- It’s a risk-on market.
- We’re playing to win.
- Anything else is irresponsible.
From where I’m sitting, this is still a “risk-on” market.
And the market itself is the one telling us.
In healthy environments, the leadership comes from offense — growth, cyclicals, and higher-beta stocks. That’s exactly what we’re seeing.
Meanwhile, the groups that typically thrive in “risk-off” conditions are lagging badly.
That matters.
Because when your offense is on the field, you don’t call defensive plays. You press the advantage.
And right now, the market is telling us it’s still time to play offense.
So we want to keep calling our offensive plays.
Offense Hits All-Time Highs
When I think “risk on,” I think High Beta.
High Beta is offense.
Think fast quarterbacks with big arms. Shifty wide receivers. Explosive running backs. Big tight ends who used to play basketball.
You don’t ask these guys to play it safe. You give them the ball and let them make plays.
If you follow sports, you already know exactly what I mean.
And if you don’t, I would encourage you to go watch the final drive of the Miami Hurricanes vs Texas A&M Aggies College Football Playoff game this weekend.
Miami won that game by doing one simple thing: They put the ball in the hands of their best playmakers when it mattered most.
That’s what great offensive coordinators do. And it’s exactly what traders and investors need to doing in a risk-on market.
In markets, those playmakers are High Beta stocks.
And last week, High Beta just closed at new all-time highs.
Even more important, they also closed at new all-time highs relative to Low Volatility stocks:
I’ve been referencing this ratio quite a bit since last month because all the chatter on the interwebs and basic cable television stations was that market breadth was weakening.
That narrative doesn’t hold up.
High Beta stocks are fast, aggressive, and more volatile by nature — just like those skill players Miami leaned on late in the fourth quarter. When markets are healthy, these stocks should lead.
Low Volatility stocks are the opposite: slower, safer, and defensive. They exist to protect capital, not to compound it aggressively.
And right now, they’re doing exactly what they’re supposed to do in a risk-on environment: underperforming.
As a group, Low Volatility stocks just closed at new all-time lows relative to High Beta stocks.
That’s not defensive behavior.
That’s the offense still running the game plan.
The Most Risk-On Stock?
I study markets closely every single day.
And you can’t have a serious conversation about risk without talking about the most risk-on stocks — the ones that simply do not work in fearful, defensive environments.
At the very top of that list sits Deutsche Bank (DB).
If the world were truly on the brink — if capital were about to flee equities the way the doom-and-gloom crowd keeps warning — Deutsche Bank would not be making new highs. Full stop.
This is a stock that thrives only when conditions are strong. When confidence is high. When capital is flowing toward risk, not away from it.
And yet, here it is, trading at its highest levels in more than a decade:
That’s not defensive behavior.
That’s “risk on” — as loud and clear as it gets.
And it’s not just Deutsche Bank. The entire European financial complex is confirming the same message.
The iShares MSCI Europe Financials ETF (EUFN) just closed at new all-time highs:
These are the most offensive players on the field.
You don’t see charts like this breaking out in bearish environments. When the market turns defensive, these names are the first to roll over, not the last.
And when that shift happens, there’s no mystery. You’ll see it immediately.
Low Volatility stocks, Consumer Staples, and other defensive groups start running onto the field — the linebackers, defensive ends, and safeties.
They’re literally called “safeties” for a reason.
But that’s not what’s happening right now.
The players on the field today are built for offense.
So we’re calling offensive plays.
Anything else would be irresponsible.
Big shoutout to the Miami Hurricanes — their biggest win in more than two decades.
Funny enough, this market feels a lot like that era too: healthy rotation, broadening participation, and leadership from cyclicals like Industrials, Financials, Precious Metals, and international equities.
No two markets are ever identical.
But they can most certainly rhyme.
These are the ingredients of championship markets.
And champions don’t play not to lose.
They play to win.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs