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)
| Ticker | Company Name | Sector/Industry | Market Cap | YTD Return | Key Catalyst | Analyst Consensus |
|---|---|---|---|---|---|---|
| XOM | Exxon Mobil Corporation | Energy / Integrated Oil & Gas | refresh | refresh | All-time high 23 Oct; Q3 earnings Fri 30 Oct | refresh |
| CVX | Chevron Corporation | Energy / Integrated Oil & Gas | $430.2B (15 Oct) | +45.5% (15 Oct) | All-time high 23 Oct; Q3 earnings Fri 30 Oct | refresh |
| COP | ConocoPhillips | Energy / E&P | $170.3B (15 Oct) | +53.7% (15 Oct) | All-time high 23 Oct; Q3 earnings ~5 Nov | refresh |
| EOG | EOG Resources, Inc. | Energy / E&P | refresh | refresh | Leading S&P energy gainer on oil above $100; Q3 early Nov | refresh |
| OXY | Occidental Petroleum Corporation | Energy / E&P | refresh | refresh | High oil beta; named among Friday’s sector leaders | refresh |
| DVN | Devon Energy Corporation | Energy / E&P | refresh | refresh | Up >4% Friday; Q3 early Nov | refresh |
| FANG | Diamondback Energy, Inc. | Energy / E&P (Permian) | refresh | refresh | Up 3%+ on 16 Oct oil breakout; Q3 early Nov | refresh |
| APA | APA Corporation | Energy / E&P | refresh | refresh | Up >4% Friday; high-beta crude exposure | refresh |
| EQT | EQT Corporation | Energy / Natural Gas E&P | refresh | refresh | Gas and LNG pull-through from the Middle East disruption | refresh |
| SLB | SLB N.V. | Energy / Oilfield Services | refresh | refresh | Q3 (23 Oct): revenue $9.45B, adj EPS $0.64 (+16% QoQ); stock up >4% | refresh |
| HAL | Halliburton Company | Energy / Oilfield Services | refresh | refresh | Q3 (20 Oct): revenue $5.7B, Middle East/Asia +8% QoQ; up >4% Friday | refresh |
| BKR | Baker Hughes Company | Energy / Equipment & Services (LNG) | refresh | refresh | LNG equipment cycle; tracking oil services strength | refresh |
| VLO | Valero Energy Corporation | Energy / Refining | refresh | +66.3% (as of 2 Jul) | Diesel tightness lifting crack spreads | refresh |
| PSX | Phillips 66 | Energy / Refining & Midstream | refresh | refresh | Diesel tightness; Q3 late Oct | refresh |
| TRGP | Targa Resources Corp. | Energy / Midstream | refresh | refresh | Up >4% Friday; volume leverage to Permian activity | refresh |
| ETF | Energy Select Sector SPDR (XLE) | Sector ETF | — | +55.07% | Core theme proxy | — |
| ETF | VanEck Oil Services ETF (OIH) | Oilfield Services ETF | — | refresh | Services beta | — |
| ETF | SPDR S&P Oil & Gas E&P ETF (XOP) | E&P ETF | — | refresh | Equal-weight E&P | — |
Theme 2: AI-Era Cybersecurity & Software Rotation
| Ticker | Company Name | Sector/Industry | Market Cap | YTD Return | Key Catalyst | Analyst Consensus |
|---|---|---|---|---|---|---|
| CRWD | CrowdStrike Holdings, Inc. | Tech / Endpoint Security | refresh | ~+123% | +8.25% Friday on Evercore budget survey; record net new ARR $333M | refresh |
| PANW | Palo Alto Networks, Inc. | Tech / Network & Platform Security | refresh | ~+117% | +7.22% Friday on Evercore survey | Moderate Buy |
| FTNT | Fortinet, Inc. | Tech / Network Security | refresh | ~+141% | Q3 earnings Wed 28 Oct; Virtue AI acquisition | Mixed; targets $163–$215 (Rosenblatt $195, TD Cowen $215) |
| ZS | Zscaler, Inc. | Tech / Cloud Security (SASE) | refresh | refresh | Sector re-rating; fiscal Q1 late Nov | refresh |
| NET | Cloudflare, Inc. | Tech / Edge & Network Security | refresh | refresh | Q3 earnings expected late Oct/early Nov (confirm) | refresh |
| OKTA | Okta, Inc. | Tech / Identity Security | refresh | refresh | Record non-Q4 bookings; ~59x forward P/E, cheaper than peers | refresh |
| S | SentinelOne, Inc. | Tech / Endpoint Security | refresh | refresh | Lower-valuation endpoint alternative | refresh |
| RBRK | Rubrik, Inc. | Tech / Data Security | refresh | refresh | Cyber-resilience growth story | refresh |
| CHKP | Check Point Software Technologies Ltd. | Tech / Network Security | refresh | refresh | Q3 earnings expected late Oct (confirm) | refresh |
| NTSK | Netskope, Inc. | Tech / SASE | refresh | refresh | +9.37% Friday; among the day’s leaders | refresh |
| SAIL | SailPoint, Inc. | Tech / Identity Governance | refresh | refresh | Identity spend tailwind | refresh |
| TENB | Tenable Holdings, Inc. | Tech / Exposure Management | refresh | refresh | Q3 earnings expected late Oct/early Nov (confirm) | refresh |
| QLYS | Qualys, Inc. | Tech / Vulnerability Management | refresh | refresh | Q3 earnings expected early Nov (confirm) | refresh |
| VRNS | Varonis Systems, Inc. | Tech / Data Security | refresh | refresh | Q3 earnings expected late Oct (confirm) | refresh |
| RPD | Rapid7, Inc. | Tech / Security Operations | refresh | refresh | Laggard catch-up candidate; Q3 early Nov | refresh |
| ETF | First Trust NASDAQ Cybersecurity ETF (CIBR) | Cyber ETF | — | ~+51% | +7.4% last week | — |
| ETF | Global X Cybersecurity ETF (BUG) | Cyber ETF | — | refresh | Pure-play basket | — |
| ETF | iShares Expanded Tech-Software ETF (IGV) | Software ETF | — | refresh | +6.0% last week | — |
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
Last Updated on October 26, 2026 by PeteStilgoe