Risk-On Just Took the Wheel 🚀

Today's number is... 142.4

My custom Risk-On / Risk-Off ratio closed Friday at 142.4, its highest level of 2025.

Here’s the chart:

Let's break down what the chart shows:

• The black line is my custom Risk-On/Risk-Off ratio.
  • The Risk-On components consist of Copper (HG1), High Yield Bonds (JNK), Aussie Dollar (AUDUSD), Semiconductors (SOXX/SPY) & High Beta (SPHB/SPY).
  • The Risk-Off components consist of Gold (GC1), US Treasury Bonds (TLT), Yen (JPYUSD), Utilities (XLU/SPY) & Staples (XLP/SPY).
• If this ratio rises, the numerator (risk-on) is outperforming the denominator (risk-off); if it is falling, the denominator (risk-off) is outperforming the numerator (risk-on).

The Takeaway: This ratio ripping to its 2025 high marks a clear shift.

Buyers want risk. They’re not hiding in safety trades.

They’re stepping up and pushing the tape where strength pays.

Every part of the Risk-On basket sits above its 200-day moving average. Copper, high yield, the Aussie dollar, semiconductors, high beta. All trending. All pointing in the same direction. You never see that in a defensive tape.

Risk-Off looks the opposite. Everything except gold sits below its 200-day moving average. Treasuries, yen, utilities, staples. Money is rotating out of protection and into growth and cyclicals.

That’s classic risk appetite.

The absolute Risk-On Index hitting fresh all-time highs on Friday backs it up also. Not relative strength. Actual new highs. That tells me that traders want exposure, not shelter.

The next major level for this ratio sits at the prior all-time highs from July 2024. A clean break through that level opens the door for even stronger leadership from the groups that run in bull markets.

So, does risk keep pressing the advantage, or does it hesitate at the final ceiling?

Let me know! 

Grant Hawkridge | Chief Aussie Operator, All Star Charts

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