8/6 Lines After Dark

Risk-Off Failed Confirmation

Last Friday, the core risk criteria: trend, breadth, and momentum— triggered a risk-off alarm. For a moment (one single day), the market stepped into a defensive environment. And just as quickly, it stepped right back out.

By Monday, the S&P 500 had reclaimed trend, breadth turned positive, and the conditions required to confirm the signal failed to materialize. Hedges were removed and positioning returned to bullish. Tuesday and Wednesday both used the 20-day moving average as support, reinforcing this as a false alarm. ARKK, my preferred risk-on barometer, held its prior breakout level throughout the brief pullback.

The 6300 level served as the guiding threshold: prices above would void the alarm, whereas prices below would have maintained caution. Wednesday’s session closed at 6345, and at the time of writing, S&P 500 futures are trading 6363.