That’s a new 8-month high for my custom Risk-On Index — and it just broke above a key trendline.
Here’s the chart:
Let's break down what the chart shows:
The green line in the top panel is my custom Risk-On Index.
The red line in the bottom panel is my custom Risk-Off Index.
The Takeaway:The Risk-On Index is a clean gauge of risk appetite that blends key assets like copper, high-yield bonds, the Aussie dollar, semiconductors, and high beta.
And right now, it’s sending a clear message — buyers are getting aggressive.
Meanwhile, the Risk-Off Index is heading in the opposite direction. After failing to hold above a key support and resistance level, it’s rolling over again — but hasn’t yet broken below its own trendline.
Together, they signal a clear shift in positioning: away from defense and back toward risk.
The last time we saw this kind of dual confirmation was late 2022. That marked the start of a brand new bull market in equities.
So, if the Risk-Off Index confirms with a fresh trendline breakdown, it could open the door to a broader rotation into growth, cyclicals, and high beta stocks.
Risk-On assets have shown their hand.
Now it’s the defensive side’s turn to confirm.
Is this the start of a full-blown rotation — or just a head fake?
Grant Hawkridge | Chief Aussie Operator, All Star Charts
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