Canaries Just Flew Out of the All Clear Zone 🐦

Today's number is... 56

The ETF Canary In The Coal Mine Composite has slipped to 56, which puts it in the Watch the Air Zone after three months in the All Clear Zone.

Here’s the chart:

Let's break down what the chart shows:

• The top panel plots the S&P 500 in black with the 200-day moving average in red.
• The lower panel shows the ETF Canary In The Coal Mine Composite in black. The green line marks the All Clear Zone. The grey band marks the Watch the Air Zone. The red line marks the Toxic Warning Zone.

The Takeaway: The composite has stepped out of the All Clear Zone for the first time since August. That run lasted three straight months and marked the strongest internal stretch of the year.

Falling back into the Watch the Air Zone tells us participation is softening across the most sensitive groups of the market.

It does not say the trend is broken. But it does say the internal engine has cooled.

Trend Position and Trend Direction sit under the hood of the composite, and they show what’s really shifting.

Trend Position is still strong at 75, which means most of these eight canaries remain above their 200-day moving averages.

Trend Direction has slipped to 37.5, showing fewer rising moving average slopes. That drop in direction is often the first sign that internal momentum is cooling beneath the surface.

You don’t see the individual ETF charts here, but the ETF mix has weakened. Several of the canaries have lost momentum in recent weeks, and that is what pushed the composite out of the All Clear Zone.

This is exactly why we use the model. It measures how these key risk groups are behaving so we can see when participation is widening or thinning. These shifts often show up in the composite before they become visible in the major indexes.

The market trend is still intact. But the canaries are no longer singing in perfect harmony.

Are you treating this as noise, or as a hint that the tone is shifting?

Let me know! 

Grant Hawkridge | Chief Aussie Operator, All Star Charts

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