Finance Hits Retracement – AI/Semis Get Oversold Bounces – Biotechs Lead

Today’s report focuses on four ETFs that are setting up near Bullish Setup Zones. When correcting after a big advance or when forming a bullish continuation pattern, these are zones to watch for firming and a reversal. The firming means buying and selling pressure moved into equilibrium and this sets the stage for a potential reversal and breakout. This report shows the breakout levels to watch and re-evaluation level to consider should we see breakouts. $ITA $OIH $XES $MOO

Today’s report will focus on the broader market because the ingredients are in place for some choppy trading and a rally into yearend. Trading could be choppy because the Fed meets today and tomorrow, earnings season is in full swing and the US elections are next week. I am sure that there are a dozen other reasons (yields spreads, seasonal patterns, rates, oil etc…). $SPY $QQQ $XLK $IJH $IJR $SUPA50R $UST2Y $USL $SPXA200R

The Energy SPDR is the runaway year-to-date sector leader with the Technology SPDR at distant second. The energy sector sets the stage for the industry group ETFs within the sector. If the sector is bullish, then we want to look at industry groups and stocks within this sector for bullish setups. $XLE $XOP $CRAK $OIH $XES $AMLP $MLPX

Today’s report will focus on the two software ETFs and Adobe, a software stock that could be turning the corner. Software is in focus because this group is showing leadership since June. For example, the Software SPDR (XSW) is up 25% since June, while the Semiconductor SPDR (XSD) is down 24%. Semiconductors, however, are outperforming software when we go back to April and include the massive surge in April-May. Perhaps semis will come back, but right now software shows relative and absolute strength. $IGV $XSW $ADBE

Tech leadership is slipping as semiconductors break down and the AI trade unravels in October. XLK and QQQ remain well above their rising 200-day SMAs, which suggests they are still in long-term uptrends. However, both produced outsized declines in October and their September breakouts failed. Outsized declines are sudden and sharp declines that can derail an uptrend. $QQQ $QQEW $SPY $MAGS $XLK $AIQ $ARTY $SMH $DRAM $SOXX $SKYY $CIBR $IGV

SPY and QQQ are still in long-term uptrends, but the market is having a rethink here in October. After leading for most of 2026, the Technology SPDR and QQQ are lagging in October as they fell sharply the last six days. Moreover, both fell sharpy after hitting new highs and such declines can derail an uptrend. Elsewhere, the junk end of the stock market is bearing the brunt of selling pressure with the Russell 2000 and Russell Microcap ETFs leading the way lower. Breadth Thrust setups were brewing in early October, but the actual thrust signals failed to materialize. $IJR $IJR $IWM $IWC $XLK $QQQ $QQEW $SMH $SOXX $DRAM

Today’s report will dive into the industrials sector. Frist, the Industrials SPDR is setting up as it corrected to a Bullish Setup Zone and firmed. Second, the top 11 component stocks are mixed with four sporting recent breakouts. Attention then turns to the Aerospace & Defense ETF and Clean Edge Green Energy ETF as both hit Bullish Setup Zones. $XLI $ITA $QCLN

Today’s report will dive into the Healthcare sector, which is one of the best performing sectors over the last one, three and six months. The Healthcare SPDR formed a small bullish continuation pattern and broke out. Ten of the top eleven stocks are above their 200-day SMAs with AbbVie leading. We then turns to the corrective patterns in the biotech ETFs, the breakout in the Medical Devices ETF and the upturn in the Healthcare Providers ETF. $XLV $IBB $XBI $IHI $IHF

Large-caps, tech and hyper-scalers are leading the market as SPY, QQQ, the Technology SPDR, and Mag7 ETF all hit new highs in October. Small-caps and mid-caps are lagging as they fell to their rising 200-day SMAs, but show signs of short-term upturns over the past week. Last week I showed thrust indicators setting up (Zweig Breadth Thrust and %Above 50-day SMA). These have yet to trigger, but I will watch closely in the coming days/weeks. $SPY $QQQ $IJR $IJH $XLK $MAGS $AIQ $ARTY $IYZ $SMH $SOXX $DRAM $BLOK $IGV $CIBR $SKYY

The strength we are seeing here in early October started in early August when SPY, QQQ and several tech-related ETFs broke out with surges. These same ETFs corrected again in September, but held their early August breakout zones. Moreover, they broke out again in the second half of September. These breakouts keep the bigger August breakouts alive. SPY, QQQ, XLK and MAGS hit new highs in October because they are following through on prior breakouts. $SPY $QQQ $XLK $MAGS $IJR $IJH $AIQ $ARTY $SMH $SOXX $DRAM $VOLT $IYZ $BLOK

There was a lot of selling pressure in September as downside participation hit an extreme. Selling pressure was concentrated in the Equal-weight S&P 500 (RSP), Small-caps (IJR) and Mid-caps (IJH). These oversold extremes could give way to an about face and bull stampede. It hasn’t happen yet, but this possibility should be on our radar as we enter the fourth quarter. $SPY $NYA $SPXA50R $SPXADP

Healthcare related ETFs are leading the market since June. QQQ and XLK peaked in June, fell into July and recovered with gains into September. Both are still just below their June highs. In the meantime, money moved into healthcare-related ETFs with the Healthcare SPDR and Biotech ETFs gaining over 15% since June. Healthcare is the strongest sector since June and the second strongest sector since May. It is also the fourth biggest sector in the S&P 500 (9.36%). $XLV $IBB $XBI $SBIO $IHI $IHF

The broader market was hit rather hard in September as macro headwinds swirled. These headwinds, however, did not affect QQQ, the tech sector and the healthcare sector. Strength in these two sectors is propping up SPY, which is down a fraction month-to-date (-.19%). It is hard to have a bear market when SPY is above its 200-day and tech is leading. Today’s report will focus on the headwinds, key levels for the leaders and an alternative interpretation of the SMH chart. $SPY $QQQ $XLK $MAGS $AIQ $ARTY $SMH $SOXX $DRAM

There is some serious bifurcation in the stock market right now, but this has yet to affect SPY, which is heavily weighted towards the Technology sector. Tech and AI are strong since August, but Industrials, Retail and Housing are weak. This is a sort of rolling rotation where money moves out of one part and into another. Today’s report will focus on the leaders: tech, AI, MAGS, cybersecurity, software and cloud. $SPY $QQQ $XLK $XLC $MAGS $AIQ $ARTY $SMH $DRAM $SKYY $CIBR $IGV

Commodities, stocks and the Dollar are higher since March, while gold and bonds are lower. I picked March because this is when the war with Iran broke out and oil surged. The 12-month Oil Fund (USL) is up some 47% since March. Other commodity groups are also higher (base metals, copper and agriculture). $GLD $GDX $SLV $UST2Y $SPY $IWM $RSP $CPER $DBB $USL $SRUUF $BLOK

Today’s report focuses on two stocks from the Healthcare Providers ETF (IHF) and two from the Aerospace & Defense ETF (ITA). IHF is leading the market as it consolidates near its highs. HCA Corp and Universal Health Services show signs of bottoming over the last few months. Aerospace & Defense was leading the market in August, but took a hard hit over the last four weeks. Lockheed Martin and RTX Corp pulled back within the group and became oversold within their uptrends. $LMT $RTX $HCA $UHS

The weight of the evidence remains bullish for stocks, but oil, interest rates and inflation are taking their toll on parts of the market. Small-caps are bearing the brunt of recent selling pressure with large-caps and large-cap techs holding up better since August. Semis are at a moment of truth, while the AI/Tech ETFs are holding their breakouts. Elsewhere, I am seeing bullish setups in Regional Banks, Telecom, Healthcare Providers and Medical Devices. $SPY $QQQ $XLK $IWM $AIQ $ARTY $SMH $SOXX $DRAM $IHI $IHF $KRE

The intermarket picture is negative for the average stock (equal-weights, small-caps and mid-caps). Rates are rising and this rise is accelerating. Rising oil prices are stoking inflation. Value and energy are leading within the stock market, while consumer discretionary and industrials move lower. Tech and semis are holding up well since August, and keeping SPY/QQQ afloat. Today’s report also covers gold, copper, uranium and blockchain. $IEF $UST2Y, $UST10Y, $XLY $GLD $CPER $SRUUF $BLOK

Technology, energy and utilities moved higher on Tuesday, while the other eight sectors closed lower. Performance was also lopsided within the technology sector. Semis (SOXX, SMH, DRAM) moved higher, while the MAG7 (MAGS), Software (IGV), Cloud (SKYY), Cybersecurity (CIBR) and Fintech (FINX) moved lower. Tuesday is just one day, but the split has been building since August. Tech and semis are holding up, but there are sizable pockets of weakness that include consumer discretionary and housing. $USL $XLE $XLU $IJR $IJH !GT200SPX

While there are some sizable pockets of weakness within the market and rolling rotations underway, the weight of the evidence remains bullish. It is still a bull market. Tech surged in April-May, corrected in June-July and resumed its leadership in August-September. Tech leadership came at the expense of industrials, utilities, housing and retail, which moved lower. Seasonally, September is one of the weakest months for stocks. Perhaps this seasonal pattern is already playing out in some of the more economically sensitive areas. $SPY $QQQ $XLK $AIQ $ARTY $IYZ $SKYY $IGV $CIBR