The composite has slipped back into RISK OFF territory at -33, erasing yesterday’s brief improvement. SPY sits at $652.66 with an RSI of 37 and VIX back up to 27.0. The medium-term score has deteriorated sharply back to -92 — approaching maximum bearish levels again — while the short-term improved slightly from -70 to -60. Breadth shows a mixed picture: the 20-day breadth improved to 31% (up from 23%), but the 50-day remains weak at 27% and the 200-day holds at 46%.

Sector Leadership

Utilities strengthens while Materials climbs — but five sectors remain in RISK OFF:

💡 What We’re Watching

• Medium-term score drops back to -92 — After briefly improving to -75 yesterday, the medium-term score has reversed sharply back to near-maximum bearish levels. Only 27% of stocks are above their 50-day MA. This kind of reversal suggests yesterday’s improvement was a pause in the selling, not the beginning of a recovery.
• 20-day breadth improves to 31% — This is the one genuine positive in today’s data. Short-term breadth has expanded from 18% a week ago to 31% today. While still weak, the trend is in the right direction and suggests some stocks are attempting to stabilize above their short-term moving averages.
• Utilities strengthens to +44 — Up from +38 yesterday, Utilities continues to build defensive strength. The medium and long-term scores at +70 and +65 respectively make it the second-strongest sector behind Energy. In a market where five sectors are in RISK OFF, Utilities’ resilience stands out.
• Consumer Discretionary improves from -61 to -43 — The largest single-sector improvement today, driven by the short-term score recovering from -75 to -35. Still firmly in RISK OFF, but the short-term bounce suggests some oversold relief may be building in the most beaten-down areas.

The Bottom Line

The return to RISK OFF after just one day in CHOP underscores the fragility of this market. The medium-term score’s sharp reversal from -75 back to -92 is particularly telling — it suggests the underlying damage is still deepening even as some short-term metrics improve.

In our view, the market is sending conflicting signals. Short-term breadth is expanding, which is constructive, but the medium-term trend continues to deteriorate. This kind of divergence typically resolves in one of two ways: either the short-term improvement pulls the medium-term higher (a genuine recovery), or the medium-term weakness drags the short-term back down (a failed bounce). History favors the medium-term timeframe in these situations.

We continue to watch for a sustained improvement in medium-term breadth and a VIX decline below 22 as the key signals that would suggest a durable bottom is forming.