Overall market trend: Bearish phase – day 10
Yesterdays market: Money entering the market – High buying pressure
TC2000 McClellan: -47
Stocks above 40PMA: 25
VIX: 14
52 week highs (US common stocks): 174
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 Uptrend
$QQQ: Uptrend
$SPY: Uptrend
$RSP: Downtrend
$DIA: Downtrend
$IWM: No trend
$BTC: Uptrend
$SQQQ: Downtrend
$UVIX: Downtrend
$TLT: No trend
$USO: No trend
$GLD: No trend
$SLV: No trend
$SLX: Downtrend
2%+ sectors yesterday:
- None
2%- sectors yesterday:
- None
Main sectors monthly trailing:
- Leading – $IBB $XLK
- Lagging – $XLU $XLI
Sub sectors monthly trailing:
- Leading – $SMH $HACK
- Lagging – $TAN $IYT
Bitcoin: 86k 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: Selectively
Are breakouts likely to work for the next 3 – 5 days: Selectively
Are breakdowns likely to work for the next 3 – 5 days: No
Should I be trading: Narrow breadth outside of tech and crypto, $SPY now in uptrend vs equal weight $RSP in downtrend
Not finding any setups as most have already gone, SIPs & EP9’s with strong CATs main focus, 20% study bullish now in the 80’s where as bearish sub 10 telling you breakdowns are not working.
Todays watchlist (stocks setting up): Symbols from TC2000
$QBTS,
$AAOI,
$RGTI,
$RDW,
$IONQ