SA 20/10/2026 – Money leaving the market – Normal selling pressure

Overall market trend: Bearish phase – day 28

Yesterdays market: Money leaving the market – Normal selling pressure

TC2000 McClellan: 10

Stocks above 40PMA T2108: 29

VIX: 18

52 week highs (US common stocks): 156

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: Downtrend

$BTC: Downtrend

$SQQQ: Uptrend

$UVIX: Uptrend

$TLT: Uptrend

$USO: Uptrend

$TNX: Downtrend

$GLD: No trend

$SLV: Downtrend

$SLX: Downtrend

2%+ sectors yesterday:

• None

2%- sectors yesterday:

• $XLU -2.01%

Main sectors monthly trailing:

• Leading – $XLE $XLP
• Lagging – $XLF $IBB

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)

Ticker	Company Name	Sector/Industry	Market Cap	YTD Return	Key Catalyst	Analyst Consensus
XOM	ExxonMobil Holdings Corporation	Energy / Integrated Oil & Gas	$736B	n/v	Q3 earnings 30 Oct; $4.5B refining tailwind	Moderate Buy; avg PT $175 (MS PT $185)
CVX	Chevron Corporation	Energy / Integrated Oil & Gas	$440B	n/v	Q3 earnings 30 Oct; near 52-week high	Buy; avg PT $228 (MS PT $226)
COP	ConocoPhillips	Energy / E&P	$173B	n/v	Q3 earnings 5 Nov; target raises	Buy; MS $159, Barclays $150, Wells $189
FANG	Diamondback Energy, Inc.	Energy / E&P (Permian)	$55.7B	n/v	Scotiabank initiated Outperform; Q3 earnings 2 Nov	Overweight; mean PT mid-$230s
EOG	EOG Resources, Inc.	Energy / E&P	n/v	n/v	Leverage to $100 WTI; Q3 earnings	n/v
OXY	Occidental Petroleum Corporation	Energy / E&P	n/v	n/v	Leverage to $100 WTI; Q3 earnings	n/v
MPC	Marathon Petroleum Corporation	Energy / Refining	~€122B	n/v	Diesel tightness; Wells PT $400→$560; earnings 3 Nov	Mixed; avg PT $418 (below price)
VLO	Valero Energy Corporation	Energy / Refining	n/v	n/v	Refiners expected to beat record Q2	n/v
PSX	Phillips 66	Energy / Refining	n/v	n/v	Diesel crack spreads	n/v
FRO	Frontline plc	Energy / Crude Tankers (VLCC)	~$13.2B	+158% (to 8 Oct)	Record VLCC spot rates	n/v
DHT	DHT Holdings, Inc.	Energy / Crude Tankers (VLCC)	~$3.8B	+104% (to 8 Oct)	Pure VLCC spot exposure	n/v
INSW	International Seaways, Inc.	Energy / Crude & Product Tankers	$5.6B	~+139%	Buying Bruton (4 VLCCs); earnings 5 Nov	Buy; avg PT $120 (B. Riley $140)
STNG	Scorpio Tankers Inc.	Energy / Product Tankers	$4.1B	~+63%	Earnings 29 Oct; MS PT $76→$90	Hold; avg PT $92–100
TNK	Teekay Tankers Ltd.	Energy / Crude Tankers	~$3.5–3.7B	n/v	Earnings 4 Nov	Hold; avg PT $77 (below price)
TRMD	TORM plc	Energy / Product Tankers	n/v	n/v	Hit 52-week high on product tanker rates	n/v
XLE	Energy Select Sector SPDR ETF	ETF – Energy	—	~+50%	All-time high this week	—
XOP	SPDR S&P Oil & Gas E&P ETF	ETF – E&P	—	n/v	Equal-weight producer exposure	—
BWET	Breakwave Tanker Shipping ETF	ETF – Freight futures	—	n/v	Tracks tanker freight rates	—
OIH	VanEck Oil Services ETF	ETF – Oilfield services	—	n/v	Capex follow-through	—

Theme 2: Defensive Rotation – Healthcare & Big Pharma Breakout

Ticker	Company Name	Sector/Industry	Market Cap	YTD Return	Key Catalyst	Analyst Consensus
LLY	Eli Lilly and Company	Healthcare / Pharma (GLP-1)	~$1.1T	n/v	Q3 earnings 29 Oct; RBC expects beat and raise	Buy; avg PT $1,339 (Cantor $1,440)
JNJ	Johnson & Johnson	Healthcare / Pharma & MedTech	n/v	n/v	Q3 beat (EPS $2.59, revenue $25.4B)	n/v
ABBV	AbbVie Inc.	Healthcare / Pharma (Immunology)	$501B	n/v	Record high; Q3 earnings 30 Oct	Buy; avg PT $283 (Scotiabank $320)
MRK	Merck & Co., Inc.	Healthcare / Pharma	n/v	+38% (to 9 Oct)	Q3 earnings; sector momentum	Street PT ~$156 (Cantor Neutral $145)
UNH	UnitedHealth Group Incorporated	Healthcare / Managed Care	n/v	n/v	Q3 beat; 2026 EPS guide ≥$20.50; +9% on the week	Buy; avg PT ~$481
AMGN	Amgen Inc.	Healthcare / Biotech	$230B	n/v	RBC PT $400→$430	Mixed; RBC Outperform, Guggenheim Neutral $378
GILD	Gilead Sciences, Inc.	Healthcare / Biotech	n/v	n/v	Rose with the rotation	n/v
BMY	Bristol-Myers Squibb Company	Healthcare / Pharma	$122B	n/v	Q3 earnings 29 Oct; Phase 3 readouts	Hold; avg PT ~$65
PFE	Pfizer Inc.	Healthcare / Pharma	n/v	n/v	Cantor raised PT (Neutral); value play	n/v
MRNA	Moderna, Inc.	Healthcare / Biotech (mRNA)	n/v	~+177% (reported)	Personalised cancer vaccine; Goldman PT $137	Mixed; still loss-making
TMO	Thermo Fisher Scientific Inc.	Healthcare / Life-Science Tools	n/v	n/v	Q3 earnings	n/v
ABT	Abbott Laboratories	Healthcare / MedTech	n/v	n/v	Defensive MedTech; Q3 earnings	n/v
CVS	CVS Health Corporation	Healthcare / Managed Care & Pharmacy	n/v	n/v	Managed care lift after UNH beat	n/v
ICLR	ICON plc	Healthcare / CRO	n/v	n/v	Deutsche Bank sees bookings upside	n/v
FTRE	Fortrea Holdings Inc.	Healthcare / CRO	n/v	n/v	Upgraded to Buy at Deutsche Bank	Buy (DB)
XLV	Health Care Select Sector SPDR ETF	ETF – Healthcare	—	+15.9%	Record high ~$177	—
IHE	iShares US Pharmaceuticals ETF	ETF – Pharma	—	n/v	Pure pharma exposure	—
XBI	SPDR S&P Biotech ETF	ETF – Biotech	—	n/v	Higher beta; benefits from M&A	—
IHF	iShares US Healthcare Providers ETF	ETF – Managed Care	—	n/v	UNH/CVS recovery	—

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

Are breakdowns likely to work for the next 3 – 5 days: Selectively, 20% study bearish in the 50’s

Should I be trading: SIPs, don’t expect multi day moves to hold. Lots of things look to be setting up short.

Todays watchlist (stocks setting up): Symbols from TC2000
OUST
RKLB
DOCN
HPE
SOXL
QCOM
DELL
TQQQ
CRWV

Last Updated on October 20, 2026 by PeteStilgoe