These are the 6 risk indicators I track for confirmation or divergence of the move in the S&P 500 — and right now, four are confirming the rally while two remain neutral, as the index hovers just 0.05% below its record high.
Here’s the chart:
Let's break down what the chart shows:
The top row tracks equity leadership: High Beta vs. Low Volatility, Cyclicals vs. Defensives, and Discretionary vs. Staples.
The bottom row captures macro and internal confirmation: the Inverted US Dollar, the Advance-Decline Line, and High-Yield vs. Treasury Bonds.
The Takeaway: These 6 charts track the tug-of-war between offense and defense. Together, they show where money is flowing — and whether this rally is built on broad support or narrow leadership.
4 out of 6 signals are in clear confirmation mode, lending strong support to the S&P 500’s climb.
High Beta stocks and Cyclicals are leading the charge — a textbook sign of risk-on behavior.
Market breadth is strong, with the Advance-Decline Line leading the way as price flirts with record highs.
Even the US Dollar, inverted here, is tilting the right way — falling as stocks rise.
Yet two gauges haven’t fired.
Credit markets aren’t confirming just yet, with High Yield Bonds still lagging Treasuries.
And the Discretionary vs Staples ratio remains neutral, hinting that consumer risk appetite isn’t all-in just yet.
Risk appetite is widening, but it isn’t unanimous.
The current move higher in the S&P 500 stands on solid ground
But without confirmation from credit and discretionary leadership, it’s not a full green light.
So, do the two holdouts fall in line, or does the index stall at its prior peak?
Grant Hawkridge | Chief Aussie Operator, All Star Charts
Sean McLaughlin doesn’t care if the market’s up, down, or sideways — he’s got a strategy for it. In All Star Options, he teaches you how to trade smarter with proven frameworks and high-probability ideas. Join today and see how the pros play.
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