Gold is glittering. Will everything else?

The stock market has surged off its early April lows, and while the uptrend remains firmly intact, it’s worth remembering that no rally moves up in a straight line.

Last week’s price action on the S&P 500 weekly chart delivered something we haven’t seen in over a year, a doji candle. This rare set up, where the open and close are nearly identical, reflects indecision, and often marks a pause or potential reversal in a prevailing trend.

Given the index’s strong upward trajectory, the doji may be signaling a bout of exhaustion. Add to that the sharp V-shaped breakout above the 6100 level—a structure that historically carries a higher failure rate—and a near-term retest of the psychologically significant 6000 mark wouldn’t be surprising.

What’s more, the bond market is looking heavy, and rising rates are just about the last thing the current administration wants to see right now. Higher yields hit a wide range of sectors, think housing, small caps, and especially high growth sectors like biotechs. A quick glance at the iShares 20+ Year Treasury Bond exchange-traded fund chart shows it barely holding on to the $85 level, which has been a key support zone throughout the year in January, April, May, June, and now July.

But here’s the risk. Support can turn into resistance once it breaks. The chart’s forming a classic bear flag, a pattern that usually resolves lower, and a clean break beneath $85 could send it sliding to $82 in short order. That kind of move wouldn’t go unnoticed in equities. Maybe the so-called “smarter” bond market is picking up on something the stock market hasn’t yet priced in.

No macro conversation is complete without a glance at gold. The prevailing view seems almost unanimous, and the uptrend is undeniable. Ironically, that may be its only flaw—sentiment is getting crowded. Still, price action doesn’t lie, even if people do, as the old adage reminds us. The rally has been orderly, with a classic uptrend firmly in place.

Since April, gold has consolidated neatly between the psychologically significant $3,200 and $3,400 levels. A decisive breakout above the upper end of that range could open the door to a move toward $3,800 in the back half of the year.

Critics who wrote off gold as ‘dead money’ from the COVID lows through 2023 can’t make that claim anymore. And with the metal’s continued strength, you get the sense it may be sniffing out something the broader market hasn’t quite grasped yet.