Weekly Report

As we have mentioned in various venues, the trick now is to buy the very best fundamental companies and charts and sell the others on rallies. We have two indications to watch regarding the direction of rates – MUB above 105 and TLT above 82.50 would suggest a decline in rates into yearend.

We have not been emphasizing Tech for some time and again suggest buying the very best companies as that sector could fragment. We remain with our view that a close below 2.80 for $GASO would lead to a decline into the 2.30’s.

The broad market is still trading well even after Friday’s Tech decline. We still think the rest of the year should be positive and we still think that Small Cap will perform well.

Stocks have started to rally this week, and we like the trading, which is slowly trending up. SPY, a move through 772 would imply continued upside.

We took a look at some of the NASDAQ breadth indicators and most have entered buy patterns, such that we should see some rally in the NASDAQ starting soon, certainly within the next few weeks.

Equity markets continue to consolidate in an indecision pattern that looks like it will resolve to the upside. We have two inside days on SPY and QQQ, a sign that this market is getting ready for a move.

We remain optimistic about a rally starting from this general area. Our plan has been to accumulate SMIN weekly recycles, so now is a good time to start buying.

We would use dips to buy stocks of interest. TLT has started a rally that should continue, which will ultimately help stocks. GLD continues a bottoming pattern.

October is supposed to be a difficult month, but it looks as if this will not be the case this time. As long as SPY remains above 750 and QQQ above 714, equities should trend up. We think that intermediate rates are peaking.

SPY and QQQ have made new highs. IJR has rallied as well, and above 141 would target a move to new highs. While we think a bond rally could continue through yearend, we are still concerned that rates will be higher in 2027.