The US bombed Iran twice last week and the VIX couldnt close above 17.
The US hit Iran twice last week. Real strikes. And the VIX, the market's fear gauge, couldnt close above 17. By Friday the S&P was sitting just under its record high.
Most people read that as a strong market shrugging off bad news. I read my breadth boards and saw something thinner underneath.
The rally is narrow
The index is near a record, but the average stock is not. Only 46.6% of the full market is above its 50 day average. Inside the S&P 500 that number is 60.5%. So the big index looks healthy while the broad market is already split down the middle.
That gap is the story. A few large names are carrying the tape and everything else is drifting.
The money crowded into one corner
The strength went to financials, the top sector at 74.6% internal strength, while energy sat at the bottom near 25.8%. Financials do well when interest rates stay high. So the leadership of this whole market is one bet: rates hold, the economy holds.
Bonds gave the real answer
Normally when a war starts, money runs into safe havens, the assets people buy when they get scared. Government bonds, and safe currencies like the Swiss franc and the yen. Last week none of that happened. Bonds fell. The franc and yen didnt move.
Thats the second time in ten days bonds refused to rally, once on weak jobs data and once on live missiles. Everyone is leaning the same way. When a crowd is positioned this hard on one outcome, it doesnt take much to turn it.
What Im watching
That 46.6% number is the one I keep coming back to. If it falls while the index climbs, the market is thinning out, and thats when I trim instead of add.
Weekly is too slow for this. I track these boards daily now, its the whole point of the app I built: DM me for the link.
Posted Jul 11, 2026, 1:43 PM UTC