# Something Strange Is Happening To Markets... **Date:** 2026-09-02 **Source:** [YouTube](https://www.youtube.com/watch?v=bkCVxiIRyk4) ## Main Thesis The market is showing significant internal weakness with declining breadth and rising global bond yields, creating a volatile, 'kangaroo' environment. While defensive sectors like energy are outperforming, key areas like tech and gold are pulling back, and rising diesel prices are a growing inflation concern that could prompt a Fed rate hike. ## Charts & Technical Analysis ### 1. Advance/Decline Line (None) **Bias:** BEARISH **Key Levels:** below the 50-day moving average An excellent chart from David Keller shows that major markets are in decline, with less stocks going up and more going down. The Advance/Decline line is below the 50-day moving average, which indicates weakness underneath the hood and fewer sectors finding new highs. ### 2. JP2Y (Japanese 2-Year Bond Yield) (None) **Bias:** BULLISH **Pattern:** breakout Japanese 2-year bond yields are breaking up, which is putting pressure on central banks around the world to potentially hold, if not hike, rates. ### 3. US 10-Year Bond Yield (None) **Bias:** BULLISH **Pattern:** breaking to new highs The 10-year bonds have broken to new highs. This is happening across the board, with yields in Great Britain, Germany, and Australia also going up, putting pressure on property markets globally. ### 4. NAIM Exposure Index (None) **Bias:** NEUTRAL **Key Levels:** 102 read The NAIM Exposure Index, which tracks US equity exposure of active investment managers, is at a 102 read. This often means that managers are 'all-in', which is interesting given the recent large, potentially negative, trades seen in the QQQ. ### 5. Gold (daily, weekly) **Bias:** BEARISH **Pattern:** series of lower lows and lower highs **Key Levels:** 4240 support **Historical Comparison:** Seasonality chart from Polycarp shows a rally followed by a drop is common in early September. Gold has fallen below the first level of demand and is coming down aggressively like a 'freight train'. The key is to have patience and wait for market structure to form. A potential area of interest is 4240. The weekly chart shows a big rejection, but the location of the sell-off was not surprising. The GLD put zone is around 396. ### 6. Bitcoin (via IBIT) (None) **Bias:** NEUTRAL **Pattern:** tight range, pit **Key Levels:** call resistance Bitcoin is finding trouble at call resistance. If it can get through this level, it could go into positive gamma. For now, it remains in a very tight range, holding better than gold and silver in what is described as a 'pit'. Pullbacks after big moves are to be expected, and a close above resistance could lead to a squeeze. ### 7. Vanguard S&P Midcaps (None) **Bias:** BEARISH **Key Levels:** support line The Vanguard S&P Midcaps are getting down to a support line. This is important because the advance/decline line is dropping, showing weakness is 'sapping away at the markets'. ### 8. Copper (None) **Bias:** NEUTRAL **Pattern:** long-legged dogee fest **Key Levels:** 680 resistance Copper saw another rejection and is in a 'long-legged dogee fest', which suggests equilibrium where the market is neither super bullish nor super bearish. Atkinson has been looking for a 680+ close, which has not happened yet. ### 9. Great Britain 20-Year Bond Yield (None) **Bias:** BULLISH **Pattern:** new highs As an example of the global trend, Great Britain's 20-year bond yields are at new highs, reflecting a 'fear of the unknown' as bonds start moving for the first time in ages. ### 10. High Yield Junk Bonds (None) **Bias:** BEARISH High yield junk bonds dropped 1% in the last session. They are starting to drop because yields are going up. ### 11. LQD (Corporate Bonds) (None) **Bias:** BEARISH Corporate bonds are falling off, which Atkinson believes is a direct reflection of AI-related debt and markets getting 'a little bit jittery' about some IPOs and announcements. ### 12. TLT (20+ Year Treasury Bond ETF) (None) **Bias:** BEARISH Treasuries are dropping off and coming back down. Atkinson suspects the market wants to pressure the 'pain point' where a major investor ('Bessant') went long, as the street likes to punish these levels. ### 13. Airline Companies (None) **Bias:** BEARISH **Key Levels:** dropping it through support Rising diesel prices are causing airline company stocks to drop through support, putting real pressure on the American consumer. ### 14. Healthcare (None) **Bias:** BULLISH **Pattern:** series of higher highs and higher lows Healthcare, a defensive sector, is still holding up in these markets, showing a series of higher highs and higher lows when compared to other sectors. ### 15. Semiconductors (None) **Bias:** NEUTRAL **Pattern:** kangaroo market **Key Levels:** 540 support Semiconductors came down to put support around 540 and are trading there. The sector continues to be a 'kangaroo up down all around' market and is no longer leading. ### 16. KOSPI (None) **Bias:** BEARISH The South Korean market (KOSPI) is dropping, down 4% in what is described as a standard move for the index. ### 17. Nvidia (NVDA) (None) **Bias:** NEUTRAL Nvidia is just hovering around after its exceptional earnings result. ### 18. Silver (None) **Bias:** NEUTRAL **Key Levels:** holding on the demand Silver is holding a little bit better than gold, holding on the demand level. The next 24-48 hours are seen as very interesting. ### 19. US Oil (None) **Bias:** BULLISH **Pattern:** new high US Oil has made a new high, continuing its rally. ### 20. Crack Spreads (None) **Bias:** BULLISH **Pattern:** series of higher highs and higher lows Oil refineries (crack spreads) are still making a series of higher highs and higher lows, indicating a discrepancy not just in the barrel price but also in diesel, which is skyrocketing. ### 21. US 500 (S&P 500) (small time frames) **Bias:** BEARISH On small time frames, the US 500 could be seen as weak. A potential future key level is where S&P puts (both zero DTE and net expiration) are sitting. The transcript states a level of 7,500, which is a clear transcription error and has been omitted. The bias is that the market could head for these put levels before seeing any reprieve. ## Regime / Cycle Analysis The analysis centers on a macro theme of rising global bond yields (US, Japan, UK, Germany, Australia) putting pressure on central banks, property markets, and debt-laden companies. There's a discussion of a potential defensive rotation in the market, with energy outperforming while tech and other growth sectors weaken. The surge in diesel prices is highlighted as a key inflationary pressure affecting consumers (via airlines) and potentially leading to food price issues via agriculture. He also mentions potential late-cycle deregulation (SEC changing private market access for retail) as a theme to watch. ## Key Calls & Predictions - The next two months could be extremely volatile, based on historical patterns. - There is now a 60% chance of a Fed rate hike, which would put pressure on regional banks, biotechs, and the Russell 2000. - A defensive rotation may be starting, as shown by strength in energy and flatness in healthcare, utilities, and staples, but it needs to persist for three days to be confirmed. - Warning that the options market is pricing in extreme volatility (+/- 10% to +/- 20%) for small-cap and consumer discretionary stocks reporting earnings this week. - The S&P 500 could head down to test major put option levels before finding a reprieve. - Non-farm payrolls this week is a critical, market-moving event to watch. ## All Instruments Mentioned diesel, yields, bonds, US property, triple Q's, S&P 500, large caps, midcaps, small caps, healthcare, biotech, oil, energy, gold, technology, semiconductors, software, Russell 2000, credit default swaps, 100-year bonds, JP2Y, 10-year bonds, Great Britain bonds, Germany bonds, Australia bonds, PSQ, SSO, consumer discretionary, utilities, staples, agriculture, Bitcoin, IBIT, Vanguard S&P midcaps, copper, US 10-year, Great Britain 20-year, high yield junk, LQD, TLT, airline companies, KOSPI, Nvidia, Silver, US oil, crack spreads, US 500 --- *Generated by FX Evolution Monitor on 2026-09-07 20:00:56*