Overall market trend: Bearish phase – day 5
Yesterdays market: Money leaving the market – high selling pressure
TC2000 McClellan: -80
Stocks above 40PMA: 28
VIX: 17
52 week highs (US common stocks): 201
Seasonality: September is broadly weak, and midterm years make it slightly weaker. Since 1950, September averages about -0.6% across all years, but in midterm years specifically it drops to roughly -0.8%, compared to +0.9% for October and +1.9% for November in all years. Other analyses using different lookback windows put the midterm-September average anywhere from -0.82% with a win rate of just 47.4% to slightly better depending on the exact years sampled.
The bigger story is the September–October low, not September alone. Across the 19 midterm years since 1950, market lows have clustered heavily in the weeks just before the election, and the S&P 500 has been higher 12 months after every single one of those 19 midterm elections. Drawdowns in this window have ranged widely — a roughly 20% decline in 2002, a shallower pullback in 2010, ~10% in 2014, and ~11.5% in 2018.
Indices:
$SOXX Downtrend
$QQQ: Downtrend
$SPY: Downtrend
$DIA: Downtrend
$IWM: Downtrend
$BTC: Downtrend
$SQQQ: Uptrend
$UVIX: No trend
$TLT: Downtrend
$GLD: Downtrend
$SLV: Downtrend
$SLX: Downtrend
2%+ sectors yesterday:
- $XLE +2.17%
2%- sectors yesterday:
- $TAN -2.44%
Main sectors monthly trailing:
- Leading – $XLE $IBB
- Lagging – $XLY $XLI
Sub sectors monthly trailing:
- Leading – $IGV $HACK
- Lagging – $TAN $JETS
Bitcoin: 76k ish
Themes:
Cybersecurity
Infrastructure
Cloud Computing
Semiconductors
Software
Clean energy
Crypto
Top thematic stocks:
| Ticker | Company Name | Sector/Industry | Market Cap | YTD Return | Key Catalyst | Analyst Consensus |
|---|---|---|---|---|---|---|
| LITE | Lumentum Holdings Inc. | Communication Equipment – Optical/Photonics | $83.2B | +151.5% | 800G/1.6T optical interconnect upgrade cycle for AI data centers | Buy; PT $1,148 (+24%) |
| CIEN | Ciena Corp | Communication Equipment – Networking | $49.6B | +49.5% | Record $8.5B backlog (seen exceeding $10B by FY-end); Q3 beat, but margin-normalization concerns | Buy; PT $504 (+44%) |
| COHR | Coherent Corp | Electronic Components – Photonics/Lasers | $59.8B | +65.5% | Diversified photonics/laser exposure to optical-interconnect upgrades | Buy; PT $415 (+36%) |
| GLW | Corning Inc | Electronic Components – Glass/Fiber | $143.3B | +91.1% | Fiber and glass infrastructure demand from AI data center buildout | Strong Buy; PT $194 (+17%) |
| AAOI | Applied Optoelectronics | Communication Equipment – Optical | $9.0B | +202.2% | Pure-play optical transceiver maker riding hyperscaler capex | Buy; PT $163 (+55%) |
| MRVL | Marvell Technology | Semiconductors – Networking/Optical DSP | $207.0B | +178.2% | Custom AI silicon plus optical DSP demand | Strong Buy; PT $285 (+21%) |
| CRDO | Credo Technology Group | Semiconductors – Connectivity | $30.6B | +13.3% | Active electrical cables/optical interconnect for AI server racks | Strong Buy; PT $281 (+73%) |
| AVGO | Broadcom Inc | Semiconductors – Networking/Custom ASIC | $1.73T | +5.0% | Custom AI ASICs plus core networking silicon | Strong Buy; PT $533 (+47%) |
| ANET | Arista Networks | Communication Equipment – Data Center Networking | $251.7B | +52.3% | High-speed switching for AI clusters | Strong Buy; PT $241 (+21%) |
| HPE | Hewlett Packard Enterprise | Computer Hardware | $69.3B | +160.9% | AI server/networking demand, Juniper integration; +12% single-day surge on Oracle read-through | Buy; PT $67 (+9%) |
| FN | Fabrinet | Electronic Components – Optical Manufacturing | $15.0B | −8.9% | Contract manufacturer for optical transceivers; lagging peers near-term | Buy; PT $734 (+77%) |
| ALAB | Astera Labs | Semiconductors – Connectivity | $50.5B | +75.1% | Connectivity chips linking GPUs and optics inside AI racks | Buy; PT $390 (+34%) |
| CSCO | Cisco Systems | Communication Equipment – Networking | $442.1B | +47.7% | AI-networking and security portfolio re-rating | Buy; PT $138 (+23%) |
| DELL | Dell Technologies | Computer Hardware – AI Servers | $356.5B | +354.8% | AI server backlog tied to data center buildout; shares have more than tripled in 2026 | Buy; PT $564 (≈flat) |
| POET | POET Technologies | Semiconductors – Optical/Photonic ICs | $1.4B | +25.6% | Early-stage photonic integrated circuit developer | Thin coverage (n/a) |
| LUMA | KraneShares Photonic & Optical ETF | Thematic ETF | — | New (launched Jul 2026) | Pure-play basket: top holdings incl. Lumark Optoelectronics, SOITEC, LITE, COHR, MRVL | — |
What type of market are we in: Choppy
Are breakouts working: No
Are breakouts likely to work for the next 3 – 5 days: No
Are breakdowns likely to work for the next 3 – 5 days: No
Should I be trading: Indices in downtrends, 20% study low on both sides bullish & bearish, SIPs, EP9 and WSS with strong CATs ONLY. Interest rate decision is on today which will likely help the market find some direction.
Todays watchlist (stocks setting up): $TBBK WSS “fintech Chime announced a $590M all-cash deal to acquire its other banking partner, Stride Bank, expected to close H1 2027. Chime currently relies on both Stride and Bancorp to operate without its own bank charter. Bringing Stride in-house signals Chime likely reduces or eliminates its reliance on Bancorp over time — the stock fell ~21% on the day. The deeper worry: if one major fintech partner insources its banking license, others in Bancorp’s client base could follow, which would strike directly at Bancorp’s core “banking-as-a-service” model.”
Last Updated on September 16, 2026 by PeteStilgoe