Risk Appetite Returns - But Cycles Signal Critical Inflection Zones
Global Dominant Cycle Watch | Jan 22
Wall Street staged a clear rebound after the weakest session since October, shifting back into a risk‑on environment. The Dow Jones gained up to 650 points intraday, while the S&P 500, Nasdaq and small caps followed with broad participation. Notably, the S&P Small Cap 600 reached a new all‑time high, confirming improving market breadth.
The rally was driven less by resolution and more by de‑escalation. Political rhetoric eased, particularly around trade tensions and geopolitical risks, which was enough to trigger a relief rally. While losses from the prior session were not fully recovered, aggressive risk aversion has clearly receded.
On the equity side, semiconductors and selected biotech names led the rebound, while margin‑sensitive media stocks continued to struggle. Airlines surprised positively, underlining that parts of the real economy remain resilient despite elevated macro uncertainty.
Bond yields stabilized near 4.25% on the US 10‑year, the dollar found support, and gold pushed to new all‑time highs, driven by sustained central‑bank demand and growing skepticism toward US Treasuries. Oil remains in a multi‑week uptrend, while crypto markets continue to move sideways.
Overall sentiment has improved, but the market remains highly sensitive to political signals and positioning. Against this backdrop, cycle analysis becomes increasingly critical.
Global Cycle Analysis — Peaking & Troughing Assets
The following cycle framework analyzes approximately 60 international core assets, including global equity indices, sector benchmarks and futures markets. Each asset is subjected to a daily cycle analysis to identify where it stands within its dominant market cycle.
Assets with a Rating ≥ 6 indicate a potential cyclical top (peaking phase). Assets with a Rating ≤ –6 indicate a potential cyclical bottom (troughing phase). These thresholds define candidates for possible inflection points, not timing signals.
