation: cross-asset, FX, commodities aggregate, bonds, US sectors, country/global and regional, commodity subgroups, crypto; screenshot series 2026-10-04 11:33–11:40.
Report data cut-off: last available close, 2 October 2026. Screenshots were captured on 4 October. For indicators without a previously archived and comparable level under the new Week 39 convention (27 September–3 October), the WoW comparison relies exclusively on the 1W change displayed by the platform; prior levels are not reconstructed.
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