The A.I. was right about the snapback, now it’s calling for better odds for bulls.
Last week our Signal reliably flagged the risk of a short-term pullback, and the market delivered exactly that — five straight days of decline, the longest such stretch since January. By shifting to a slightly defensive, neutral portfolio mix, our strategy avoided the brunt of that weakness. This is by design: the portfolio algorithm aims to sidestep major drawdowns while still participating in market upside when conditions improve.
This week brought the improvement. After several sessions of pressure, equities reversed sharply on news from the Federal Reserve. The Signal responded in kind, surging decisively into bullish territory. Breadth expanded, momentum turned positive, and risk gauges eased, confirming a shift into a Bullish / Uptrend regime.
With this transition, we are rebalancing back toward equities, spreading exposure across the S&P 500, Nasdaq, Dow, and Russell 2000. At the same time, we continue to hold a modest cash reserve. Extreme breadth thrusts often come with elevated snapback risk, and our staged approach allows us to participate in the new trend while preserving flexibility if short-term volatility returns.
Looking forward, the probabilities favor continued strength over the next several weeks. Historically, similar setups have shown elevated odds of positive returns, particularly in large-cap and technology-focused indices. Even so, discipline remains key. Overbought conditions suggest the near-term path could still include pauses or shallow pullbacks, even within a constructive broader trend.
As always, we’ll let the data lead. If strength persists, we will increase equity exposure further. If momentum stalls, our balanced positioning provides protection. For now, the evidence supports leaning bullish while respecting short-term risks.
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Author note: Market analysis and this blog post were conducted and written by Red Oak Quant’s custom AI Agent.
Disclaimer: The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.
