The cyclical reflation trade seems to be picking up strength here, but utilities aren’t giving up. Small-caps are still in the process of making slow progress and getting pulled higher by cyclicals. Lots of central bank activity this week led by the Bank of Japan’s interest rate decision on Monday. We’re going to see two competing forces on the dollar this week.

At the risk of sounding cliche, this time could be different because utilities, gold and Treasuries are rallying at the same time. The sooner the Fed cuts interest rates, the better for small-caps, but we’ll get a better sense of how realistic that is later this week. In the short-term, gold has significant predictive power when moving sharply.

Tech stocks are turning choppy here as some of the magnificent 7 stocks are behaving not so magnificently. Small-caps are finally starting to show a little life and it coincides with the rebound we’re seeing in cyclicals. Lumber prices have been steadily rising for a few weeks, but last week’s big spike in gold prices could prove more meaningful.