Overall market trend: Bearish phase – day 32

Fridays market: Money leaving the market – Normal selling pressure

TC2000 McClellan: 46

Stocks above 40PMA T2108: 39

VIX: 19

52 week highs (US common stocks): 231

Seasonality: The historical case: October is the midterm year’s best month

Since 1950, October has been the best-performing month in U.S. midterm years, averaging a 3% gain for the S&P 500 and posting positive returns 73.7% of the time. November ranks second, averaging a 2.7% gain, with positive returns 78.9% of the time. The midterm effect is large. Across all years, October has been positive nearly 60% of the time since 1950, with an average gain of 0.89%, so the midterm version roughly triples the typical October return. LPL also notes that the improvement from October onwards in midterm years has not depended on which party holds the Presidency.

The key difference from the template.

The midterm Q4 rally has historically started from a deep autumn low, which you’ve already noted. Since 1950, the S&P 500 has suffered an average peak-to-trough decline of about 18% in midterm years. In 2026, the S&P 500 fell 5% in the first quarter, rallied 15% in the second, and gained 2% in the third, and it remains less than 2% below its last record close. The early-year weakness fits the pattern. But there hasn’t been an autumn flush, so the “relief rally off the lows” mechanism has less to work with. Detrick’s comment that the historical Q4 pattern should not be viewed in isolation applies here, especially with yields at 5.3% and oil above $100.

Overall, the seasonal tailwind for October 2026 is real but should be discounted. The usual setup (a washed-out market heading into the vote) is missing. The more likely route to a large Q4 might be a further pullback in October, followed by the post-election rally, rather than a straight run higher from here.

Indices:

$SOXX Downtrend

$QQQ: Downtrend

$SPY: Downtrend

$RSP: Uptrend

$DIA: Uptrend

$IWM: No trend

$BTC: Downtrend

$SQQQ: Uptrend

$UVIX: Uptrend

$TLT: Uptrend

$USO: Uptrend

$TNX: Downtrend

$GLD: Downtrend

$SLV: Downtrend

$SLX: Downtrend

2%+ sectors Friday:

• $HACK +4.16%
• $XLE +2.60%

2%- sectors Friday:

• $JETS -2.50%
• $IYT -2.12%

Main sectors monthly trailing:

• Leading – $XLE $XLU
• Lagging – $XLI $XLK

Sub sectors monthly trailing:

• Leading – $RTH $HACK
• Lagging – $TAN $SMH

Bitcoin: 80k ish

Themes:

Cybersecurity

Infrastructure

Cloud Computing

Semiconductors

Software

Clean energy

Crypto

Theme 1: Oil Shock & Energy Supercycle (Hormuz Supply Squeeze)

Theme 2: AI-Era Cybersecurity & Software Rotation

What type of market are we in: Choppy

Key things for this week: Busy earnings week – This is the heaviest week of the season. The Fed decision, Q3 GDP and the PCE inflation data all land on the same two days as Microsoft, Alphabet and Amazon. 542 companies worth $2bn or more report this week, with Thursday the busiest day at 202 reports. Alphabet, Microsoft and Amazon are worth $10.9 trillion together, about a third of the $31.9 trillion reporting this week. The backdrop is already fragile: last week’s headlines featured stocks hit as AI growth concerns weigh on sentiment.

Are breakouts working: No

Are breakouts likely to work for the next 3 – 5 days: No, $QQQ $SPY are in downtrends, expect breakouts to fail.

Are breakdowns likely to work for the next 3 – 5 days: Selectively

Should I be trading: SIPs, WSS or 5m RO on the short side.

Todays watchlist (stocks setting up): None at the moment

Overall market trend: Bearish phase – day 29

Yesterdays market: Money entering the market – High buying pressure

TC2000 McClellan: 58

Stocks above 40PMA T2108: 35

VIX: 17

52 week highs (US common stocks): 201

Seasonality: The historical case: October is the midterm year’s best month

Since 1950, October has been the best-performing month in U.S. midterm years, averaging a 3% gain for the S&P 500 and posting positive returns 73.7% of the time. November ranks second, averaging a 2.7% gain, with positive returns 78.9% of the time. The midterm effect is large. Across all years, October has been positive nearly 60% of the time since 1950, with an average gain of 0.89%, so the midterm version roughly triples the typical October return. LPL also notes that the improvement from October onwards in midterm years has not depended on which party holds the Presidency.

The key difference from the template.

The midterm Q4 rally has historically started from a deep autumn low, which you’ve already noted. Since 1950, the S&P 500 has suffered an average peak-to-trough decline of about 18% in midterm years. In 2026, the S&P 500 fell 5% in the first quarter, rallied 15% in the second, and gained 2% in the third, and it remains less than 2% below its last record close. The early-year weakness fits the pattern. But there hasn’t been an autumn flush, so the “relief rally off the lows” mechanism has less to work with. Detrick’s comment that the historical Q4 pattern should not be viewed in isolation applies here, especially with yields at 5.3% and oil above $100.

Overall, the seasonal tailwind for October 2026 is real but should be discounted. The usual setup (a washed-out market heading into the vote) is missing. The more likely route to a large Q4 might be a further pullback in October, followed by the post-election rally, rather than a straight run higher from here.

Indices:

$SOXX Downtrend

$QQQ: Downtrend

$SPY: Downtrend

$RSP: Uptrend

$DIA: Uptrend

$IWM: No trend

$BTC: Uptrend

$SQQQ: Uptrend

$UVIX: Uptrend

$TLT: Uptrend

$USO: Uptrend

$TNX: Downtrend

$GLD: No trend

$SLV: Downtrend

$SLX: No trend

2%+ sectors yesterday:

• $IBB +3.16%
• $JETS +2.38%
• $XLV +2.37%

2%- sectors yesterday:

• None

Main sectors monthly trailing:

• Leading – $XLV $XLP
• Lagging – $XLI $XLK

Sub sectors monthly trailing:

• Leading – $RTH $IGV
• Lagging – $TAN $JETS

Bitcoin: 82k ish

Themes:

Cybersecurity

Infrastructure

Cloud Computing

Semiconductors

Software

Clean energy

Crypto

Theme 1: Oil Shock & Energy Supercycle (Hormuz Supply Squeeze)

Theme 2: Defensive Rotation – Healthcare & Big Pharma Breakout

What type of market are we in: Weak

Key things for this week: Big earnings include $META, $TSLA, $NFLX, $GM and $PG. Chips remain weak: they fell for an eighth straight day, and the Nasdaq 100 lost 5.5% on the week

Are breakouts working: No

Are breakouts likely to work for the next 3 – 5 days: No, markets just chopping around in a weak environment, good earnings typically not being rewarded so far.

Are breakdowns likely to work for the next 3 – 5 days: Selectively

Should I be trading: SIPs, don’t expect multi day moves to hold. Tech tried to rally yesterday but gave most back intrday.

Todays watchlist (stocks setting up): Symbols from TC2000
SOXL
TQQQ