The 30-year broke 5% on Thursday. ES made a new all-time high the same morning. By Friday’s close, ES had given back 108 points from the high and the eighth green week survived by just 28 points. Now the test: does the bid under this market hold, or did yields just end the streak?
Last week we published six levels. Three triggered. All three resolved in our direction. The pivot caught the CPI dip to the tick. The stretch target cleared as ES printed the ATH. But the number that matters more: breadth fell to the 35% threshold, triggering one of our two disqualifiers. The Lie drops to 0. We are no longer leaning.
The Lie: 0 Neutral. Down from +1 last week. Down from +3 five weeks ago. Score dropped four points while price rose 370. Both our qualitative score (the Lie) and our quantitative model agree: no edge right now. That gap between rising price and falling breadth either resolves with a participation thrust after NVDA, or it was the warning.
Five weeks ago at 7,164, we flagged a breadth divergence. Since then, ES rose 370 points while the number of stocks making new highs kept falling. Participation hasn’t confirmed. Stock correlation dropped to 0.13, the lowest since 2016. Correlation this low means the index tells you almost nothing about what individual stocks are doing. The leaders we track since W13 are still up 18-41%. The index is noise. Selection is everything.
The scorecard, seven levels, two high-conviction ideas, and the full game plan are below the fold.
