Hi friends! 👋🏼

One of the more interesting developments this past week was what didn’t happen.

Semiconductor stocks took a beating, AI spending concerns resurfaced, Treasury yields reached new highs, and yet the broader market managed to finish higher.

The S&P 500 gained 1.2%, the Dow advanced 0.9%, and the Nasdaq Composite added 0.6%. The Nasdaq reached new record highs early in the week, while the S&P 500 closed above 7,800 for the first time.

Smaller companies weren’t invited to the party, however, with the Russell 2000 losing 0.9% and the S&P Mid Cap 400 finishing unchanged.

But here’s what caught my attention.

We’ve spent months hearing that this bull market is dangerously dependent on a handful of technology stocks. That’s a legitimate concern. Yet last week, some of those very stocks stumbled, and the broader market barely flinched.

For a bull market supposedly unable to stand without its technology leaders, that wasn’t a bad showing.

More importantly, despite the seemingly endless warnings about an approaching correction, the market continues to resist doing what the bears expect it to do.

That doesn’t mean they’re necessarily wrong about the risks. It means the price action has yet to confirm their concerns.

And that’s where I want to begin.

The Price Action: Still More Bullish Than Bearish

If this market is constructing a major top or preparing for a significant correction, I’m still waiting for the price action to provide convincing evidence.

So far this October, the S&P 500 has climbed back toward its August high near 7,816, briefly moving above that level last Tuesday.

That move substantially completed the right shoulder of the potential inverse head-and-shoulders formation we’ve been following, with upside targets near 8,035 and 8,057.

The first breakout attempt failed. But what happened afterward was just as interesting.

On the shorter-term chart, we can see the attempt to establish an island-gap bull trap reversal following Tuesday’s breakout. That’s precisely the kind of development I’ve been watching for as potential evidence of a change in the market’s character.

But the selling never developed into sustained downside follow-through.

Instead, buyers returned, and another short-term bear trap reversal emerged toward the end of the week.

Once again, the market frustrated traders betting on an imminent breakdown.

This is becoming a familiar pattern. Breakouts struggle, breakdowns fail, and traders chasing either direction frequently find themselves on the wrong side of the next reversal.

It’s not necessarily the kind of price action that makes trading easy. But it’s also not what I would expect to see if sellers were firmly gaining control.

Failed breakouts are worth respecting. Failed breakdowns are, too.

When a market is moving sideways more than it’s trending, I find it helpful to simplify everything.

Forget the complicated patterns for a moment. Forget what everyone thinks should happen next.

Just put the price action into boxes.

From that perspective, the larger bullish structure remains intact.

The September low near 7,507 is the first important support level I’m watching. Below that, the June low near 7,237 remains a much more significant reference point for the larger trend.

Meanwhile, the existing range breakout continues to suggest upside potential toward 8,003, with the inverse head-and-shoulders formation offering additional targets near 8,035 and 8,057.

Of course, those are potential targets, not promises.

But as long as the market continues to defend important support and refuses to establish a meaningful sequence of lower highs and lower lows, I believe it’s premature to declare a major top.

There’s a difference between recognizing that a market is vulnerable and having sufficient evidence to act on that vulnerability.

And right now, I still see a market that is considerably more resilient than the bearish narrative would have us believe.

What Changed Beneath the Surface?

The other encouraging development last week was the improvement in participation.

After seven consecutive losing weeks and a decline of roughly 7%, the equal-weighted S&P 500 (RSP) finally found its footing, gaining 1.6% and outperforming the major averages.

Nine of the eleven S&P 500 sectors finished higher.

Consumer staples (+4.0%), utilities (+3.9%), energy (+3.6%), consumer discretionary (+3.1%), health care (+2.8%), and financials (+2.3%) all posted impressive gains.

The following relative rotation chart provides a helpful picture of what was happening beneath the indexes.

Meanwhile, semiconductor stocks headed in the opposite direction.

Renewed questions about whether AI revenues can justify the enormous sums being invested in infrastructure helped send the PHLX Semiconductor Index down 4.3% for the week.

Treasury yields added another wrinkle. The 10-year briefly climbed to 5.36% on Wednesday, another high for the year, before retreating to finish the week at 5.24%.

Oil prices also remained volatile as developments involving Iran and the Strait of Hormuz kept traders guessing.

And yet, despite all this, the broader market advanced.

Now, I’m certainly not declaring victory for market breadth. Some of the strongest gains came from defensive sectors, and small caps continue to struggle.

A rotation into consumer staples and utilities isn’t necessarily the same thing as a healthy expansion in risk appetite.

But I also don’t believe we should dismiss improvement simply because it doesn’t fit the prevailing narrative.

There’s a meaningful difference between a market that depends on a handful of stocks to rise and one capable of holding its ground while those stocks take a breather.

Last week offered at least some evidence of the latter.

Whether we’re witnessing the early stages of healthy rotation, a temporary move toward safety, or something in between remains to be seen.

That’s a much more useful question than asking, for the hundredth time, whether the market is too concentrated.

About That Breadth Problem

I understand why investors remain concerned about the market’s historically poor breadth.

Past major market tops have frequently been preceded by deteriorating participation, sometimes months before the indexes themselves finally turn lower.

The historical research from Quantifiable Edges makes that risk difficult to ignore.

And last Tuesday offered another reminder. As the S&P 500 and Nasdaq attempted their breakouts, the weakness beneath the surface was difficult to miss.

But I keep coming back to a distinction I’ve emphasized throughout this bull market.

Bad breadth is a condition. It is not, by itself, an actionable sell signal.

For me, the signals come from the price action: successful bull trap reversals, rallies that repeatedly fail, lower highs, lower lows, important support breaks that hold, and the deterioration of established uptrends.

Do we have convincing evidence of those developments yet?

Not in the broader market.

That doesn’t mean we ignore the risks. It means we respect them without allowing those concerns to dictate decisions that price itself hasn’t justified.

As for last week’s rotation, earnings season may have played a role.

With expectations already extraordinarily high for many technology and AI companies, it would make sense for some investors to reduce exposure to potential disappointment while shifting toward sectors where expectations are lower and the possibility of positive surprises may be greater.

Whether that repositioning develops into a sustained change in leadership is one of the more interesting questions heading into the next few weeks.

Last week’s resilience was encouraging, but what matters now is whether buyers can build on it.

With earnings season beginning and important inflation data arriving, we’re about to get several opportunities to find out.

For members, let’s turn our attention to the week ahead, the specific setups I’m watching, and, most importantly, what would cause me to increase, maintain, or reduce exposure as the market makes its next move.

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Dear friends,

We’ve arrived at one of the more important junctures of the fourth quarter: the beginning of the final major earnings season of the year.

And this one could be historic.

According to FactSet, third-quarter earnings for the S&P 500 are expected to grow nearly 30% over last year. And if companies exceed expectations by their usual margins, actual earnings growth could surpass 35%.

That would mark an extraordinary eighth consecutive quarter of double-digit earnings growth for the index.

Is it any wonder we’ve enjoyed such a powerful bull market?

In fact, Monday, October 12th marks the fourth anniversary of the market bottom that launched this bull market!

Feel like celebrating? Probably, especially if you’ve remained consistently invested throughout those four years, despite all the scares, setbacks, and seemingly endless reasons we’ve been given to sell our stocks and run for cover.

But there’s something about this remarkable period of wealth creation that I’ve been thinking about lately.

These may be the golden years for corporate America. But are they the golden years for everyone else?

After decades of increasing political influence, favorable tax treatment, substantial government support, and an extraordinary ability to improve profitability, many of America’s largest corporations have arguably never had it better.

And neither have many of their executives and shareholders.

But the average American worker? That’s another story entirely.

Unless you’re fortunate enough to occupy the upper levels of the corporate ladder, where enormous compensation packages and stock options can generate life-changing wealth, or you own a successful business capable of passing rising costs along to customers, the experience has often been considerably different.

For millions of Americans, the rising costs of housing, healthcare, insurance, and everyday necessities continue to make getting ahead a struggle. Even those earning decent incomes increasingly wonder whether they’re making any real progress.

And now comes the AI revolution, promising extraordinary advances in productivity and corporate profitability while simultaneously raising legitimate concerns about job security, wages, and the future of work itself.

Meanwhile, some of America’s largest and most influential corporations are committing staggering amounts of money to AI development and infrastructure, making enormous bets on a future that, for all its promise, remains extraordinarily uncertain.

And I can’t help wondering whether some of this risk-taking is being encouraged by the belief that these companies have become too big, too important, and too interconnected with our financial system to be allowed to fail.

After all, it’s not just their money at risk. It’s ours, too.

Millions of Americans have exposure to these companies, whether they realize it or not, through their index funds, 401(k)s, retirement accounts, and pension investments. Even those who have never deliberately invested a dime in AI may discover that a meaningful portion of their financial future is tied to the success of this enormous experiment.

And if things go wrong, who ultimately bears the consequences? Will it be the executives collecting enormous compensation packages today, or the millions of investors, workers, and retirees whose financial futures have become increasingly tied to these corporate bets?

Don’t misunderstand me. I believe AI has the potential to create extraordinary new businesses, industries, opportunities, and wealth. That’s precisely why I want to participate in this revolution, while remaining mindful of the risks.

But there’s an important distinction that investors should never forget.

AI can change the world without every investment made in its name turning out to be a good one.

History is full of revolutionary technologies that changed our lives while destroying enormous amounts of investors’ money along the way.

And that’s something worth remembering as we enter what could be one of the most consequential periods of corporate investment in our lifetimes.

Meanwhile, there’s a striking disconnect between what we’re seeing in corporate earnings reports and what we’re hearing from ordinary Americans about their financial circumstances.

Wall Street is celebrating record profits while too many on Main Street are wondering how to keep up.

And frankly, I’ve grown tired of being told that if we simply give corporations and the wealthiest Americans more favorable treatment, the benefits will eventually trickle down to everyone else.

We’ve been hearing some version of that promise for most of my life. Meanwhile, wealth and political influence have become increasingly concentrated, leaving many Americans wondering whether the system still works for them.

I sometimes think about Ronald Reagan’s famous observation that the nine most terrifying words in the English language are, “I’m from the government, and I’m here to help.”

Whatever your politics, I’ve never been particularly comfortable leaving my financial future in someone else’s hands.

And that’s really the point I’m trying to make.

I’m not waiting. I’m investing.

I’ve worked hard for decades, first in pursuit of the American Dream and now, just as importantly, in keeping it.

And I have no intention of leaving my financial future dependent on the promises of politicians, the generosity of corporate America, or the hope that prosperity will somehow trickle down to me.

If American corporations are enjoying a golden age of wealth creation, then I want to participate in it. Not simply as a worker or consumer, but as an owner.

And I want to help as many others as I can learn to do the same.

Because while we may have little control over the decisions made in Washington or corporate boardrooms, we have considerably more control over how we save, invest, manage risk, and position ourselves to benefit from the opportunities those decisions create.

Now, I recognize I’m making some broad generalizations here. Not every corporation is thriving, and certainly not every American worker is struggling. There are plenty of exceptions. I’m simply sharing what I’ve observed, what I’ve experienced, and what I continue to hear from people around me.

But there’s one exception to this story that I think deserves far more attention.

Those who have consistently owned stocks and participated in the growth of American businesses have had an opportunity to experience this economy very differently.

They’ve participated in the enormous wealth creation taking place around us, not because they somehow avoided every market correction, economic scare, or political crisis, but because they refused to let those events permanently knock them off course.

And that brings me back to something I’ve believed for a very long time.

For the little guy, owning a piece of America’s most successful businesses remains one of the best opportunities we have to build wealth and achieve financial independence.

That doesn’t mean investing blindly, staying fully invested regardless of conditions, or ignoring the very real risks that come with owning stocks.

Quite the opposite.

It means learning how markets work, recognizing opportunities when they appear, managing our risks, and having the discipline to act aggressively when the price action and probabilities justify doing so.

Just as importantly, it means knowing when to de-risk, protect what we’ve worked so hard to build, and patiently wait for better opportunities.

After all, building wealth is one challenge. Keeping it is another.

This philosophy is one of the primary reasons I started The Kirk Report back in 2003.

I remembered what it was like to be the little guy a decade earlier, trying to figure out how to save, invest, and create a better financial future without knowing where to begin. I made plenty of mistakes along the way, and I knew there had to be others trying to figure out many of the same things.

I wanted to share what I was learning, what was working, what wasn’t, and hopefully help others avoid some of the expensive lessons I’d learned firsthand.

It was my way of giving something back.

More than 23 years later, the name has changed, but the mission hasn’t.

It’s why I’m still here, doing what I do through Kirk’s Opportunities.

To share what I’m seeing, what I’m learning, what I’m doing with my own money, and most importantly, where I believe opportunities exist and why.

Not because I’ll always be right. I certainly won’t. But because I believe that with the right knowledge, preparation, patience, and discipline, ordinary investors can give themselves a fighting chance to build better financial futures.

And perhaps achieve something even more valuable than a successful investment portfolio.

The freedom to live more of our lives on our own terms.

That’s what this has always been about for me. First, building a better life. Now, protecting it. And along the way, hopefully helping others do the same.

So, as we enter what could be another historic earnings season, I’d rather spend less time worrying about whether someone else is going to make our financial lives better and more time focusing on what we can actually do for ourselves.

That means paying attention to what companies are actually earning, how investors respond to those results, where leadership is emerging, and whether the price action continues to support the opportunities in front of us.

Not predicting every headline or reacting to every scare, but preparing ourselves to recognize meaningful changes and act when the evidence and probabilities are in our favor.

Because while we can’t control what the market gives us, we can control how prepared we are to take advantage of it. And ultimately, that’s what I hope we can accomplish together here.

C.E. Kirk

The market finally did it.

The S&P 500 joined the Nasdaq 100 at a new closing high Tuesday.

I’ve spent a lot of time lately talking about weak breadth, stubborn Treasury yields, soft credit and a market increasingly dependent on a narrow group of leaders.

All of those things still matter.

But so does this:

Price broke out anyway.

There is a lesson in that.

A warning is useful. A condition is useful. Neither becomes a signal until price confirms it.

For now, price is confirming higher.

My job isn’t to argue with that. It is to figure out what would make the breakout stronger, what could derail it and where the next opportunities may be developing.

Believe What You See

Yesterday the S&P 500 closed at 7,818.93, setting a new record closing high.

The Nasdaq 100 closed at another record, 31,224.47.

Those are facts.

So are these:

• The Russell 2000 fell Tuesday.

• Nasdaq new lows continue to outnumber new highs.

• The 10-year Treasury remains near 5.27%.

• Brent crude is still hovering around $100.

• Credit has improved, but has not fully confirmed the equity breakout.

This is why I keep returning to one simple idea:

A condition is not a signal.

Weak breadth is a condition. High rates are a condition. Soft credit is a condition.

A confirmed breakdown in price would be a signal.

We don’t have that.

At least not yet.

Instead, we have new highs.

That doesn’t mean the warnings should be ignored. It means we respect the breakout while keeping the exit door in sight.

What I’m Watching

The most important question has changed.

It was:

Can the market break out despite 5%+ yields and weak breadth?

It did.

Now it becomes:

Can the breakout broaden before leadership starts to weaken?

That is a much better problem to have.

Here are the four things I’m watching.

Shocker: the first is price action.

1) Can the S&P 500 hold the breakout?

The first test is simple:

Hold above 7,800.

Then I want to see strong and sustained follow-through.

Former resistance should begin acting like support.

If we quickly lose 7,800 and cannot reclaim it, Tuesday’s breakout starts looking much more like a bull trap.

If we hold it and build above it, the breakout deserves more respect.

2) The 10-year needs to stop going higher

I don’t need yields to collapse.

I would happily settle for boring.

The 10-year around 5.27% is already a significant hurdle for valuations, housing, smaller companies and anything dependent on inexpensive financing.

The market has proven it can live with high yields.

I’m less convinced it can comfortably live with rapidly rising yields.

That distinction matters.

3) Small and midcaps need to participate

The S&P 500 Equal-Weight (RSP) and Russell 1000 Equal-Weight (EQAL) have both improved recently, but small caps remain inconsistent.

That is still one of the clearest contradictions in this market.

If yields have truly stopped rising, we should eventually see that reflected in the areas that have been hurt most by them.

Small caps would benefit enormously from stable or lower rates.

I don’t want to anticipate that rotation.

I want to see it.

4) Credit needs to confirm

HYG has bounced over the past few sessions.

Good.

Now I want to see that improvement continue.

I’m also watching high-yield spreads. If stocks are breaking to new highs while credit spreads remain contained or improve, the breakout becomes more convincing.

If spreads begin widening again while HYG weakens, I pay more attention.

The equity market does not need credit to lead.

But I would feel much better about the breakout if credit stopped arguing with it.

Today’s Test

I’m watching one level more than anything else:

S&P 500: 7,800

Hold it, and the breakout continues earning credibility.

Lose it briefly and reclaim it, no big deal.

Lose it decisively while the 10-year pushes toward its highs and credit weakens again, and I start paying more attention.

I don’t need to predict which one happens.

That is the beauty of having a level.

Remember the rule:

From failed moves come fast moves.

Failure is what we watch for now.

MEMBERS ONLY

The breakout is one part of the story.

The bigger opportunity is forming beneath it as AI demand moves from chips to power, grid infrastructure and financing.

Let’s dive in!

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Kirk’s Opportunities

Opportunities To Learn,
Grow, & Prosper

October 5, 2026

Stocks Climb In Spite Of Bond Yields

Stocks are off to productive start this week.

The Nasdaq 100 is seeing bullish follow through on its breakout to new highs. The S&P 500 is not far behind. Even the Russell 2000 is continuing to bounce for last week’s retest and defense of its 200 day moving average.

We shouldn’t be too surprised.

If you were keeping tabs last week, there was clearly the presence of risk-on rotation as growth continues beating value. High beta and momentum were among last week’s strongest factors. Technology led the sectors. Semiconductors led the thematic groups. Cybersecurity was right behind them.

That’s an interesting combination because it tells us investors haven’t exactly crawled into a bunker despite 5%+ Treasury yields.

They’re still taking risk.

However, they’re becoming much more selective about where they take it.

And increasingly, they’re choosing businesses connected to AI, computing, semiconductors and the infrastructure required to support them.

Higher rates aren’t killing the market. They’re separating it!

Companies capable of producing strong enough earnings and cash-flow growth are continuing to attract capital. Businesses that depend heavily upon cheap financing aren’t getting the same benefit of the doubt.

The vast majority of the swing strategy I track are now shifting long again.

Nasdaq 100 (QQQ)

S&P 500 (SPX)

Russell 2000 (IWM)

Equal-Weighted Opportunity?

Has breadth been so bad lately it is now an opportunity?

I know, wishful thinking, right? Especially since the S&P 500 Equal Weighted (RSP) is on a rare 7-week losing streak, pulling back to test its VWAP from the April low.

The last time it had a 7-week looking streak?

May 2022 as the bear market that year was beginning.

Will we see a repeat turn from here?

As we see the AVWAP from the April 2025 low was tested twice and both times buyers returned. It certainly appears this pullback is enticing dip buyers who have no interest in only obtaining “safe” 5% yields. Boring.

That’s why I watch these anchored VWAPs (AVWAPs) as they often will be the levels were buyers emerge and a reversal can begin.

The key will be to see sustained higher low, higher highs follow through strength being aggressively bought into instead of being sold at the first opportunity to do so.

S&P 500 Equal Weight (RSP)

S&P 500 Equal Weight (RSP) - 2 Year View

S&P 500 Equal Weight (RSP)

Smart Money Loves SpaceX?

SpaceX is seeing bullish follow through on the cup/handle pattern we’ve been tracking. In addition to positive launches and bullish analyst and social media commentary, an analyst called the stock cheap.

While concerns linger that those who are already heavily long this stock like Harvard will need to take profits in order to simply-diversify, the price action above the 21EMA and AVWAPs suggests the post-IPO retail investors are buying.

SpaceX (SPCX):

Strength Begets More Strength, Mostly

When the S&P 500 has gained at least 10% through September, history has usually favored more strength into year-end.

Since 1970, that setup has occurred 22 times. The market went on to rise during the fourth quarter in 18 of them, with an average gain of about +4% which would put the S&P 500 above 8,000.

Three of the four losing quarters barely qualified as losses, falling no more than -1.26%.

The fourth?

1987.

Markets do enjoy keeping at least one horror story around to make sure nobody gets too comfortable.

So no, history isn’t promising us a strong fourth quarter. But it is gently reminding us that a market already up double digits doesn’t automatically need a timeout.

Especially for a market that has been in consolidation mode with significant internal corrections within it for the past four months.

Members Only

Looking ahead to this “pre-earnings” week, there are a few additional things I’ll be keeping an eye on.

Let’s review.

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Kirk’s Opportunities

Opportunities To Learn,
Grow, & Prosper

October 3, 2026

Hi friends!

As the 4th quarter gets underway, there is a question on the minds of many:

Has the extensive consolidation since the 9-week fever dream which ended in early June finally run its course?

In other words, are better days and price action ahead?

While the stock market has lost momentum resulting in extreme levels of breadth divergences and deterioration, there are small signs of improvement out there if you are willing to entertain them.

After all, tight consolidation like this in an uptrend mostly breaks in the favor of the dominant, underlying trend.

Nasdaq 100: Breakout Or Bull Trap?

The QQQs just closed at a new all-time high. The bullish price action foundation for the breakout to continue +11% higher has been set through three consecutive bullish plays:

1) Inverse head & shoulders reversal targeting $807 & $829
2) Flag follow through targeting $768
3) New range breakout targeting $835

Upon near-term weakness, watch for first trailing at the climbing 21EMA and secondary support at the 50/100 moving averages. Many are likely to set their trailing stops around there on recent entries, depending on their risk tolerance and objectives.

Full disclosure: I am long the 2x TQQQ since September 21st as this first range reversal was put into motion. My game plan is to remain long unless we see price action indicating a failed breakout/bull trap which keeps this trading range intact.

BEARS VS BULLS

It is not a surprise the bears love this extreme narrow leadership:

Which causes me to question - is the bad breadth narrative been oversold?

Perhaps, if this continues to hook upward showing sustained improvement from extremely oversold.

Beyond everyone and your favorite breadth measurement, watch for more stocks reclaiming and holding above their moving averages, more breakouts working, more stocks and sectors beginning to participate, and leadership broadening to the laggards.

Citadel Chimes In

Last week Scott Rubner shared his research while mostly arguing that September may have reset the market for Q4.

Which of course tells us the mighty Citadel repositioned long again last month ahead of this quarter. :)

Nevertheless, Mr. Rubner always shares useful hedge-fund like observations. Including indications that leverage fell, retail cooled, systematic positioning dropped below neutral, and valuations compressed, while earnings, corporate buybacks, and seasonal flows are now beginning to move back into the picture.

If this sounds like wishful thinking, you’re probably sidelined and/or short!

If this sounds like he’s being too cautious, you’re probably aggressively long!

The real takeaway is not that Q4 should be easy. Rather, it is that any short-term volatility this October is likely an attractive risk/reward buying opportunity IF the market shifts away from being focused on the macro challenges to the fundamentals and earnings.

Read the whole thing!

Never Tell Me The Probabilities!

This just in and more from the trading desk of Lance Robert:

Wall Street Fears The Answer To This Question:

What happens when earnings growth merely becomes good instead of extraordinary?

Corporate earnings have been the market’s best defense against higher rates, sticky inflation, and rising bond yields. But with S&P 500 earnings growth expected to slow next year, an increasingly important question is emerging.

The answer depends heavily on AI spending, semiconductor margins, earnings breadth, and the U.S. consumer. Everything that Wall Street and investors will be watching as earnings begin to roll out this month and we begin to hear about what corporate America thinks is ahead of us not only this quarter but next year, too.

RADAR

The 4th quarter earnings picture looks much better than the breadth, will the Magnificent 7 someday be someday known as the Hateful 8? Micron looks cheap because investors seriously doubt these exceptional profits will last, 10 reasons why bond yields have soared, this year’s price action correlations favor buying the October dip, behold the Leopold stock tracker, and McConaughey shares a touching story.

MEMBERS ONLY

We’re seeing a positive start from all three plays currently on the opportunity list.

Let’s review where I think each one stands, where I’m personally positioned heading into next week, and why today’s market feels very different to me than the Internet bubble of the late 1990s…

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The S&P 500 is sitting just below a record high.

Roughly 40% of stocks are already more than 20% below their own highs.

Hard to believe, but both things are true.

That is the market we have right now: strong indexes sitting on top of a correction that has already done considerable damage underneath. Technology and mega-cap growth are holding the surface together while small caps, financials, real estate and other rate-sensitive areas absorb the punishment.

The question is no longer whether breadth is weak. We know it is.

The question now is whether the damage begins to repair — or finally reaches the stocks holding the indexes together.

Major Indexes

The headline indexes still look strong, but the table below shows how dramatically performance changes as we move down the market-cap spectrum.

The Nasdaq Composite gained +2.11% for the week and the Nasdaq 100 rose +3.19%, while the S&P 500 added +1.27%. But mid-caps were essentially flat at +0.01%, micro-caps fell -0.71%, and the Russell 2000 declined -0.75%.

The divergence becomes even more striking when we widen the lens. For the quarter, the S&P 500 and Nasdaq Composite are both up +3.29%, while mid-caps are down -5.34%, micro-caps -6.13%, and the Russell 2000 -6.15%.

That is the hidden correction in one table: the larger the company, the better the market has treated it.

S&P 500 Sectors

The sector picture tells the same story.

Technology gained +3.52% for the week and is now up +5.24% for the month, while Communication Services and Health Care also finished higher. At the other end, Utilities fell -3.87%, Energy -3.53%, Real Estate -2.28%, and Financials -1.83%.

Again, the longer view matters. Technology remains up +36.33% year to date, while Utilities are down -7.45%, Consumer Discretionary -7.41%, and Communication Services -4.04%.

The index-level strength is real, but it is being carried by a relatively small group of leaders.

Industry Groups: Where the Repair Is Starting

The industry-level picture gives us a better look at what may be changing beneath the surface.

Leadership is still clear. Semiconductors gained +5.86% for the week, while Quantum Computing rose +4.01%, Artificial Intelligence +2.87%, and Dynamic Media +2.89%.

But the more interesting development may be the early improvement in groups that have already absorbed substantial damage. Biotech gained +2.55%, Airlines +2.69%, and Homebuilders +2.00% for the week. Yet Airlines remain down -12.76% for the quarter, Homebuilders -14.92%, and Semiconductors -7.52%.

That is exactly what we want to watch now: not simply what is leading, but whether buyers are beginning to return to areas that have already corrected.

At the same time, Banks, Regional Banks, Insurance, Transports, Infrastructure and several other rate-sensitive groups remain weak.

So far, this looks like selective repair — not broad repair.

Large-Cap Growth Is Still Carrying the Load

The size and style breakdown makes the concentration even clearer.

Large Cap Growth gained +2.25% for the week, +2.64% for the month, and +4.18% for the quarter. No other size/style segment has remained positive across all three periods.

Large Cap Value is still up +2.19% for the quarter, but its recent momentum has weakened. Below large caps, the damage is much more obvious: Mid Cap Value is down -4.90% for the quarter, Mid Cap Growth -5.90%, Small Cap Value -4.54%, and Small Cap Growth -8.92%.

The market has not simply favored growth over value. It has increasingly favored size — and especially large-cap growth.

The Magnificent 7 Are Rotating Too

Large-cap growth is carrying much of the market, but even within the Magnificent 7 the strength is highly uneven.

META gained +12.90% for the week and is now up +33.44% for the quarter, while Microsoft advanced +4.53% for the week and remains the strongest Magnificent 7 stock for the quarter at +38.38%. Apple and Nvidia also remain positive across the week, month and quarter.

But not every mega-cap leader is participating. Amazon fell -1.59% for the week, Alphabet declined -0.97%, and Tesla remains down -11.53% for the quarter and -17.26% year to date.

Even within the market’s strongest area, leadership remains concentrated rather than universal.

Semiconductors Still Own the Tape

Semiconductors were the clearest source of strength. AMD gained nearly +10% Monday, reached another all-time high, crossed $600 and pushed its market capitalization above $1 trillion. Intel also rallied sharply, while memory stocks continued attracting strong demand.

The broader message matters more than any individual stock. Investors continue rewarding the companies viewed as essential to AI development, and so far even Treasury yields above 5% have not broken that leadership.

Price continues telling us where demand is strongest.

Mega-cap growth was nearly as important. META surged as enthusiasm around Muse accelerated, giving investors another glimpse of the shift from AI infrastructure spending toward actual consumer products and monetization.

Muse also offered a preview of the next stage of disruption. Insurance, travel and other consumer-facing businesses came under pressure as investors considered what happens when AI agents make it easier to shop, compare, cancel and switch providers. Some companies may ultimately find it better to participate in these ecosystems than compete against them.

There is another reason AI leadership matters so much now: the investment boom is becoming increasingly important to S&P 500 earnings themselves. Goldman Sachs estimates that nearly half of this year’s S&P 500 EPS growth is tied directly or indirectly to AI investment. AI is no longer simply a technology story; it is increasingly part of the earnings engine supporting the index.

The broader earnings backdrop is unusually supportive as well. The S&P 500’s Q3 bottom-up EPS estimate has risen 1.3% since the beginning of the quarter, when analysts normally cut estimates by roughly 2%–3% over the same period. Estimated Q3 earnings growth now stands near 29%, up from 26.7% at the end of June.

Corporate guidance tells a similar story, but with an important concentration underneath. 72 companies have issued positive Q3 EPS guidance versus 44 negative, yet 61% of those positive guides came from Information Technology.

The semiconductor numbers make the concentration even clearer. Information Technology earnings are expected to grow roughly 64% in Q3, with semiconductor and semiconductor-equipment earnings up about 126%. Strip semiconductors out and expected technology-sector growth falls to roughly 24%.

The chip complex is not simply leading price. It is carrying an outsized share of earnings growth as well.

The longer-term handoff will be critical. Eventually, AI-driven productivity and monetization will need to replace AI-driven construction as the source of earnings growth. If spending slows before that handoff occurs, the effects could extend well beyond semiconductors.

There is also an important distinction as the AI boom matures: self-funded AI leaders are very different from debt-dependent AI infrastructure projects. Demand is not necessarily the questionable part. Execution is. Power, financing, construction, permitting and interconnections all have to line up before contracted demand becomes operating revenue and free cash flow.

And as agentic AI moves from answering questions to taking actions, another opportunity is emerging. Security, identity, permissions, monitoring and governance are becoming increasingly important parts of the AI stack. The more autonomy these systems gain, the greater the need to control what they can access and what actions they can take — reinforcing cybersecurity as another beneficiary of the AI buildout.

5% Rates Are Sorting Winners From Losers

Interest rates were the week’s other dominant force. The 10-year Treasury yield began the week below 5% and finished near 5.2%, reaching levels not seen in nearly two decades.

Wednesday showed exactly where the pain lives. As yields surged, the S&P 500 fell 0.8%, the Nasdaq declined 1.1%, and the Russell 2000 dropped 1.8%. Utilities, real estate, homebuilders and other rate-sensitive groups were hit particularly hard.

Higher rates are not affecting every company equally. Businesses with strong balance sheets, abundant free cash flow and powerful secular growth have been considerably more resilient than companies dependent upon inexpensive financing.

They are not immune. They are simply less sensitive.

The inflation picture may also be more nuanced than the headlines suggest. Measures that strip out the recent energy shock point to underlying inflation closer to 2.4% year over year, arguing against a simple repeat of 2022. The larger market problem may be rates remaining high enough — or rising quickly enough — to keep pressuring weaker balance sheets.

If yields rise far enough or fast enough, even the strongest leaders can eventually come under pressure. Until that starts showing up in the tape, however, there is little reason to assume it must happen simply because the macro argument says it should.

AI may be contributing to the divide as well. Heavy investment is supporting economic activity while many of the largest beneficiaries are financially strong enough to absorb higher rates.

Interesting context.

But it is still context.

The Index Is Fine. The Average Stock Isn’t.

This is where the market gets much more interesting.

The latest breadth readings make the internal damage clear:

Above 10-day MA: 32.8%, +3.8 percentage points over five days
Above 50-day MA: 28.2%, -3.1 percentage points
Above 100-day MA: 34.8%, -3.6 percentage points
Above 200-day MA: 41.2%, -2.0 percentage points

But even those readings understate what has already happened.

The median S&P 500 constituent is roughly 16% below its own 52-week peak, and about 40% of stocks are already more than 20% below their highs.

Meanwhile, the S&P 500 itself is barely off its record.

That is the hidden correction.

Index concentration helps explain the disconnect. The top 20 S&P 500 stocks now carry roughly the same index weight as the bottom 480 combined, allowing strength in a relatively small number of companies to hide considerably more damage underneath.

Exceptionally low stock-to-stock correlation has helped too. Six-month realized correlation is reportedly near 5%, meaning large moves in individual stocks are often offsetting one another before they reach the index.

The danger is not low correlation itself.

The danger is what happens if a common pressure — most obviously another disorderly rise in yields — causes leaders and laggards to begin moving lower together.

We can see another version of that disconnect in volatility. Treasury volatility has already increased sharply while the VIX remains unusually subdued. Low stock-to-stock correlation has helped keep index volatility contained, but if rates begin affecting more stocks in the same direction, that cushion could disappear quickly.

The market may be storing up the potential for significantly greater volatility ahead.

Very short-term breadth is trying to improve. Friday’s advancing stocks beat decliners nearly 2-to-1 and seven of eleven sectors finished higher.

But the S&P 500 still produced 31 new lows against only three new highs, while Nasdaq recorded 175 new lows versus 54 new highs.

So Friday was better.

It just wasn’t enough.

Breadth improved. Breadth did not confirm.

Many individual stocks and rate-sensitive groups have already absorbed substantial damage while the remaining leaders continue holding together.

That puts us much closer to the decision point that matters.

The troops have already taken considerable damage. The question now is whether buyers return — or the last remaining generals get shot.

Money Is Coming Back — But Selectively

U.S. equity funds attracted $37.6 billion during the week, their first weekly inflow in five weeks and the largest since June.

But look where the money went.

Large-cap funds received $36.62 billion. Technology attracted $4.89 billion.

Small-cap funds lost another $1.02 billion.

Investors are not broadly buying weakness yet. They are still sending capital toward the areas already displaying strength.

If the internal correction is beginning to heal, we should eventually see that demand spread.

Credit Is Not Confirming a Bigger Problem — Yet

Credit offers an important counterpoint to all the weak breadth.

Absolute borrowing costs are already high, with investment-grade yields approaching 6% and leveraged loans around 10%, yet credit spreads remain relatively contained.

That suggests the market is dealing with expensive money rather than broad financial distress — for now.

The distinction matters. High Treasury yields pressure valuations and financing. Materially widening credit spreads would tell us something more serious is happening.

Until that changes, the evidence still looks more like a rolling correction than systemic stress.

Small Caps and Financials Still Have Something to Prove

The Russell 2000 finished the week lower despite the S&P 500’s gain, again demonstrating where higher rates are biting hardest.

Roughly 30% of smaller companies have variable-rate debt compared with only about 6% of large companies, making smaller businesses much more immediately exposed to rising borrowing costs.

That does not mean small caps cannot become attractive.

It means being down a lot is not, by itself, a reason to buy them.

Cheap can stay cheap. We want to see demand return.

Financials also declined 1.6% for the week, and the weakness has now erased the sector’s year-to-date gain.

Banks, regional banks, insurers and asset managers remain useful tells. If they begin repairing, that would be constructive. If they continue deteriorating, the pressure remains unresolved.

Oil Gave Us Relief. Now It Has to Hold.

WTI finished the week near $92, easing one of the pressures that had been pushing inflation expectations and Treasury yields higher.

But Friday’s relief now faces an immediate test.

President Trump said Saturday that he rejected Iran’s latest proposal to reopen the Strait of Hormuz and resume negotiations, reducing some of the diplomatic optimism that helped pressure oil late in the week. Iran’s proposal had linked reopening the strait to easing U.S. military and economic pressure.

Meaningful volumes of crude are still moving through Hormuz, so this is not the same thing as another supply shutdown.

Still, oil will be one of the first important prices to watch when trading resumes.

If crude quickly reverses Friday’s decline, rate and inflation pressures could return to the foreground.

If oil absorbs the news and stays contained, that tells us something too.

Cross-Asset Check

The weakness beneath the indexes deserves respect, but before concluding that something more serious is developing, it helps to look beyond stocks. If a broader risk-off transition were taking hold, we would expect to see confirmation from other asset classes as well.

Commodities

Commodities give us another read on inflation, global demand and investor positioning. Oil remains especially important because of its influence on inflation and interest rates, while metals and other commodities can tell us whether the message is broader than energy alone.

The longer-term strength remains concentrated in energy and the broader commodity complex. Energy is up +39.32% for the quarter and +109.10% year to date, while broad-based commodities are up +22.36% for the quarter and +45.89% year to date.

But the short-term picture is much less uniform. Crude oil fell -3.57% for the week, precious metals declined -2.06%, gold fell -1.93%, and silver dropped -2.99%, while natural gas moved sharply higher at +6.92%.

For now, commodities are showing rotation and crosscurrents rather than the kind of broad defensive move we would expect if investors were aggressively preparing for a major equity-market breakdown.

Currencies & Crypto

Currencies and crypto provide another useful look at global capital flows and risk appetite. The dollar and traditional safe-haven currencies can strengthen when investors become more defensive, while crypto often reacts quickly when appetite for risk changes.

The U.S. dollar gained +0.81% for the week and is up +5.88% year to date, while the Japanese yen and Swiss franc — currencies often associated with defensive positioning — failed to show comparable short-term strength.

Meanwhile, crypto moved in the opposite direction of a classic risk-off trade. Bitcoin gained +3.37% for the week, the broader crypto basket rose +3.91%, and Ethereum added +1.96%. All three have also posted substantial gains for the quarter.

A stronger dollar alongside rising crypto is an unusual combination, but it is not what we would expect to see if investors were broadly rushing for safety.

So far, the message is not one of broad risk aversion.

International Markets

International markets help us determine whether the concentration we are seeing in U.S. equities is part of a broader global pattern or primarily a domestic one.

There are pockets of impressive strength outside the United States. Singapore gained +2.23% for the week and is up +13.24% for the quarter, while Taiwan rose +2.81% for the week and remains up an extraordinary +80.67% year to date. Japan is also positive across the week, month and quarter, while China remains up +7.50% for the quarter despite recent weakness.

But this is not broad-based global strength. The World ex-U.S. index is up only +0.75% for the quarter, Europe is down -0.15%, and Emerging Markets are down -0.63%.

So the international picture looks much like the U.S. market: leadership exists, but it is selective. If that strength begins spreading while weaker areas of the U.S. market repair, it would support the idea that we are seeing rotation rather than the start of a broader breakdown.

The Hedges Aren’t Confirming a Broad Risk-Off Move

This may be the most interesting cross-asset test of all. If investors were becoming increasingly convinced that something much more serious was developing, we would expect traditional hedges and crisis-oriented trades to begin showing persistent relative strength.

So far, that confirmation is largely missing.

The exception is small caps. TZA, the leveraged Russell 2000 bear fund, is up +11.67% for the month and +19.89% for the quarter, reinforcing what we already know: considerable damage has occurred beneath the large-cap indexes.

But the broader fear trade has not taken hold. VIX-related products remain weak, while bearish bets against the Nasdaq, S&P 500 and FANG stocks have also failed to develop sustained relative strength.

That does not erase the weakness beneath the indexes. It tells us something more specific: the market is confirming stress in weaker areas, particularly small caps, but it has not yet confirmed a broad risk-off regime.

The Leveraged Bulls Are Telling the Same Story

The leveraged side of the market provides another useful confirmation of where strength remains concentrated.

FANG+ gained +8.31% for the week and is up +38.93% for the quarter, while the 2x Magnificent 7 fund gained +6.16% for the week and +23.61% for the quarter.

Leveraged S&P 500 exposure also remains positive for the quarter at +7.61%.

The contrast farther down the market-cap spectrum is striking. Leveraged Mid Caps are down -17.47% for the quarter, while leveraged Small Caps have fallen -19.64%.

Even when we turn up the leverage, we get the same message: large-cap growth is being rewarded while smaller companies continue to absorb the correction.

A Few Other Tells

Software remains selective rather than broadly strong. Companies tied most directly to AI infrastructure, agentic AI, cybersecurity and other areas where spending remains strong continue to attract interest, but investors are not indiscriminately buying the entire software complex.

The bond market also remains important. Treasury demand has been less enthusiastic as yields have climbed, and elevated bond volatility continues to contrast with relatively subdued equity volatility. That disconnect can persist, but it remains something we should watch closely.

Economic signals are mixed rather than recessionary. Unemployment claims remain low while consumer sentiment is weak, giving us another reminder that the economy, the markets and how people feel about them do not always move together.

None of these crosscurrents gives us the answer by itself. Price still does.

What This Week Really Told Us

The most important lesson from this week is that we do not have one market. We have several markets sitting on top of each other.

The S&P 500 remains near a record high, but roughly 40% of stocks are already more than 20% below their own highs. Large-cap growth continues to carry much of the load, while smaller companies and many rate-sensitive areas have already experienced substantial corrections.

The performance tables reinforce that conclusion from nearly every angle. Large Cap Growth is the only major size/style category positive for the week, month and quarter. Within the Magnificent 7, leadership is rotating rather than disappearing. And semiconductors continue to provide some of the strongest short-term momentum.

But we are also beginning to see hints of something potentially more important: repair.

Biotech, airlines and homebuilders were among the groups showing improvement this week despite substantial prior damage. Within individual stocks, names such as MCHP, TXN, CRDO, ALAB, AMGN, MRNA, COST and DAL are worth watching for additional evidence that buyers are beginning to return to previously damaged areas.

One good week does not make a trend. We want higher lows, reclaimed levels and follow-through. Stocks are not attractive simply because they have fallen.

The cross-asset evidence adds another layer. Commodities are mixed rather than signaling broad defensive positioning. The dollar strengthened while crypto also rallied. International leadership exists, but it remains selective. The traditional hedge and doomsday trades are not showing broad, persistent relative strength, with bearish small-cap exposure the notable exception.

Even the leveraged bullish products tell us the same story: large-cap growth is being rewarded while smaller companies continue to absorb the correction.

Put it all together and the market is giving us a surprisingly consistent message:

There has already been considerable damage beneath the indexes, but the evidence still looks more like a concentrated correction than a broad risk-off regime.

That makes the next phase especially important.

If damaged areas continue to repair while the existing leaders remain strong, the correction may be considerably further along than the major indexes suggest.

If that repair fails and the remaining leaders begin breaking down, the low-correlation cushion that has hidden much of the damage disappears.

We don’t need to guess. Price will tell us.

From Analysis to Action

We have now established the important part of the backdrop.

The indexes remain strong, the correction underneath them is real, leadership is concentrated but still intact, and there are early signs that buyers may be returning to some of the areas that have already absorbed the most damage.

That tells us where we are.

Now we need to decide what would make the next move actionable.

For members, we’ll turn the evidence into a practical roadmap for the week ahead: the developing S&P 500 reversal setup, the price levels that would confirm or weaken it, what we need to see from breadth and leadership, the catalysts that could move the market, and our legendary Bull, Base and Bear scenarios.

The market is close to giving us an answer.

The rest of this report is reserved for paying subscribers.

Below, I’ll lay out what would make this setup actionable, what could change my mind, and what will be front and center for me when the market opens Monday morning and throughout next week.

Members Only

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Thursday, September 24, 2026 | Kirk’s Opportunities

There is no shortage of pressure on this market.

Higher Treasury yields, elevated energy costs, and weak participation are giving investors plenty to worry about. Yet the major indexes remain comparatively resilient. The weakness beneath the surface has not translated into a decisive breakdown at the top.

Prices are holding relatively firm despite the pressure being applied to them.

The S&P 500 has partially retraced Monday’s opening gap without completely filling it.

Price also tested the 21-day exponential moving average area and closed above it.

Those are useful reference points for judging whether this is a pullback within a constructive structure or the beginning of something more damaging.

Neither the gap nor the moving average is magical. What matters is whether buyers continue defending this area and whether more stocks eventually join them.

For now, we should resist two temptations: dismissing the warning signs because the indexes have not broken, and assuming a breakdown must follow because the warning signs are numerous.

Respect the pressure. Respect the price. Do not confuse either with certainty.

MARKET CLOSE

S&P 500: 7704.13: −0.02%.
Nasdaq Composite: 26939.37: +0.01%.
Nasdaq 100: 30478.86: +0.03%.
Dow Jones Industrial Average: 51349.98: −0.31%.
Russell 2000: 2835.57: −0.11%.
S&P MidCap 400: 3637.83: −0.41%.

The closing percentages barely moved. The session was considerably more eventful than those numbers suggest.

MONEY FLOW

Communication services led, gaining approximately 1.9%, followed by healthcare at 0.7% and energy at 0.4%. Technology recovered from its early weakness but still finished slightly lower. Materials, utilities, and consumer staples each lost approximately 1%, while industrials declined 0.7%.

This was not a simple rotation into safety. Traditional defensive sectors did not automatically provide protection, and technology did not move as one block.

Biotech also deserves attention. The Nasdaq Biotechnology ETF gained approximately 1.3%, while regional banks recovered, with KRE gaining approximately 0.8%. That was an important exception to the broader pressure we have been monitoring in rate-sensitive businesses.

Use sector themes to organize the research—not to override what individual stocks are doing.

BENEATH THE SURFACE

Thursday’s recovery did not repair participation.

Declining stocks still outnumbered advancing stocks by nearly two to one on the NYSE and roughly three to two on Nasdaq. New 52-week lows substantially exceeded new highs. That is a much weaker picture than the nearly unchanged major indexes suggest.

Two observations can be true at the same time: the major indexes are holding together, while many individual stocks remain under pressure. Additionally, a number of high-yield ETFs have reached 52-week lows, but credit spreads were only around where they stood a week earlier. Falling bond prices are therefore not, by themselves, proof of an accelerating credit crisis.

We should keep watching HYG while distinguishing pressure from higher Treasury yields from a deterioration in the extra compensation investors demand for credit risk.

Caution remains justified. A more severe conclusion requires stronger evidence.

THE MACRO CHAIN GETS TESTED

Oil → Inflation → Fed → Yields → Valuations → Breadth → Price.

Reports of discussions around a phased reopening of the Strait of Hormuz helped stocks recover from their morning weakness. Those were reports of negotiations—not confirmation that an agreement had been completed or shipping conditions normalized.

Oil’s retreat from its intraday high was helpful, but the distinction matters: WTI still settled higher on the day, gaining approximately 2.4% to $94.68. A retreat from the high was not the same thing as the energy problem disappearing.

Treasuries offered less relief. A soft seven-year auction contributed to renewed selling, and the 10-year yield finished around 5.16%.

Our working interpretation remains that 5%+ yields are separating the market rather than simply sinking it.

That makes our investment filter especially important:

Own businesses capable of growing profits faster than the pressure created by higher rates.

We want strong earnings growth, cash generation, pricing power, durable competitive advantages, and expanding markets—not simply an attractive theme.

That does not make valuation irrelevant. A strong business can still become a poor investment when the entry price assumes too much.

RISK DASHBOARD

Overall: flashing caution, with selective opportunities—not a blanket instruction to buy or sell.

IMPORTANT STOCK MOVES

Meta Platforms (META): +4.50%. Continued enthusiasm around Muse and its potential monetization helped the stock reach a new year-to-date high. Investors are rewarding the company-specific growth story despite the rate backdrop. Expectations are rising alongside the share price.

Advanced Micro Devices (AMD): +2.38%. AMD recovered from its early weakness and finished near the session high. The strength was notable as we see this as an opportunity worth pursuing.

Hewlett Packard Enterprise (HPE): +1.91%. HPE reached a fresh 52-week high during the session, although it surrendered part of that advance before the close. Holding subsequent pullbacks would strengthen the relative-strength case.

Moderna (MRNA): +6.98%. MRNA’s advance, alongside Eli Lilly’s 2.85% gain, helped healthcare provide leadership outside the largest technology stocks. The next test is whether that strength becomes more sustained and widespread.

Oracle (ORCL): −3.48%. Reports involving a force-majeure notice at a New Mexico data-center project put construction and delivery risk back in focus. Strong AI demand does not eliminate the practical challenges of meeting it.

AI: DEMAND STILL HAS TO BECOME CASH FLOW

Nscale’s IPO disclosures offer a useful illustration.

The company reported approximately $103.4 billion in active and contracted total contract value, but only $2.6 billion was attached to active contracts. Neither figure represents current annual revenue. Revenue for the six months through June was approximately $140.6 million, while the net loss was approximately $1.02 billion. Much of the future opportunity still depends on financing and delivering the infrastructure. (The Register)

Those figures do not prove the business cannot succeed. They show why we should not treat a contract announcement, an operating data center, recognized revenue, and shareholder cash flow as interchangeable.

For our research, the chain is:

Demand → Financing → Power → Permitting → Construction → Deployment → Return on invested capital.

A bottleneck anywhere along that chain can delay the economics.

The better question is not, “How big is the AI opportunity?”

It is, “How much of that opportunity can this business convert into durable cash flow—and what are we paying for it?”

MIXER

The AI Shopping Fight Is About Access. Amazon’s move to block Muse contrasts with Shopify’s welcome for Meta’s shopping agent. The investment question extends beyond which assistant becomes popular: when an agent handles discovery and checkout, who retains the customer relationship—and who gets paid? (The Wall Street Journal)

More Agents, More Identities to Control. Okta’s latest announcements extend its security framework toward identifying agents, controlling permissions, monitoring activity, and cutting off access when something goes wrong. Some capabilities are available now; expanded runtime kill-switch functionality remains planned. The opportunity is more autonomous activity that enterprises must govern. (Okta)

Big Tobacco still finding ways to win. Did you know Altria (MO) and Philip Morris (PM) are up more than 20% year-to-date and have price structures pointing for additional gains? The FDA is expected to announce in coming days that it will revisit its rules to speed up the authorization process, people familiar with the matter said. These possible changes are most important for newer products, such as vapes and nicotine pouches. (WSJ)

Costco Gives Us a Fresh Consumer Check. Costco’s after-hours results showed quarterly net sales rising 11.2% and comparable sales increasing 6.7% after excluding gasoline-price and currency effects. Reported earnings of $6.75 per share included a $0.15 nonrecurring benefit. Friday’s stock reaction will help show whether those operating results are sufficient for investors’ expectations. (Costco)

Mark Minervini Lays The Groundwork: According to today’s tweet, “this remains a highly bifurcated and selective market. The major capitalization-weighted indexes can give the appearance of broad strength even while a significant portion of the market is behaving considerably worse underneath. Until breadth improves, new highs expand, and leadership broadens beyond a concentrated group of names, I would continue to treat the strength in the headline indexes with a degree of skepticism and caution.”

Disruption of the status quo? Those who prefer the status quo are likely feeling a wee bit anxious these days. The US mid-term elections on November 3rd are fast approaching and, at this point, the Democrats are expected to take the control of the House and even the Senate. However, there is still October left, and the chance for the Republicans to improve their chances of retaining at least of control of the Senate. Thus, some have argued the Republicans may need to conjure up an “October surprise” to block a blue sweep. (MSN)

Be Careful What You Wish For! We all want more affordable housing, but as stock investors, we need to watch how we get there. Improving affordability through rising incomes and greater supply is one thing. Getting there because housing is cracking under economic pressure is another. As the always-astute Mark Ungewitter warns today, this is not a bullish divergence for stocks. When housing cracks, hold on to your @$$.

The September Low Is Already In? Based on $SPX 50-year average annual returns, the calendar is approaching an area that has historically marked a seasonal low before a stronger finish to the year. (via Rachel Dashiell)

The AI Stock-Picking Test Starts Here. Our six-system comparison begins with today’s closing prices. Each ten-stock hypothetical portfolio starts equally weighted and remains unchanged through December 31, with no rebalancing or substitutions. Returns will include reinvested dividends and stock-split adjustments, excluding fees and taxes. Below, I explain why tracking the agreement among these systems interests me as much as tracking their performance. (Six AI Systems. Sixty Stock Picks.)

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Which 10 stocks do you think will outperform the most between now and year end?

Below are their selections in the order supplied—not necessarily ranked by conviction. Then we’ll see where they agreed and who went their own way.

The Popularity Contest

Sixty selections. Thirty-four different stocks. Not one unanimous pick.

Each selection gets one vote; equal counts are ties.

Micron and Nvidia take the crown.

Gemini was the only system to skip Micron.

Claude was the only one to skip Nvidia.

Broadcom and Meta Platforms complete the four-stock majority group. Add AMD, Amazon, and Vertiv, and we have seven names selected by at least half the systems.

There’s no clean consensus top ten: six stocks are tied at two votes. The bots gave us a tie, not permission to invent a tiebreaker.

The “Nobody Else Picked This” Club

Twenty-one of the 34 stocks appeared on just one list.

Here’s who went solo on what:

ChatGPT went furthest off-script, with six exclusive selections. Its first three selections—SKHY, CRDO, and ALAB—received no votes from the other five systems.

Copilot was the consensus shopper: nine of its ten selections appeared elsewhere.

And Apple landed on only one list. “Exclusive” in this exercise clearly doesn’t mean “undiscovered.”

Three Things That Jump Out

1. Copilot and Grok brought almost the same shopping list. They shared seven picks: NVDA, AMD, VRT, MU, AVGO, META, TSM. Their combined 20 selections contain only 13 different stocks.

2. Claude was the least like the others. Although ChatGPT had more exclusive names, Claude’s entire list overlapped least with the other systems—averaging just two shared stocks per comparison.

3. ChatGPT’s omissions are as interesting as its selections. Broadcom and Meta Platforms appeared on four other lists but missed ChatGPT’s entirely. Remove ChatGPT’s votes, and AVGO, META, MU, and NVDA all tie for first place among the remaining five systems.

That leaves us with a clear consensus at the top—and plenty of disagreement underneath.

FWIW, in my own tracking over the past two years, one AI has delivered nearly twice the cumulative return of its closest competitor.

Which AI is it?

ChatGPT.

I’ll use today’s closing prices as our starting point, and on December 31 we’ll come back to see who came out on top!

For this comparison, each list will begin as an equally weighted hypothetical portfolio using the September 24, 2026 closing prices. We’ll hold all ten selections unchanged through the December 31, 2026 close and compare total returns in U.S. dollars, including reinvested dividends and adjustments for stock splits. There will be no rebalancing or substitutions, and returns will exclude fees and taxes.

Good luck to everyone currently trimming, repositioning, and setting up their portfolios to grow and prosper in the fourth quarter and into next year!

— C.E. Kirk

The 10-year Treasury yield is testing its third-deviation area, a zone that has repeatedly proved difficult to sustain during this uptrend.

Wednesday wasn’t really about the S&P 500 falling less than 1%.

It was about the 10-year Treasury yield pushing through 5%, oil moving back above $100, breadth deteriorating and small caps getting hit considerably harder. The closing percentages understated what changed beneath the surface.

The bond market delivered the clearest warning. Higher energy costs are again feeding inflation concerns. Strong economic activity is giving the Fed less reason to back away. Treasury buyers demanded more yield. And the 10-year surged to 5.113%.

But there was another side to Wednesday’s tape.

Several stocks and groups simply refused to participate in the selloff.

That’s where things get interesting.

The hurdle for stocks just got higher. Now we want to know whether Wednesday’s deterioration receives confirmation—and whether the stocks already fighting against it are showing us where the next opportunities may be developing.

MARKET CLOSE

S&P 500: 7706.03: -0.75%.
Nasdaq 100: 30470.29: -0.85%.
Dow: 51511.59: -0.68%.
Russell 2000: 2838.66: -1.77%.
S&P MidCap 400: 3652.74: -0.61%.

The averages tell us stocks had a bad day.

For the S&P 500, a quick throwback to this week’s bull flag-like break.

Yet, as we’ve seen before, the major indexes don’t tell us nearly enough.

MONEY FLOW

Wednesday was a terrific example of why we don’t want to treat “the market” as one trade.

Selling was broad, with decliners overwhelming advancers, but beneath that pressure were pockets of remarkable relative strength.

Cybersecurity stood out immediately. Palo Alto Networks (PANW), CrowdStrike (CRWD) and Fortinet (FTNT) fought the tape. Software and technology names including VEEV, PLTR, NOW, WDAY, CRM and CDNS also showed relative strength. Energy names such as APA, DVN and COP benefited from renewed strength in crude.

Meanwhile, smaller companies were hit considerably harder, and several consumer-facing areas continued deteriorating.

The new-high/new-low list made the dispersion particularly easy to see.

New highs: ABBV, AMD, CRWD, DE, FFIV, FTNT.

New lows: AZO, LHX, STZ, LVS, WYNN, MCD, CCL, TMUS, NCLH, RCL.

Cybersecurity was showing up on one side.

Cruise lines and casinos were showing up on the other.

That’s dispersion.

And dispersion creates opportunities for active investors willing to look beneath the indexes.

Disclosure: I currently own CRWD and NET.

BENEATH THE SURFACE

The headline indexes remain relatively close to their highs.

A growing portion of the market isn’t behaving that way.

The breadth work we’ve been following shows the recent bounce becoming increasingly concentrated. Fewer stocks are carrying more of the load while participation underneath continues deteriorating.

Small caps reinforced the warning Wednesday.

The Russell 2000’s potential bear trap from Tuesday didn’t survive. Sellers regained control and pushed the index toward its 150-day moving average, an area it hasn’t tested since the March-April period.

The moving average itself isn’t magical.

What matters is that smaller stocks continue confirming weakness the large-cap averages are partially concealing.

Credit belongs in this conversation as well.

Junk Bonds (HYG) fell 0.72% Wednesday and made another 52-week low. That doesn’t signal a credit crisis, but it isn’t the confirmation we would want to see from credit while the major indexes remain relatively close to record levels.

Put another way:

The indexes haven’t cracked. Several things beneath them already have.

One way to see that is through stage analysis in which we are seeing more stocks move away from a stage 2 uptrend below the mega cap market cap.

THE MACRO CHAIN GETS TESTED

We’ve been using a simple framework:

Oil → Inflation → Fed → Yields → Valuations → Breadth → Price

Wednesday ran almost directly through it. Business activity remained strong, but input-price pressures also increased as fuel and transportation costs rose.

Strong economic activity itself isn’t bearish. The complication comes when resilient growth combines with renewed inflation pressure.

That gives the Fed less room.

Then oil moved back above $100. Fed expectations hardened. Treasury demand disappointed. And the 10-year pushed to 5.113%.

That’s the development we need to respect.

But there is another side.

The 10-year is now pressing into the third-deviation area on our chart. Previous trips this far from trend have not been sustainable for long.

That doesn’t guarantee yields reverse here. It tells us we’re approaching an important test.

If oil retreats, yields fall back below 5% and credit stabilizes, Wednesday could eventually look like another pressure extreme.

If those things don’t happen, equities may have considerably more adjusting to do.

Especially during this window of opportunity for the bears to take control.

After all, we are right in the middle of Fat Bear Week!

RISK DASHBOARD

Breadth: Deteriorating. The averages continue to conceal greater weakness underneath.

High-Yield Credit: Weakening. HYG made another 52-week low.

10-Year Yield: 5.113%. The most important near-term pressure point.

Oil: Brent back above $100. Renewed energy inflation feeds directly into the Fed/yield discussion.

Dollar: Strengthening, with a bullish reversal attempt worth monitoring.

Small Caps: Under pressure and testing deeper support.

Leadership: Narrow, but definitely not absent.

That last one matters.

WHO REFUSED TO GO DOWN?

Bad tapes can be excellent research tools.

When sellers are throwing almost everything overboard, we want to know which stocks investors simply refuse to give up.

Wednesday’s relative-strength list included:

PANW, CRWD, VEEV, APA, IR, PLTR, NTAP, ZBRA, FTNT, DVN, NOW, COP, WDAY, CDNS, ICE, CRM, CASY.

Several clusters stand out.

Cybersecurity: PANW, CRWD, FTNT.

Software/Technology: VEEV, PLTR, NOW, WDAY, CRM, CDNS, NTAP.

Energy: APA, DVN, COP.

This isn’t a buy list.

It’s a research list.

CRWD’s strength was especially welcome because it is already one of our existing positions. PANW and FTNT deserve further attention after refusing to follow the broader market lower.

Intel (INTC) also caught our attention.

It didn’t need to finish among Wednesday’s biggest winners. What mattered was how it traded intraday, absorbing selling pressure and showing signs of quiet accumulation while much of the market remained under pressure.

Observation first.

Action later.

MIXER

Quantum Gets Another Catalyst. Quantum stocks received another burst of attention around Quantum World Congress. IonQ (IONQ) said its next-generation systems will be the first installed at Nvidia’s new quantum research center, while Microsoft opened its technology to independent evaluators. The announcements add substance to a sector still dominated by expectations rather than commercial earnings, so the next test is whether conference excitement produces lasting business progress.

More Equity Supply Is Arriving. This chart shows net equity issuance turning sharply positive. More shares entering the market doesn’t automatically cause stocks to decline, but when marginal demand is already weakening, greater supply can make corrections move faster. Consider it another liquidity input rather than a standalone bearish signal.

Fuel Inflation Isn’t Just About What We Pay at the Pump. Rising diesel, heating-oil and transportation costs can work their way through supply chains and eventually into selling prices. That’s why oil has become more than an energy trade again. It sits near the beginning of the Oil → Inflation → Fed → Yields chain we’re monitoring.

Today in Markets History — LTCM. On this day in 1998, Wall Street’s largest investment banks completed a $3.65 billion rescue of Long-Term Capital Management after the hedge fund lost nearly $2 billion in one month. Sophisticated models, enormous leverage and positions assumed to be diversified proved considerably less independent once everybody needed liquidity at the same time. One of the many examples throughout history showing us that the people were thought they were smarter than the market turned out to have no clothes when the tide went out.

Time to be scared? Its that season once again where everyone tries to make you very afraid, especially pundits looking to hawk their books to feed upon your fears! This just in, in case you want to lose some extra hours of sleep tonight….

Satyajit Das argues that stretched valuations, $348 trillion in global debt, higher refinancing costs and links between banks, private credit and other investors leave markets vulnerable to a shock. He warns that forced selling could spread quickly while market liquidity and government support may prove inadequate. (MarketWatch)

MEMBERS ONLY

The market gave us warnings today—but it also surfaced a new opportunity worth digging into.

Below the paywall, I’m breaking down SK Hynix (SKHY), why it keeps appearing in my research, what stands out about its valuation and position in one of AI’s most important bottlenecks, and the bullish technical setup now developing on the chart.

Most importantly, we’ll look at the levels that could move SKHY from interesting to actionable—and what would tell us the setup isn’t ready.

Paid members continue below.

Read more

The Nasdaq did its job Tuesday: it followed Monday’s breakout with another gain and closed at a new high. The S&P 500 went nowhere and the Dow declined. Semiconductors, memory and AI infrastructure remain firmly in control, but small caps, midcaps and several non-technology sectors finally showed some life.

That’s where things get interesting. Breadth is still unusually weak for indexes this close to record highs, but some of the biggest obstacles are starting to ease. Oil is falling, the 10-year yield is back below 5%, and small caps are beginning to improve.

The market is not fully repaired. But the setup is getting harder to dismiss.

The next move could tell us whether this remains a narrow Nasdaq story—or starts becoming something much bigger.

THE SCOREBOARD

S&P 500: 7764.64: essentially unchanged
Nasdaq 100: 30640.22: +0.52%
Dow: 51863.69: -0.36%
Russell 2000: 2889.92: +0.51%
S&P MidCap 400: 3664: +0.4%

The indexes, however, missed much of what happened underneath.

WHERE THE MONEY WENT

Semiconductors

The PHLX Semiconductor Index gained roughly 2.1%, extending its run to six consecutive sessions.

Monday’s AI-led surge did not immediately reverse. Buyers continued adding exposure.

Memory & Storage

SNDK, STX, MU were again among the stronger stocks.

Memory and storage increasingly look like another expression of the AI infrastructure trade as inference demand expands alongside compute.

AI Power Infrastructure

MPWR and VICR strengthened sharply.

Power delivery remains one of the less obvious but increasingly important beneficiaries of rising AI compute density.

Beyond AI

Materials, consumer staples, health care and homebuilders also participated, while the Russell 2000 and S&P MidCap 400 finished higher.

AI dominated leadership, but Tuesday was not exclusively an AI rally.

AI LEADERSHIP — STAY WITH THE WINNERS

The evidence continues to favor semiconductors, memory, cybersecurity and selected AI software rather than indiscriminate AI exposure.

Names repeatedly showing relative strength include NVDA, AMD, AVGO, SNDK, MU, SNOW, NET, TWLO, PLTR and selected cybersecurity names.

That does not mean we chase them after several strong sessions.

It means we identify the strongest groups, let extended stocks digest their moves, and look for controlled pullbacks or tight consolidations that give us a better risk/reward entry.

Strong theme does not automatically mean attractive entry.

WHERE THE MONEY LEFT

Financials

Financials were Tuesday’s clearest weak spot.

XLF fell roughly 2%, SCHW dropped more than 6%, while JPM, WFC, ALL and other financial names came under pressure.

Two issues entered the discussion: the flatter Treasury curve and the possibility that increasingly capable AI agents eventually disrupt portions of wealth management, insurance and financial distribution.

For now, financials remain one of the clearest groups failing to confirm the Nasdaq’s strength.

THE REAL STORY: DISPERSION

Tuesday was neither broadly bullish nor broadly bearish.

The Nasdaq reached another record.

Semiconductors surged.

Financials were hammered.

Small and midcaps advanced.

Several sectors outside technology participated.

And at the individual-stock level, very strong winners existed alongside very weak losers.

That may be the best picture of Tuesday’s market.

The unchanged S&P 500 concealed enormous movement underneath.

For active investors, stock and industry selection mattered far more than the headline index return.

BREADTH CHECK

This remains the contradiction we cannot ignore.

Price is improving faster than the market underneath it.

The S&P 500 is near its highs, yet more constituents have recently been making 52-week lows than highs. Growth versus value has also surged sharply, reinforcing how selective leadership remains.

Tuesday offered some encouragement. Small and midcaps advanced, several sectors participated beyond technology, and advancers improved.

But broader confirmation remains incomplete.

The outcome we want is straightforward:

More stocks improve toward the indexes—not the indexes eventually fall toward weak breadth.

For now:

Participation is improving. It has not yet been repaired.

TWO MACRO PRESSURES ARE EASING

Oil and Treasury yields have been two of the most important pressure points in our recent framework.

Now both are backing away.

Brent: below $100
WTI: around/below $95
10-year Treasury: below 5%

The exact daily ticks matter less than the change in direction.

The recent combination of $100+ oil and a 5%+ 10-year yield was working against valuations. That combination has started to unwind.

The chain becomes friendlier if that continues:

Oil ↓ → Inflation pressure ↓ → Fed pressure ↓ → Yields ↓ → Valuation pressure ↓

That does not solve every market problem, but it removes an important headwind.

AI IS DISRUPTING AGAIN

Agentic AI is becoming much bigger than an AI-stock story.

Meta’s Muse is forcing investors to rethink businesses that benefit from consumer friction.

The emerging question is no longer simply:

Who uses AI?

It is:

Whose economics depend upon customers being too busy, uninformed or unwilling to shop around?

Insurers, telecom providers, subscription businesses, travel platforms and financial services could all face pressure if agents can continuously comparison-shop, cancel subscriptions, renegotiate bills and switch providers.

That could eventually become an investment framework of its own:

Agentic AI → less consumer friction → winners and losers across entire industries.

At the same time, the enormous capital required to build AI infrastructure is pushing credit quality, leverage and free cash flow higher on our list of things to monitor.

AI is simultaneously becoming a bigger opportunity—and a more demanding financial exercise.

IMPORTANT STOCK MOVES

AI Infrastructure / Leadership

Micron (MU): +5%. Memory emerged as one of the strongest areas of the AI infrastructure trade. The broader implication is that investors increasingly expect inference demand to benefit memory alongside compute.

SanDisk (SNDK): nearly +7%. Continued strength adds another piece to the memory/storage side of AI infrastructure.

Monolithic Power Systems (MPWR): roughly +8%. Power delivery remains one of the less obvious beneficiaries of growing AI compute density.

Vicor (VICR): +13.7%. A sharply improved revenue outlook tied to Vertical Power Delivery royalties reinforced the AI-power infrastructure theme.

Financials

Charles Schwab (SCHW): -6.1%; JPMorgan (JPM), Wells Fargo (WFC): more than -3%. Financials became Tuesday’s major weak spot as investors reacted to the flatter yield curve and concerns that AI agents could eventually disrupt portions of financial distribution and wealth management.

Health Care

Viking Therapeutics (VKTX): +30.7%. Strong VK2735 maintenance data showed patients preserving most prior weight loss with less frequent dosing, strengthening the company’s competitive positioning in obesity drugs.

Consumer

On Holding (ONON): +10.2%. Management targeted at least CHF 5.6 billion in 2029 sales, a 22% adjusted EBITDA margin and announced a $1 billion repurchase authorization.

After Hours

KB Home (KBH): weaker after hours. Fiscal Q3 EPS of $1.05 beat expectations and $1.30 billion of revenue was roughly in line, but revenue declined 20% year over year and the full-year sales outlook came in below consensus.

HOW WE’RE APPROACHING IT

Strong indexes do not require us to become aggressively bullish everywhere.

We can respect the breakout while remaining selective. In fact, a market with large differences between winners and losers makes selectivity more valuable.

The response is not to chase stocks already extended after several strong sessions.

We want to identify the strongest groups, wait for controlled pullbacks or tight consolidations, and then average up when the market confirms our hypothesis.

That keeps us participating without pretending risk disappeared.

LEARN & GROW

Technology Humiliates Certainty

One of the hardest things about investing in technological change is that even brilliant people can be right about the direction and completely wrong about the timing—or wrong altogether.

History is full of examples.

The lesson for us is simple:

Avoid false precision.

We do not need to know exactly what AI will look like in five or ten years to recognize that it is changing where capital is being spent, where bottlenecks are forming, and which companies are gaining or losing economic relevance.

As active investors, our job is not to predict the future perfectly.

It is to watch what is actually happening, follow the evidence, and adjust as the technology and the market reveal themselves.

Takeaway: Be open-minded about transformative technology, skeptical of confident timelines, and willing to update when reality disagrees with the forecast.

MIXER

Goldman thinks markets may be too hawkish. Goldman economist Jan Hatzius expects another Fed hike in October, but argues markets may be extrapolating the recent inflation shock too far. His view is that recovering Middle East oil exports and fading temporary inflation pressures could limit how much further the Fed ultimately tightens. For us, the chain remains simple: Oil → Inflation → Fed → Yields → Valuations → Breadth → Price. If oil keeps falling and yields stabilize, an important market headwind weakens. (Source: Dark Side Of The Boom / Goldman Sachs)

Tom Lee sees a test of the Fed’s hawkish turn. Lee argues that September’s market churn and the recent rate hike may have created a more favorable risk/reward setup if inflation cools and the Fed eventually softens its tone. The next important tests arrive with PCE inflation on September 30 and the September jobs report shortly afterward. Cooler inflation alongside steady employment would strengthen the thesis; persistent price pressure would challenge it. (Source: Tom Lee)

AI concentration is still a vulnerability. Since ChatGPT launched, roughly three-quarters of the S&P 500’s market-value increase has come from about 20 companies, most tied closely to the AI theme. That concentration has rewarded investors while leadership remains strong, but it also increases the market’s dependence on a relatively small group of stocks. (Source: Bloomberg)

China’s AI-compute ambitions are accelerating rather than fading under export controls. Alibaba’s Zhenwu V900, enormous model plans and 20-GW data-center target reinforce the idea that U.S.-China AI competition will continue driving capital spending.

Edge/on-device AI could become another important branch of the investment cycle. Apple is pitching new high-end Macs as a cheaper alternative to continually renting cloud AI capacity, with systems capable of running large models locally and avoiding per-token charges. That introduces another potentially important branch of the AI cycle: moving inference from expensive centralized clouds toward local computing. (Source: Reuters)

Muse may be turning agentic AI into a genuine economic platform. Roughly 2.8 million downloads in 12 days, premium subscription tiers, Shop Pay integration and PayPal connectivity mean we can finally begin discussing agent revenue and transaction volume, not merely AI engagement.

Cybersecurity may be one of the best second-order AI themes. Palo Alto’s new service uses frontier AI models offensively to discover vulnerabilities before attackers do. As agents gain more permissions—to buy, browse, access corporate systems and eventually control physical processes—the Secure layer becomes more valuable, not less. If you don’t already own exposure to this industry, you should.

Earnings still have the final say. Debt, inflation, geopolitics and rates matter most when they eventually affect corporate earnings. With valuations elevated, the bigger risk is not simply another bearish headline—it is that forward earnings estimates begin rolling over. As long as earnings expectations remain strong, the market retains fundamental support. If they weaken materially, elevated valuations become much harder to defend. (Source: Lance Roberts)

FOMO may be returning—and AI may be entering its next phase. Goldman’s Rich Privorotsky noted an unusual combination Monday: the Nasdaq rose while implied volatility also increased. Normally volatility falls when stocks rally, so rising together can signal investors are paying up for upside exposure. More interestingly, the AI opportunity may be expanding beyond chips, memory, networking and power into the commercial rails agents need to act—payments, settlement networks, proprietary data and systems of record. The first AI phase rewarded companies building the machines; the next may increasingly reward the infrastructure those machines must use. (Source: Dark Side Of The Boom / Goldman Sachs)

Bitcoin’s nearly $1 billion ETF inflow gives Monday’s breakout more credibility. Price moves driven primarily by short covering can disappear quickly. Broad ETF demand from IBIT, ARKB and FBTC suggests institutional capital was participating at the same time. Holding $85000 would strengthen that evidence further.

Saudi Arabia’s pipeline restart matters more than another geopolitical headline. The market has spent weeks worrying about physical energy constraints. Restoring a route capable of bypassing Hormuz changes actual supply logistics rather than merely sentiment. That helps explain why oil fell despite unresolved regional risk.

KB Home is a reminder that falling oil does not solve affordability. Mortgage rates remain high, revenue fell 20%, and orders declined 12%. Housing could improve if long yields continue falling, but the operating data do not yet say the affordability problem is over. That said, Berkshire Hathaway has been buying millions of shares of homebuilder Lennar (LEN), attempting to carve out a bottom. Good luck Greg Abel!

WEDNESDAY’S CATALYSTS

Tomorrow’s two biggest catalysts for us: PMI in the morning and Meta Connect after the close.

S&P Global Flash U.S. PMI — 9:45 a.m. ET

This is tomorrow’s most important scheduled macro release.

We’ll be watching manufacturing and services activity, but especially input costs, selling prices, hiring and whether services remain strong without another acceleration in inflation.

Earnings Before the Open

Cintas (CTAS), Paychex (PAYX), General Mills (GIS), Cracker Barrel (CBRL).

CTAS and PAYX can provide useful reads on employment, wages and business activity, while GIS and CBRL offer another look at consumer demand and pricing.

Federal Reserve Governor Michael Barr

Any comments touching on inflation, rates, housing or the broader economic outlook could matter given the market’s sensitivity to Treasury yields and monetary-policy expectations.

Meta Connect — 4:00 p.m. PT

This may be Wednesday’s most interesting company-specific catalyst following the reaction to Muse.

We’ll be watching:

• AI

• Muse

• Agentic commerce

• Wearables

• Smart glasses

• Monetization

The larger question is whether Meta gives us additional evidence that AI products are moving from heavy investment toward measurable economic activity.

SCENARIO FRAMEWORK

Bull Case: S&P 500 clears 7816, SPY holds above 775, Nasdaq 100/QQQ maintain leadership, new highs begin exceeding new lows, RSP and IWM improve, oil remains contained and the 10-year stays below 5%. (40% probability)

Base Case: S&P 500 remains between 7620 and 7816 while AI and semiconductor leadership continue producing opportunities but breadth, financials and the Fed prevent a clean broad-market breakout. (45% probability)

Bear Case: S&P 500 fails again near 7816, loses 7620, oil and yields reverse higher, HYG weakens and the remaining AI leaders begin rolling over. (15% probability)

What Would Weaken the Setup?

A rejection around 7816 is manageable.

A rejection followed by a loss of 7750 would deserve attention.

A subsequent loss of 7620 would be considerably more important.

The bigger warning remains:

Breadth deteriorates + HYG weakens + 10-year >5% + oil >$100 + AI leadership breaks.

If financial weakness spreads into semiconductors and mega-cap technology, the quality of the entire market changes.

THE TAKEAWAY

Tuesday reinforced a market that is improving on price faster than it is improving underneath the surface.

The Nasdaq is making new highs. Semiconductors, memory and AI infrastructure continue leading. Small caps may be trying to repair. Oil and Treasury yields are moving in the market’s favor.

But breadth still needs to prove itself, financials are sending a different message, and many of the strongest stocks are already extended.

Our approach remains straightforward:

Follow the strength. Let breadth prove itself. Don’t chase extension. Watch credit, oil and yields. And keep looking for the next opportunity where price is only beginning to confirm the thesis rather than where everybody already sees it.

MEMBERS ONLY

And finally, there is a chart that stood out to me being one to keep a very close eye on as we navigate the rest of the week and month. That chart is…

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Kirk’s Opportunities | September 21, 2026

Markets threw caution to the wind as investors bought their favorite AI-driven tech stocks aggressively today.

The catalyst?

The headlines suggests the combination of lower oil prices and Treasury yields. Both of which benefited from reduced geopolitical anxiety ahead of key leadership meetings between Trump and China, Ukraine, and possibly even Iran. Not to mention the whispers of new trade truces and new AI tech business deals now making the rounds.

The Nasdaq Composite decisively broke out to a new record high with the 100 in quick pursuit as the Magnificent 7 hit new all time highs, too.

What was the real catalyst?

The price action shows too many were positioned short and sidelined ahead of what tends to be a couple of challenging weeks ahead. And the eager buyers took advantage to put the pressure on again by adding to their positions.

Needless to remind, when the market absorbs bad news and the strongest stocks resume advancing, our job is to reassess and act when and wherever justified.

THE TAPE

1) The S&P 500 busted the bearish series of lower highs, lower lows today by trading above both their prior lower intraday highs at 7756 & 7771.

This provides bullish follow through on last week’s bear trap of the Fed Day reversal.

Additionally, the bull flag formation was broken as well, with price beginning to retest overhead resistance near the prior August high.

Why does this matter?

The prior range breakout turn bull flag has put the S&P 8003 target back into play as long as we see strong and sustained upside follow through above the August high.

Ideally, we want the S&P 500 to follow the Nasdaq into overbought conditions again and remain there with no sign that today’s strength is getting sold into.

Among the swing strategies I track, most have just triggered new buy signals like the 9/20EMA above as well as MACD crossovers.

A one day squeeze is not nearly as impressive as keeping the squeeze on, defeating those caught out of position once again, and how we’ve seen unfold so many times throughout this bull market.

2) While participation improved, the underlying damage remains. More stocks rose than fell Monday, and strength extended across semiconductors and cloud stocks. Yet the latest breadth study put just 29.8% of S&P 500 stocks above their 50-day averages, while a separate reading showed 59.2% at least 20% below their all-time highs. Daily buying improved before the longer-term damage healed. Equal weight and small caps still lagged, and MAGS lifted the indexes more than otherwise.

3) The risk dashboard improved. WTI settled at $95.78, Brent at $100.34, and the 10-year Treasury yield moved below 5%. HYG also firmed modestly. These are constructive developments, with Brent still slightly above $100. We now want the relief to persist and credit spreads to confirm stabilization; falling Treasury yields can lift HYG without signaling reduced credit risk.

BENEATH THE SURFACE

New MACD bullish crossovers were made in the S&P 500 and Nasdaq Composite today triggering buy signals given their proximity to previous highs.

Selected positioning measures give this rally room to surprise.

Prior to open, money flow data made the rounds this morning which showed more money flowing into leveraged short funds than long funds among other things which added fuel to the fire today. Nothing gets the bulls’ more excited than catching the vast majority completely off guard.

Other measures are less supportive. The later research included a breadth-based risk-off signal and a broader indicator set showing limited pessimism. These measures cover different participants and methods, so they need not agree. The evidence supports potential buying pressure from some groups, alongside unresolved internal weakness. It does not establish widespread fear or a reliable rally timetable.

LEARN & GROW

While people are loathe to chase the market higher, often establishing a small position size in those breaking out can work wonders for the psyche. This way you participate, but don’t loss your @$$ if the trade should fail.

Remember, true opportunities are rarely made in comfort. When risks appear far greater than the rewards.

Learning to lean into this discomfort is a necessity for all investors, no matter their time frames and strategies. The quicker you learn to overcome this hurdle, the faster you’ll be able to earn the returns you desire.

MIXER

The adoption check: Everyone was talking about and using Meta’s Muse today if they hadn’t already done so. Adoption of AI agents certainly strengthens the demand case; monetization, margins and returns on investment remain the next tests.

The opportunity check: AI agents browse, authenticate, communicate and transact. Their use could expand demand for networking, identity protection, cybersecurity and commerce infrastructure alongside computing capacity. That gives us specific business needs to research as leadership develops beyond chips.

The week-ahead check: Wednesday’s Flash PMIs should sharpen the picture on demand, input costs and selling prices. Resilient growth with cooling price pressure would support the recovery. Earlier fuel, freight and operating-cost increases can still affect margins after crude falls, making earnings guidance an important check on how quickly relief reaches businesses.

WORTH YOUR TIME

Ever wondered what was actually inside your iPhone?

I always find these breakdowns, this one of the new iPhone 18, quite interesting.

TO TAKE WITH YOU

On days like this, I take notice of which stocks in my portfolio and watchlists outperformed the most as well as those which did not participate.

I have been doing that a lot since the Fed day bear trap, and it has proven instructive on where to focus my sidelined cash next.

FOR MEMBERS’ ONLY

Today’s opportunity is one I’ve been tracking for the past two years, made its way on the new-high list, and I think for a very good reason.

Let’s explore…

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Thursday, September 17, 2026

Yesterday, I asked what might happen when something finally started going right.

Today gave us an answer: oil eased, Treasury yields retreated, and buyers returned.

The combination I want to see from here is straightforward: oil stabilizes or continues lower, yields stop climbing, breadth keeps improving, and leadership expands beyond a handful of AI winners. Together, those developments would strengthen the case that Wednesday’s Fed selloff was a buyable, bear trap dip within the ongoing uptrend under seasonal consolidation.

However, if the bounce quick fades while oil and yields turn higher again and more stocks lose their 200-day trends at week’s end, today will be nothing but an oversold bounce. An oversold bounce to sell into rather than buy.

While the price action clearly improved in today’s strength, the next test is whether buyers can hold their ground and break the series of short-term lower highs, lower lows from the August high.

Short of that, a defensive posture remains justified.

THE OPPORTUNITY

The S&P 500 gained 1.14% to 7637.76, pushing back above the June high at 7620 and its 50-day moving average at 7615 after three consecutive closes below that area.

A clear pivot area in which price is being squeezed between its short-term trailing resistance at the 20/21EMAs and its longer-term trailing support at the 50 day, 100 day, and Ichimoku cloud below it.

To gain the upper hand again, buyers need to show they can take control at this pivot.

If THE low is already in (and I personally doubt that it is), a lot more upside follow through confirmation is required. After all, it is quite possible, too, that we could see an extended period of sideways movement within the longer-term uptrend. A move surely to frustrate the majority of impatient bulls and bears alike!

As for the bounce itself, one day moves like this fail to impress me.

What would impress?

For the series of short-term lower swing highs and lower swing lows to be broken and price retesting its prior high very quickly. To break this series, price would have to move above 775 in the SPY and 7756 in the S&P 500 itself.

It seems like a tall order in this environment.

THE TAPE

The Magnificent 7 (MAGS) and Fang+ (FNGS) are testing their recent highs.

This helped the Nasdaq Composite rally +1.69%, while the PHLX Semiconductor Index rose 3.1%.

Advancers outnumbered decliners roughly two-to-one on the NYSE and more than two-to-one on Nasdaq, on above-average volume.

Small and mid caps gained roughly 0.6%, while financials slipped.

Buyers returned broadly enough to improve participation, although technology remained well ahead of the rest.

BENEATH THE SURFACE

The index can hold up while its foundation weakens.

After breaking above its higher uptrend line, price has been in consolidation mode.

The Nasdaq 100 (QQQ) is roughly flat since mid-May, as the percentage of its stocks above their 200-day averages has fallen from 77% to 56%.

Some semiconductor stocks are approaching new highs while others struggle near long-term support. Which makes stock selection more demanding.

For bullish exposure, I’m more interested in names demonstrating strength (like we discussed yesterday) than in assuming the laggards must catch up.

Tops can develop gradually as stocks roll over in succession. A few leaders reaching new highs doesn’t settle which group is telling the larger story. We can watch whether strength spreads—or whether the remaining leaders eventually join the decline.

LEARN & GROW

The first reaction doesn’t have to become our final conclusion.

A useful framework around Fed days is often seen as this:

• Day 1 (Wednesday) brings the initial reaction

• Day 2 (today) brings the reaction to that reaction

• Day 3 (Friday) starts revealing what may endure

With triple witching expiration tomorrow, it will be interesting to see whether today’s oversold bounce has any further follow through given the tendency to see strength sold into the second half of September which tends to see weakness.

MIXER

Yield & Oil watch: The 10-year yield settled near 4.95%, while WTI finished at $102.03, down just 0.4% after recovering from its intraday low. The Bank of Japan decision will add another wrinkle in yields tomorrow.

Breadth check: More than half of Russell 1000 stocks were below their 200-day averages Wednesday, even though the index itself was nowhere near historically oversold territory. The headline decline, as so often has been the case, clearly understates how many individual trends have weakened.

September witching: More than $2 trillion in estimated delta-adjusted options notional is expiring tomorrow. The following September expiration study shows declines on triple-witching day in 12 of 14 cases from 2012–2025. Beginning in 2000, the S&P 500 was positive only 26.9% of the time over the following five trading days. Therefore, if price continues the bounce tomorrow, it will be overcoming these negative patterns as well.

YOUR TURN

The best indicator on how aggressive to be is to watch your watchlist.

Are most participating or staying sidelined or getting even weaker?

Often you’ll be able to tell so much more by watching your portfolio and watchlist than the major indexes.

TO TAKE WITH YOU

The next pullback may be the most useful part of this bounce. If buyers defend a higher low, we’ll have a clearer place to act and a clearer place to be wrong.

MEMBERS ONLY

Tonight I share a lesson on how I treat the entry of a new position:

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The Fed delivered the expected hike.

The surprise was how clearly it told investors not to assume it was done!

The question now is how stocks will handle not only the first Fed hike in three years, but the prospect of additional hikes ahead.

While the economy and earnings remain strong, we’re about to find out how well stocks can handle fighting a Fed refocused on taming inflation.

THE OPPORTUNITY

Having dropped 7 of the last 8 days, the S&P 500 closed below the June 2 high at 7620 for the third straight session.

Not only has the August breakout been successfully bull-trapped, but we’re now starting to see bearish follow-through.

The upper 196-point trading range has broken to the downside, putting the S&P 500 back into its May-June-July trading range. On a measured-move basis, subtracting 196 points from 7620 gives us a downside target of 7424.

If reached, that would amount to roughly a 5% pullback from the mid-August high. That’s hardly extraordinary. We tend to see a 5% pullback about three times per year on average, and this would only be the second one this year.

There are several levels between here and there that matter.

With both the 21-day EMA and 50-day SMA now broken, the 100-day moving average at 7511 was tested and defended today. Below the 7424 measured-move target, the 150-day moving average sits near 7269, followed by the 200-day near 7174.

But while most investors focus heavily on moving averages, I pay much more attention to anchored VWAPs, particularly when they’re anchored to significant market turning points.

Today provided a good example. The S&P 500 rallied intraday to defend the 7550 AVWAP anchored to the June 2 high.

If that fails, the next major anchored VWAP below is around 7400, measured from the April 2 low. That’s especially interesting because it sits just below the 7424 measured-move target.

So we now have a potential cluster of support developing around 7400–7424 if the decline continues.

At the same time, given the steady weakness heading into today’s Fed decision, the possibility of an oversold relief rally still should not be entirely discounted. We’ll know much more by how we close on Friday.

THE TAPE

The S&P 500 fell 0.44% to 7552.14, but the modest headline decline understated the weakness underneath.

The Dow fell 1.21% and Russell 2000 lost roughly 0.4%. Nasdaq 100 finished essentially unchanged, while the FANG+ index slipped just 0.14%.

Breadth was considerably worse. Decliners beat advancers 1.75-to-1 on the NYSE and 1.48-to-1 on Nasdaq. The NYSE produced 430 new lows against 76 new highs, while Nasdaq had 257 new lows versus 51 new highs.

So selling broadened again but important growth leadership held up much better.

That distinction matters.

BENEATH THE SURFACE

One of the more constructive things I saw today was where the weakness wasn’t.

Nasdaq 100 closed up +0.3%, the FANG+ lost only 0.14%, and fallen angel Semiconductors (SMH) gained +0.64%.

Semiconductors had been at the center of the recent AI weakness, so seeing them stabilize while broader participation deteriorated is encouraging.

We now have a clear split: the average stock is weakening while several important growth and technology groups are holding up considerably better.

Either participation begins catching up, or eventually the remaining leaders get dragged lower.

For now, leadership is still resisting. Something we’ll be keeping a close eye on.

MIXER

Post-Fed reaction: Tomorrow may tell us more than today, and Friday will tell us even more than that. First, I want to see whether today’s weakness gets follow-through or buyers step in now that the first hike is behind us.

Rates: The 2-year jumped after the decision while the 10-year remained around 5%. That keeps valuation pressure alive.

Oil: Crude finally moved lower. More of that would remove one important source of inflation pressure.

Small caps: Russell 2000 continues lagging large-cap growth. A healthier market eventually needs broader participation.

Friday OPEX: A very large options expiration arrives Friday and is likely to increase volatility at a minimum. With the S&P 500 near important technical levels, positioning and expiration-related flows could exaggerate intraday moves.

Known negatives: Most of today’s and tomorrow’s challenges aren’t surprises anymore. The Fed is tightening. Yields are high. Inflation is sticky. Breadth is weak.

Investors have had plenty of time to worry about them.

So I keep asking: What happens when something finally starts going right?

Maybe oil keeps falling. Maybe yields back away from 5%. Maybe breadth improves. Maybe the Fed ultimately hikes less than feared.

When our screens stay red, it is easy to become consumed by what is going wrong.

Sure, I follow my stops and manage my risk, but I would rather be looking for what is starting to improve and where the next opportunity may be developing in spite of this weakness.

I’ve long thought that such over-focus on the Fed is a fruitless endeavor. Focusing on the Fed for so many years has taken my eyes off the ball than have helped them. Just a personal thought I have looked for an opportunity to share.

WORTH YOUR TIME

This study of first Fed rate hikes since 1994 from Sentimentrader.com shows stocks historically tending to struggle for 1 to 3 months after the initial hike followed by relatively weak returns in the months which have followed. Ugh.

Yes, useful information.

But hardly secret information.

Everyone has heard “don’t fight the Fed.” Historical studies now circulate worldwide within minutes and can be summarized instantly by AI.

So the more interesting question is: How much of that expected weakness has already been anticipated and acted upon?

The answer, of course, is that we are going to find out!

Yet, investors were preparing for this tightening well before today’s announcement. The failed breakout, weaker breadth and recent selling suggest at least some of the historical post-hike concern has already been acted upon.

But markets trade on changes in expectations, not information everybody already knows.

If oil falls, yields retreat, breadth improves, or stocks simply stop reacting negatively to bad news, that may tell us more than the historical playbook.

In today’s information environment, the edge may come from watching what price does after everyone has already read the study.

YOUR TURN

Corrections make everything feel urgent, but they also reveal where strength remains.

When markets are under pressure, do you spend more time looking for what to sell—or looking for what may become the next opportunity?

I increasingly think the second question is far more productive.

TO TAKE WITH YOU

Corrections are uncomfortable, but revealing.

Use this one to identify what is holding up, what is improving, and what may become actionable next.

MEMBERS ONLY

One stock has been doing exactly what I want to see during this pullback—holding up better than the market and many of its competitors.

I think that relative strength is now good enough to entertain an initial position.

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