• Betting markets and stocks are increasingly pricing in a Democratic sweep.

• Breadth is improving, but defensives are leading, and credit spreads continue to widen.

• SK Hynix earnings this Tuesday will be critical for Korea and semiconductors.

Good morning,

It’s hard to have a view of "the market” much less write a concise introduction about said market, when its most consistent characteristic recently has been the near-inverse correlation between the index and what the majority of its underlying stocks are doing.

The good news is that the S&P 500 heads into this week still above key support. The bad news? It almost certainly won’t hold unless we get some positive earnings reactions from the major tech and communication names reporting this week.

SK Hynix (and Seagate) kick things off on Tuesday, while Wednesday sees Microsoft and Alphabet. Charts don’t predict earnings, and neither do I, but the “trend” in the reactions hasn’t been great, as I noted ahead of the Lam Research report.

If there’s a story that matters outside earnings, it continues to be oil, which quietly posted its second-highest weekly close since the war began, and is on the verge of a major breakout. It’s down slightly this morning, which might help explain equity futures, but any material upward movement this week and it could become the top story.

Day-by-day moves in oil aside, energy stocks act great, and today’s tactical opportunities section will highlight a focused ETF that looks primed to join the party.

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Last week: Performance

Small-caps led a bounce-back for “the rest” of the market, but the Nasdaq 100 and S&P 500 were dragged lower by losses in communication services and technology. Energy was the top-performing sector, while gold underperformed all major asset classes, falling more than 4%.

Last week: The most important moves

“The rest” of the market leads a charge higher

Only the S&P ex-technology was lower on the week, while IWM’s nearly 2% gain was good for its best week since before the August top.

Tuesday was the best day for SPX breadth since coming off the March lows

META falls 7%, loses key support following earnings

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Good morning,

Leadership and relative strength aren’t just key to positioning portfolios, they’re an important part of the macro call around here.

That’s why I’m paying so much attention to the recent defensive strength (and tech weakness), even while breadth has been firming up in October.

As promised, today, we’re looking at all the stocks in the S&B 20 Index.

Remember, the S&B 20 stocks are not stocks I’m endorsing from the long side. Rather, think of it as my personal Dow Jones Industrial Average. It has the largest, most important stocks, but I created it to be diverse in its representation and provide important information on market leadership. You can read each stock’s specific reason for inclusion in the introductory report, but the stocks are divided into three baskets:

• The Top Tech 8

• Cyclicals

• Defensives

At the end, we’ll look at a few extra charts and provide some final thoughts.

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Top Tech 8

AAPL: Apple

Apple sits just a hair below all-time highs and is riding a relative uptrend after leading the tech charge in September AND holding up very well recently. It closed right on the breakout level yesterday, and if we’re above $330, the expectation should be new highs incoming.

AMZN: Amazon

Amazon has broken out from a bullish descending wedge pattern and hit a one-month high on Tuesday. If it’s above the 200-DMA ($243), I like the risk-reward with an eye toward the August all-time highs.

Share Brown Technical Insights

AVGO: Broadcom

Nothing good to say about Broadcom. The stock is at 52-week relative lows, its 200-DMA has turned into resistance, and the small pattern I called out last week resolved lower. Risk to the YTD lows just below $300.

GOOGL: Alphabet

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Good morning,

Today, we’re breaking down the technicals for our most important risk baskets.

As Saturday’s edition of The Weekender showed, since the middle of August, there’s been a clear move toward defensive leadership. Given we’ve already seen weakness in breadth and credit, this is really the last thing bulls want at this point, so it’s important enough that we’ll be devoting this report and Thursday’s Stock Trends to it.

In today’s report, we’ll look at the absolute technicals for all of our key risk baskets, and then end with some of the most important relative relationships.

Let’s get into it!

💡Quick reminder on the S&B 20 baskets💡

The S&B 20 Index is my custom index that I use to help gauge the health of the market. It’s a small, concentrated index with exposure carefully selected from key groups. They are:

Top Tech 8: Apple, Amazon, Broadcom, Alphabet, Meta Platforms, Microsoft, Netflix, Nvidia

Cyclicals: Booking Holdings, D.R. Horton, JPMorgan & Chase, Simon Property Group, Uber, United Rentals

Defensives: Berkshire Hathaway, Duke Energy, Eli Lilly, Procter & Gamble, UnitedHealth Group, Exxon Mobil

We’ll review all 20 in Thursday’s Stock Trends.

Risk-on baskets: Tech-heavy

S&B 20 Top Tech 8

The Top Tech 8 is a generally constructive chart, above a rising 200-DMA and with big base potential. The two major negatives are that the index is actually below last October’s peak, and failed to make a new high like the S&P 500 last week.
*Note that the S&B 20 baskets aren’t candlesticks because they are geometrically weighted. This keeps the index weights constant.

High beta (SPHB currently 51% technology)

High beta failed to make a new high earlier this month and is back toward the lower end of a 14% range. The relative breakdown vs. SPX isn’t a great signal, but the bigger concern would come from a move below $134. That would complete a double-top and target considerable downside.

Momentum (MTUM currently 49% technology)

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• Technology is on false breakout alert after crashing through all short-term support levels.

• Defensive leadership is the last thing bulls want to see right now.

• Oil prices look headed to $120/bbl. Or higher…

Good morning,

Futures are pushing higher this morning, led by the Nasdaq, as tech stocks attempt to bounce back from an ugly week.

The title for last Saturday’s edition of The Weekender was “Breakout or fake-out?” and last week was a big point for Team Fake-Out.

The driver, of course, was technology, a sector I’ve been pointing to recently as an opportunity, and one we increased in recent model trades at the beginning of October.

While I’ve been skeptical of memory stocks, anything related to AI or that had done well recently was thrown out with the bathwater last week, and we need to respect the change in character. The winners and stocks that were firming up before might be “potential” opportunities, but they’re falling knives as we start this week.

The other thing investors need to balance is that the recently improved breadth is coming with defensive leadership. We’ll use this week’s Overtime and Stock Trends reports to continue to monitor, but I would consider it a net negative for the market as a whole.

Remember, if “bad breadth” wasn’t enough to drag the index lower, “good breadth” may not be able to hold it up if technology is falling.

Finally, while some of the oil charts in the latest edition of The Weekender were meant to be extreme and only highlight the potential upside, the fact is that no sector is working better and you likely don’t have enough energy exposure.

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Last week: Performance

Seven of eleven sectors were higher last week, but it didn’t matter for the major indexes as the worst weekly loss for technology since April 2025 dragged the S&P 500 to a 1.95% loss. EM was even worse, as the tech/chip collapse started in South Korea and extended into Taiwan.

Last week: The most important moves

First 1% down day for the S&P 500 since July

That was Wednesday. It followed it up with another on Friday.

Banks take a punch on earnings, then bounce back

Healthcare soars to new highs

But nobody cared about any of that because… AI

Korea’s collapse kicks off again

Worst week for the KOSPI since 2008. I called out the risk to SK Hynix in the October 8 Stock Trends, and it has been straight down since.

That bled into broader memory and US chips

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Good morning,

No major theme to this week, but there are a lot of big moves happening, so I tried to be short on words, and heavy on the charts.

Certainly, from an index perspective, I think it’s right to start with the weakness coming from technology. Last week’s report highlighted AI plays that were breaking out, but reiterated a skeptical view of memory names. Those stocks and some other important semiconductors are breaking down this week, so we’ll start by highlighting some of the weakest.

We’ll also look at:

• Three of the worst financials earnings reactions

• Top ways to play the breakout in healthcare

• Energy, energy, energy

• and more!

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Chip weakness resuming

Western Digital finally loses the 200-day

Been on this for months and we’re already down 50% from the highs. But with this support break, you could make the case that it just topped.

Micron fails to hold its breakout

SanDisk loses its 50-DMA

That small move to next support at the 200-DMA is another 16% of downside from current levels.

200-day turning from support into resistance for Broadcom

A break of this short-term uptrend line and the next stop likely starts with a “2”.

Could Lam Research be next?

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Good morning,

The banks are kicking off earnings season as you read this, so what better time to take the financials sector into Overtime?

Of course, we won’t be previewing any revenue numbers or discussing the impact of non-GAAP adjusted earnings, but we will highlight what price levels investors should be watching this week on the most important stocks in the sector.

I also want to take a top-down look at financials because the sector currently sits in the middle of a very split market.

On one hand, sectors like technology, energy, and healthcare are breaking out and near 52-week highs. On the other, more defensive sectors are outright breaking down, and cyclical areas like discretionary and industrials can’t catch a bid.

But what financials (still the second-largest SPX sector) do from here looks critical for keeping the Q4 rally on track, and that starts this week with earnings.

Bottom-up earnings preview

This morning: JPMorgan & Chase (JPM)

JPM is into a big range of support and so far, holding the lower end of it. The stock is up 1% premarket to just above $337; if it can hold that throughout the day, it goes a long way toward getting this stock back in gear.

This morning: Goldman Sachs (GS)

Going into this morning’s report, the MACD is about all the Goldman bulls had to hang their hat on. It looks like it is going to be good for a bounce, as the stock is up about 3% premarket, but it’s very hard to be bullish this stock below the $983 level.

This morning: Wells Fargo (WFC)

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Futures are near flat this morning, though off their overnight highs as oil prices are pushing higher.

As it stands now, there are a litany of concerns, but few signs that the seasonal roadmap and Q4 rally aren’t underway. In fact, the equal-weight S&P 500 is up six of seven days so far in October.

However, identifying leadership in rotationary environments that depend on the laggards picking up the slack can be tricky.

My best advice is to focus on what was working before the summer weakness showed up, and I believe not coincidentally, that’s where the best charts are found.

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Last week: Performance

The S&P 500 broke out to new highs, but it was defensives that led the way across the board. Gold was the best-performing asset class, while utilities, staples, and energy led on a sector basis.

Quick heads up!

I’ll be co-hosting a webinar for the CMT Association on Wednesday at 10:00 am ET. It’s free for everyone, and you can register by clicking here.

Last week: The most important moves

First new high for the S&P 500 since August

And the first day of more 52-week highs in the index than lows in over a month.

All-time highs aren’t bearish. Since 1950, the S&P 500 has recorded 1,538 record closing highs. The number of those that were the last one for at least a year? 15. Or less than 1%.

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Good morning,

The big macro news since our last publication is that the S&P 500 soared to a new all-time high on Tuesday, its first since August 13.

There has been some improvement in the rest of the market, with breaks of monthlong downtrend lines and the first day of more SPX 52-week highs than lows in over a month.

But the biggest reason for the new high in the index is that the AI trade is back (kind of).

And by kind of, I mean that we’re seeing healthy dispersion. It isn’t every stock breaking out and working again. But importantly, some of the largest and most important are.

Today, we’ll review leaders emerging from the rubble, on both the data-center/power side of the trade, as well as the chips.

We’ll also cover:

• The key group that isn’t back

• Tuesday’s reversal in biotech

• My favorite energy names

• Hot List updates

• and more!

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AI power is back

Constellation Energy breaks out on mega-deal with Microsoft

They say the market gets the news first, and a small bottom formed over the last two weeks of September. Tuesday’s 12% gain broke it out, and CEG looks like an opportunity. The 200-day and 50-day are both lined up as potential stops.

Quanta breaks a five-month downtrend line

Gave some back yesterday, but if we’re above the 50-DMA, the breakout is intact.

Okay, not a power play, but Johnson Controls cools the data centers

New all-time highs on Tuesday and a relative breakout as well.

Here are the best-looking semis

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Good morning,

September was a brutal month for active management, and while our portfolios didn’t outperform their benchmarks, I’m proud of how they held up.

Both models were positive since our last trades on September 1, even though the equal-weight S&P 500 and US Aggregate Bond ETF each lost more than 2.3%, and only two of eleven sectors were positive.

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Good morning,

Futures are flat this morning; not a negative, but also not a positive in light of our Saturday takeaway that “It’s now or never for “the rest” of the market”.

And I want to use a bit more real estate to expand on some of the reasons why I believe that.

I’ve been clear that I think the recent market correction “should” be a buying opportunity. And that’s still the base case.

However, there have been some uncomfortable developments in recent weeks that investors shouldn’t dismiss.

At the forefront are credit spreads, where high-yield OAS has widened by more than 50 bps in the past month. That’s the quickest we’ve seen since early 2025 (importantly, well before Liberation Day), and before that, August 2024, and October 2023 (as interest rates were first peaking).

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Last week: Performance

Technology led again while 7/11 sectors were lower. Only the Nasdaq 100 was higher among major averages; MSCI EAFE lagged as a breakout in the dollar weighed on returns.

Last week: The most important moves

More new highs for technology

Meanwhile, the equal-weight S&P just tied its longest weekly losing streak on record

Micron earnings aid tech and semis

Muted move for Micron but it held the breakout and boosted the VanEck Semiconductor ETF to its highest close since June:

Your periodic reminder that trends trend

Nike hit a 13-year low on Friday following its earnings report.

Bad news is good news again

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