The market is flashing a major risk-off warning signal that equities are ignoring: Gold has surged +6.81% in a single day amid escalating geopolitical tensions (Ukraine/Russia, Venezuela), yet SPY hovers near all-time highs. This extreme divergence between safe-haven panic and equity complacency is unsustainable. Technically, SPY is failing to break resistance at $697.84 while displaying intraday weakness (trading below 30min SMA20/50), and the tech sector (QQQ) is already leading the decline (-1.15%), suggesting a defensive rotation is underway.
The primary trend remains bullish on the daily timeframe, supported by a 'Golden Cross' configuration and recent Fed rate cuts that provide liquidity support. If the market shrugs off geopolitical fears as contained, the 'debasement trade' could lift nominal asset prices, including equities, potentially fueling a breakout to new all-time highs above $698.
The market is flashing a major risk-off warning signal that equities are ignoring: Gold has surged +6.81% in a single day amid escalating geopolitical tensions (Ukraine/Russia, Venezuela), yet SPY hovers near all-time highs. This extreme divergence between safe-haven panic and equity complacency is unsustainable. Technically, SPY is failing to break resistance at $697.84 while displaying intraday weakness (trading below 30min SMA20/50), and the tech sector (QQQ) is already leading the decline (-1.15%), suggesting a defensive rotation is underway.
The market is flashing a major risk-off warning signal that equities are ignoring: Gold has surged +6.81% in a single day amid escalating geopolitical tensions (Ukraine/Russia, Venezuela), yet SPY hovers near all-time highs. This extreme divergence between safe-haven panic and equity complacency is unsustainable. Technically, SPY is failing to break resistance at $697.84 while displaying intraday weakness (trading below 30min SMA20/50), and the tech sector (QQQ) is already leading the decline (-1.15%), suggesting a defensive rotation is underway.
SPY is consolidating in a tight Bollinger Band squeeze just 0.8% below all-time highs, holding firmly above the volume Point of Control ($689.86). The VIX term structure remains in contango, supporting a structural risk-on backdrop despite intraday noise. A breakout above the immediate resistance at $693 targets a run to psychological $700, fueled by rotation into small caps and value sectors.
Thesis Competition: BEAR case won (75% vs 65%).