TradingEdge Weekly for Jul 3 - risk-on signals, dollar strength, strong Q2, crude drawdown, bond sentiment, GLD setup, financials broadening
Key points:
- GLD down 30% from highs with GLD Optix below 36% (high win rate reversal signal), favorable seasonal window (71% win rate) begins Jun 29.
- Dollar RSI completes extreme reversal (below 35 to above 78) at 13-month high - near-term strength persists, but severe headwind for commodities (43% win rate).
- Microcaps, High Beta, and IPO activity flash multiple risk-on signals simultaneously - suggests investors remain in buying mood and bull market may have further upside.
- Crude falls 38%+ from 252-day high - oil itself remains weak, but broad equity indexes showed resilient forward returns; not a reliable standalone sell signal.
- Hedge fund bond exposure near -40% (contrary bullish for TLT), Stock/Bond Ratio reversing from extremes - near-term SPX weakness (win rate <40%), but TLT seasonal tailwind ahead.
- S&P 500 +14.9% in Q2 satisfies 'strong quarter' criterion - historically 20 wins and 0 losses in the following 9 months since 1950.
- Financials lead all sectors in 10-day relative strength (57% of stocks >80th percentile), but XLF relative TrendScore only 2 vs absolute 8 - participating in rally, not yet leading it.
House view:
- Stocks:
- Short-term: Range-bound. U.S. equities displa

