Near-term US Equity trends still look bullish technically per Friday’s note, with ^SPX0.17%  still tracking toward the 7500 target and Overweight Technology maintained as the Russell 3000 A/D line continues to confirm at new highs alongside ^SPX0.17% . Today’s session did not change that core thesis, but the rotation out of many US sectors like Consumer Discretionary, Consumer Staples, Healthcare, and Financials seems to be accelerating, not stabilizing and turning higher. Thus, a broad-based rally still looks to take some time, given that many sectors are not participating. On the macro side, the tailwinds from Friday continue uninterrupted: DXY remains soft and broke its rising trendline last week, WTI Crude looks to be on the verge of a slide toward $79 in front-month futures, and long-end yields (^TYX, ^TNX) have rolled lower from the multi-year resistance I flagged the prior week. This soft-Dollar, soft-Crude, soft-rates backdrop could prove to be the macro setup that allows capital to migrate away from US cap-weighted growth in the near-term and into international Equities, commodity exposures like Silver, and Chinese internet names.

SPY0.17%  / ACWX-0.13%  weekly relative ratio: multi-year rising trendline from 2018 lows has been broken decisively; US Equity outperformance vs. Rest of World is starting to wane

The weekly SPY0.17% /ACWX-0.13%  relative ratio chart from Symbolik shows arguably one of the more interesting developments since late March, given the snapback rally in Mag 7 back to test all-time highs.

As seen below, the ratio of SPY0.17% /ACWX-0.13%  has managed to successfully rebound in recent weeks, yet remains below the key intermediate-term uptrend while still trading within a minor downtrend from the peak last December.

Thus, even on a “Mag 7” push up to new all-time highs, there remain some parts of Mag 7 that haven’t shown much strength lately — namely NFLX-2.40% , MSFT-0.68% , and META-1.76% . Thus, the ratio of SPY0.17% /ACWX-0.13%  has not yet moved up sufficiently to expect SPY0.17%  outperformance.

Given the lack of a sufficient snapback in SPY0.17% /ACWX-0.13%  along with a falling US Dollar, it still makes sense to have some international exposure and not expect that US outperformance is officially “back” in a way where the US would outperform most parts of the world.

Until the ratio of SPY0.17% /ACWX-0.13%  reclaims the prior uptrend and surpasses the near-term downtrend back above 10.25, it arguably still pays to add to international Equity exposure and not put all one’s eggs back into the Technology basket.

SPY0.17%  / ACWX-0.13%  Weekly Relative Ratio – Multi-year rising trendline from 2018 lows has not yet been recouped despite a rising “Magnificent 7”

NYA cycle composite has begun rolling lower as ^NYA prints at all-time highs near 22,968 — an intra-market divergence that aligns with the 5/15–5/19 timing window from Friday’s note

The composite cycle work on the NYSE Composite Index (^NYA) shown here from “Cycle Analyzer” pinpoints a coming peak which could get underway sometime in the next few weeks.

My expectation is that this cycle weakness translates into a price-level inflection point somewhere between mid-May and June before a sharp rally up into this fall.

While this cycle composite clearly shows the period between August and November to be lower (possibly into mid-term elections), it’s proper to see breadth turn further to the downside, along with a break in Technology, to think this is getting underway.

While the extent of the deterioration in sectors like Healthcare and Consumer Discretionary is troublesome, there hasn’t yet been any evidence of Technology rolling over. This is thought to be the first step in the process for any type of May drawdown.

(As always with cycle composites, the pink line projection measures amplitude and not magnitude, so the turns themselves are more important than the absolute price levels suggested by the composite itself.)

NYSE Composite (^NYA) with Cycle Composite — Coming pullback likely proves mild

Silver: Coiled symmetrical triangle broken is bullish — it pays to wait for possible confirmation from Gold

Silver has spent the last several weeks coiling into the apex of a tight symmetrical triangle pattern on daily charts, but Monday’s sharp rally might mean that both Gold and Silver are close to starting larger rallies, which could carry back to new all-time highs.

My expectation is that a clean breakout above the descending upper resistance trendline triggers a continuation move toward $92 initially for front-month Silver futures, with potential to extend to retest targets near $98.65 and eventually push back to all-time highs.

For now, Silver looks to have taken the early lead. Single-name exposure through SLV6.74%  (iShares Silver Trust) or PSLV6.18%  (Sprott Physical Silver Trust), or the silver miners through SIL4.84%  (Global X Silver Miners ETF) and individual names like PAAS5.41% , AG8.14% , and FSM1.12% , all offer ways to express the Silver setup.

With the macro backdrop of a weakening Dollar, rolling Crude oil and/or rates, the precious metals trade looks well-positioned to be a meaningful beneficiary of the rotation in the weeks ahead.

Confirmation in the form of a similar move in spot Gold above $4,850 should put the precious metals rally back “on the front burner.” For now, Silver looks to outperform. The daily chart below shows this triangle breakout.

Silver Daily – Coiled symmetrical triangle broke out on Monday; test of $92 looks likely initially for Silver

Ahead of Trump/Xi meeting, can KWEB0.20%  start to bottom out? Ratio of KWEB0.20%  / CQQQ2.07%  weekly at multi-year lows still shows CQQQ2.07%  to be a better near-term bet

The weekly KWEB0.20% /CQQQ2.07%  ratio chart from Symbolik shows Chinese internet names (KWEB0.20% ) at multi-year relative lows vs. the broader Chinese technology sector (CQQQ2.07% ), with the ratio sitting at 0.55 after declining from peaks near 0.91 in 2020–2021.

My view is that Chinese Equities might start to work better now as the PBOC has stopped resisting and let the USD/CNH pair break 7.00. That could be a possible “green light” — Renminbi strength feeds directly into the dollar value of Chinese internet companies’ revenues.

Thus, how one plays “China” depends on one’s thesis: CQQQ2.07%  will offer exposure to AI capex and chip nationalism.

Meanwhile, if you want a mean-reversion / Chinese consumer rebound trade, KWEB0.20%  looks preferred. However, given its recent underperformance, this also means it’ll likely stay a relative laggard until that catalyst shows up.

Buying ahead of this Friday’s potential Trump/Xi meeting might make sense, but owning both CQQQ2.07%  and KWEB0.20%  makes sense until KWEB0.20%  starts to break out technically.

Thus, for short-term investors, CQQQ2.07%  still makes better sense as a technical way to play Chinese Equities. As shown below, this ratio very well could pull back further and test the 2022 lows.

KWEB0.20%  / CQQQ2.07%  Weekly Relative Ratio – Multi-year lows but no real support until 2022 lows

Bottom Line

• International / SPY0.17% /ACWX-0.13% : Still early to expect US dominance despite “Mag 7” snapback.
• NYA cycle and timing: The 5/15–5/19 window from Friday’s note remains the key time zone for trend change in cap-weighted US Equities. Until then, maintain Overweight Technology technically and respect the bullish trend, with SMH1.72%  $525.04 Tenkan-sen as the daily-close stop.
• Silver: Own here following its symmetrical triangle breakout, with eyes on Gold’s ability to potentially exceed $4,850.
• KWEB0.20%  / CQQQ2.07% : Add Chinese internet exposure ahead of the Trump/Xi meeting, but favor CQQQ2.07%  as a better near-term choice than KWEB0.20%  until a relative breakout can happen in the KWEB0.20% /CQQQ2.07%  ratio.