# This Market Is Going Crazy...
**Date:** 2026-09-03  
**Source:** [YouTube](https://www.youtube.com/watch?v=P-xYscWEHyk)

## Main Thesis
Market breadth is weakening significantly, with fewer stocks participating in the rally, even as major indices remain just 2% off all-time highs. This internal degradation, combined with rising bond yields and sector rotation out of tech, suggests a choppy, 'kangaroo style' market ahead for the volatile months of September and October.

## Charts & Technical Analysis

### 1. QQQ (None)

**Bias:** NEUTRAL/BEARISH
**Key Levels:** 700 put

A new number one largest transaction ever was recorded on the QQQ. Since then, the market has degraded and has not reclaimed that level, suggesting it may have been a sell. Breadth is declining. The market is currently above the 700 put level, which is noted as a net expiration level to watch, especially with Non-Farm Payrolls on Friday.

### 2. S&P 500 (daily)

**Bias:** NEUTRAL/BEARISH
**Key Levels:** 7500 put support
**Historical Comparison:** When August never closed below July's final trading day, the average path is a 'kangaroo style market'. The closest analog for the current market is 1978, which suggests a choppy market, weakness into midterms, and then a rally.

The S&P 500 is only 2% from all-time highs, but internal health is degrading. Less than 40% of stocks are above their 20-day moving average, and the advance-decline line is dropping, showing weakening breadth. On smaller timeframes, the market is making lower highs and lower lows, indicating a downtrend. A possible put support level is around 7500.

### 3. MLEN oscillator (McClellan Oscillator) (None)

**Bias:** BEARISH
**Key Levels:** 50
**Historical Comparison:** Compared to similar drops below 50 in 2018, 2099 (dot-com bust), 2021, and 2026.

The McClellan Oscillator has fallen below 50. Historically, when this has happened, the market was only up 27.3% of the time over the next month, suggesting potential for further weakness.

### 4. S&P 500 Forward P/E (None)

**Bias:** NEUTRAL

According to a chart from Duality Research, the S&P 500's forward P/E is in the middle of its bands, not at an extreme overbought or oversold level. However, Atkinson warns this could be misleading if we have seen peak earnings, as markets trade on future expectations.

### 5. JP 2-Year Bonds (None)

**Bias:** BEARISH
**Pattern:** breakout

The Japanese 2-year bond yields have continued to accelerate, part of a global trend of runaway bond yields (also seen in US, Great Britain, Germany, Australia). This is putting pressure on debt markets.

### 6. NAIM Exposure Index (None)

**Bias:** BEARISH
**Key Levels:** 102

The NAIM exposure was at 102 last week, which is considered pretty high. This indicates that positioning in US equities is high, and many funds are 'all in' with little cash on the sidelines.

### 7. Alcohol Sector (monthly)

**Bias:** BEARISH
**Pattern:** breakdown

Used as a cautionary tale. This sector, once considered a defensive growth engine, was disrupted by demographic shifts between 2016-2021. It illustrates that no sector is safe and highlights the disruptive potential of AI on other industries.

### 8. Midcaps (None)

**Bias:** NEUTRAL/BEARISH
**Key Levels:** at supports

The number of stocks going up in the midcaps has declined significantly over the last couple of weeks. The index is now at a very important support level.

### 9. US 10-Year Yield (None)

**Bias:** BEARISH
**Pattern:** new highs

The 10-year yield is making new highs, which is putting pressure on debt markets and equities.

### 10. BofA High Yield Option Adjusted Spread (monthly)

**Bias:** BEARISH
**Historical Comparison:** At extremely low levels similar to the dot-com boom and before the global financial crisis.

This spread is at extremely low levels, indicating extreme complacency in the corporate debt market. This is a warning sign, as similar low levels preceded major market crashes.

### 11. Google (GOOGL) (None)

**Bias:** BEARISH

The chart looks 'horrendous' and 'ugly'. The stock is weakening despite the company making huge profits, likely due to concerns over debt and competition in the LLM space, which is seen as a 'race to the bottom' on price.

### 12. Semiconductors (SMH/SOXX) (None)

**Bias:** NEUTRAL/BEARISH
**Pattern:** range-bound
**Key Levels:** put level support

Semiconductors ran into a put level and rallied off it, suggesting some defense for now. The sector is trading in a tighter range after recent volatility.

### 13. Semiconductors vs SPY (SMH/SPY) (None)

**Bias:** BEARISH
**Pattern:** underperformance

The ratio is showing continuous weakness, with semiconductors no longer outperforming the S&P 500 as they had been. This could signal a period of prolonged weakness for the sector.

### 14. Nvidia (NVDA) (None)

**Bias:** BULLISH

Described as the 'best of the best'. After doing nothing for about a year, it has started to pick up and is still showing signs of improvement, being well-set financially.

### 15. Gold (XAU/USD) (daily)

**Bias:** NEUTRAL
**Key Levels:** 4700 resistance

Gold came back to an important anchored VWAP, dropped below potential stop-loss levels, and then rallied. It found resistance at 4700 and is now testing a level of supply. The outcome of this test is uncertain.

### 16. Gold ETF (GLD) (None)

**Bias:** NEUTRAL
**Key Levels:** zero DTE puts support

Analysis of the options market shows GLD bounced exactly off the zero DTE put level. The current price is now around the new zero DTE put level, indicating options are influencing price action.

### 17. Silver (XAG/USD) (None)

**Bias:** NEUTRAL
**Key Levels:** supply/resistance

Silver was stronger than gold as it did not make a lower low. It has also recovered and is now coming up to test a resistance/supply zone where bears may be waiting.

### 18. Agriculture Sector (MOO ETF) (None)

**Bias:** BULLISH
**Pattern:** breakout

Agriculture stocks are 'going hard' and pushing higher. This is driven by rising costs, particularly from the increase in oil prices, signaling problems in the food industry.

### 19. US Oil (WTI/USO) (None)

**Bias:** BULLISH
**Key Levels:** resistance

Oil does not seem to be slowing down yet and is testing a resistance level. It doesn't look weak and could consolidate before breaking through.

### 20. Crack Spread (Diesel) (None)

**Bias:** BULLISH
**Pattern:** uptrend

The crack spread, representing diesel, is continuously making higher highs and higher lows, putting pressure on the system.

### 21. Bitcoin (IBIT ETF) (None)

**Bias:** NEUTRAL
**Pattern:** range-bound
**Key Levels:** call resistance, put support

Bitcoin is trapped in a tight range between call resistance and put support. It tested the put support in the last 24 hours. A break of this range could be explosive. Flows have been neutral during this consolidation.

## Regime / Cycle Analysis
The market is operating in a 'K-shaped economy' where the upper class thrives while the middle and lower classes struggle, impacting consumer-facing companies like McDonald's. There is a major theme of disruption from AI and GLP-1 drugs, which are fundamentally changing sectors once considered safe, like alcohol and fast food. Intermarket analysis shows rising bond yields are a key risk for equities, and there's a concerning divergence between complacent high-yield credit spreads and rising Treasury yields. A clear rotation is underway, with weakness in former leaders like semiconductors and strength emerging in other areas like energy and agriculture.

## Key Calls & Predictions
- Warning that market breadth is deteriorating, which is a significant weakness hidden by the high levels of the major indices.
- Prediction of a 'kangaroo style market' (choppy and sideways) for the S&P 500 through the historically volatile months of September and October.
- Caution that rising bond yields and potential stress in debt markets are a primary risk factor that investors must monitor.
- Advises patience, suggesting that when the market is confusing, the best action is often to do nothing and wait for a clear opportunity to emerge.
- Highlights the upcoming Non-Farm Payrolls report on Friday as a key event that could introduce significant volatility.

## All Instruments Mentioned
QQQ, S&P 500, MLEN oscillator, CNN Fear & Greed Index, Fed Funds Futures, Snowflake, Broadcom, Meta, Uber, JP 2-Year Bonds, NAIM Exposure Index, Alcohol Sector, McDonald's, Midcaps, US 2-Year Yield, US 10-Year Yield, Corporate Bonds, Junk Bonds, Treasuries, BofA High Yield Option Adjusted Spread, Diesel, Airlines, Consumer Discretionary vs Staples, Google, Semiconductors, Semiconductors vs SPY, Nvidia, Gold, Gold ETF (GLD), Silver, Agriculture Sector (MOO ETF), US Oil, Crack Spread, Nasdaq 100, Bitcoin (IBIT ETF)

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*Generated by FX Evolution Monitor on 2026-09-03 20:14:18*