The correction is over. For the first time since the selloff began, all three timeframes — short-term, medium-term, and long-term — are in RISK ON simultaneously. The composite has surged to +50, a dramatic move from +6 just yesterday. SPY has rallied to $676.01, the RSI has recovered to 59, and 77% of stocks are now above their 20-day moving averages. The medium-term, which was stuck at -58 RISK OFF yesterday, has flipped to +42 RISK ON — a move of 100 points that reflects the explosive breadth expansion now underway. The 50-day breadth has jumped from 33% to 48%, and SPY has reclaimed its 50-day moving average. The 200-day breadth has expanded to 53% with SPY above its 200-day MA.

Sector Leadership

5 sectors now RISK ON, Financials exits RISK OFF — only Consumer Discretionary remains:

💡 What We’re Watching

• All three timeframes flip to RISK ON simultaneously — This is the clearest signal the correction is behind us. The medium-term made a historic move from -58 RISK OFF to +42 RISK ON in a single session, driven by 50-day breadth jumping from 33% to 48% and SPY reclaiming its 50-day moving average. When all three timeframes align in RISK ON, it historically marks the beginning of a sustained advance.
• Financials exits RISK OFF — only Consumer Discretionary remains — With Financials transitioning to CHOP at -1, only one sector remains in RISK OFF. The RISK OFF count has gone from 6 at the correction low to 1 today. Financials’ short-term at +95 is the strongest short-term reading of any sector, suggesting momentum could carry it into positive CHOP or RISK ON territory soon.
• Breadth expansion is broad and decisive — 77% above the 20-day, 48% above the 50-day, and 53% above the 200-day. All three breadth measures are at their highest levels since the correction began. Both SPY and IWM are above their 20-day, 50-day, and 200-day moving averages — confirming the rally across large and small caps alike.
• Consumer Discretionary improves but remains the lone holdout — After dropping to -78 yesterday, Consumer Discretionary has bounced to -37. The short-term has recovered to +35, but the medium-term at -70 and long-term at -40 still reflect significant structural damage. This sector’s full recovery will take longer than the rest of the market.

The Bottom Line

The market has spoken. All three timeframes in RISK ON, 5 sectors in RISK ON, breadth expanding across every measure, volatility normalizing — the evidence is as clear as it gets. The correction that began in mid-March, took the RSI to 24, pushed 6 sectors into RISK OFF, and sent the VIX to 30, appears to be decisively over.

In our view, the speed of this recovery is notable. The medium-term moving 100 points in a single session — from -58 to +42 — reflects the kind of explosive breadth thrust that historically signals the start of a new leg higher, not the end of a bounce. When breadth expands this quickly and this broadly, it tends to be a sign of genuine institutional participation rather than a short-covering rally.

The VIX at 21.3 is slightly above our 22 threshold but well within the range of normal market conditions. Consumer Discretionary at -37 remains the one area of weakness, though even it has improved significantly. The focus now shifts from recovery milestones to monitoring whether this RISK ON signal sustains — and looking for opportunities that the new regime creates.