# The Last Time This Happened Was 2018...
**Date:** 2026-09-30  
**Source:** [YouTube](https://www.youtube.com/watch?v=MbJlreEtsA8)

## Main Thesis
The market is in a strange, bifurcated state with terrible breadth, which typically signals a 7-10% decline, yet major indices are held near all-time highs by a few concentrated AI and tech stocks. Meanwhile, the bond market is showing early signs of stress, setting a 'small alarm' that has historically preceded equity pullbacks, but the price action in tech has not yet broken down.

## Charts & Technical Analysis

### 1. "AI Bubble" Google Trend Search (None)

**Bias:** NEUTRAL
**Pattern:** Topped out

The Google trend search for 'AI bubble' appears to have topped out around the June/July period when hardware and semiconductor stocks saw a crash. Atkinson notes that when people think there's a bubble, markets often continue to make new all-time highs, and points out that despite the search trend declining, many tech stocks are still hitting all-time highs, with the rally becoming more concentrated in a few names like AMD and the Magnificent 7.

### 2. Russell 2000 (daily)

**Bias:** BEARISH
**Pattern:** 16 consecutive days closing below its open
**Historical Comparison:** The last time this happened was in 2018, near a market bottom.

The Russell 2000 has experienced a 9% peak-to-trough decline and has closed below its open for 16 consecutive days. This is an unusual streak, last seen in 2018 near a market bottom. This weakness is seen as a sign of stress in companies with high debt, such as regional banks (KRE), biotechs, and 'zombie businesses', which struggle to recapitalize as yields rise.

### 3. KRE (Regional Banks ETF) (None)

**Bias:** BEARISH
**Pattern:** Tipping over
**Key Levels:** level of demand
**Historical Comparison:** Weakness in financials was a precursor to the GFC, the 2022 decline, and the 'tariffs' period.

Atkinson states that financials and KRE look 'horrible' and are 'tipping over,' which is a historically significant warning sign. He highlights that the 7th largest transaction ever recorded on KRE just occurred at a 'level of demand'. However, he cautions that the last major transaction led to further selling, making this a critical point for the banking sector.

### 4. QQQ (Nasdaq 100 ETF) (None)

**Bias:** NEUTRAL
**Pattern:** Pinned between two tight call and put levels; pullback in time at resistance

The QQQ is described as the market to watch, as tech represents 41% of the market. It currently shows no extreme weakness and is seeing many cluster trades. The ETF is pinned between tight call and put option levels and is undergoing a 'pullback in time at resistance,' which is not necessarily a negative signal.

### 5. S&P 500 vs M2 Money Supply (None)

**Bias:** NEUTRAL
**Historical Comparison:** The ratio is at levels not seen since the 2000 dot-com bubble.

A chart from BarChart shows the S&P 500 relative to the M2 money supply is at levels last seen during the dot-com bubble. Atkinson believes this is not necessarily a chart that tops a market on its own, but it adds to the evidence that we are approaching a 'tipping point period'.

### 6. S&P 500 vs Low Volatility (None)

**Bias:** BULLISH
**Pattern:** Making new highs

This ratio chart is making new highs, which is generally a positive, risk-on sign for markets. Atkinson notes that this indicator is showing strength even while the QQQ has not yet made a new high, suggesting some underlying risk appetite, though it is concentrated in tech stocks.

### 7. US 10-Year Yield vs McDonald's (MCD) (None)

**Bias:** NEUTRAL
**Pattern:** K shape

A chart showing the US 10-year yield versus McDonald's stock forms a distinct 'K' shape. Atkinson describes this as a perfect visual representation of the K-shaped recovery theory, where different parts of the economy diverge, indicating that many people are struggling.

### 8. BofA High Yield Spread (None)

**Bias:** BEARISH
**Pattern:** Broken up
**Historical Comparison:** This has been synonymous with a pullback occurring in the past.

The BofA high-yield spread has 'broken up,' which is a warning sign for risk assets. Historically, this event is synonymous with an equity market pullback. This is part of the 'small alarm' being set by the bond market.

### 9. MOVE Index (None)

**Bias:** BEARISH
**Pattern:** Broken up; rallying
**Historical Comparison:** This is the most risk seen in the bond market since the 7-10% pullback in March.

The MOVE Index, measuring bond market volatility, is rallying and has 'broken up.' This indicates rising volatility and stress in bonds, representing the most risk seen since the March pullback. Atkinson states this is a sign that 'something is happening' in the bond market, even if stocks haven't reacted yet.

### 10. RSP/SPX Ratio (Equal-Weight vs Cap-Weight S&P 500) (None)

**Bias:** BEARISH
**Pattern:** At levels synonymous with topping or consolidation

The ratio of the equal-weighted S&P 500 (RSP) to the cap-weighted S&P 500 is back at very low levels. These levels are historically associated with either market tops or consolidation periods, highlighting the extreme weakness in the broad market underneath the headline indices.

### 11. Treasuries (None)

**Bias:** BEARISH
**Pattern:** Falling off

Treasuries are falling off as yields go up, which is an expected inverse relationship.

### 12. Korean Markets (None)

**Bias:** NEUTRAL
**Pattern:** Haven't made new highs

The Korean markets, often a leading indicator for global tech, have not made new highs, suggesting a lack of broad participation in the tech rally.

### 13. Semiconductors (None)

**Bias:** BULLISH
**Pattern:** Made a new high but struggling

Semiconductors have made a new high but are described as 'struggling.' Despite a selloff this week, they rallied straight back up, showing resilience. The market is very specific, with certain semiconductor stocks performing very well.

### 14. XLK (Tech Sector ETF) (None)

**Bias:** BULLISH
**Pattern:** Series of higher highs and higher lows

The technology sector ETF (XLK) remains in a clear uptrend, making a series of higher highs and higher lows, which is a positive sign for bulls.

### 15. Magnificent 7 (None)

**Bias:** BULLISH
**Key Levels:** holding above all-time highs

The Magnificent 7 stocks are holding above their all-time highs, which is another constructive sign for the market leaders.

### 16. Copper (weekly)

**Bias:** BULLISH
**Pattern:** Holding up; had all-time high weekly close

Copper is holding up well and recently posted an all-time high weekly close, which is a good sign for the global economy. It's considered an 'okay market for now'.

### 17. Gold (GLD) (4-hour)

**Bias:** NEUTRAL
**Pattern:** Relief rally
**Key Levels:** put support levels, 20 on the 4hour resistance

Gold held its 'put support levels' and is experiencing a slight relief rally after falling this week. However, it is still considered weak and faces potential resistance at the 20-period moving average on the 4-hour chart. For a real recovery, it needs to reclaim higher levels.

### 18. Silver (None)

**Bias:** NEUTRAL
**Pattern:** In limbo land

Silver is described as being in 'limbo land,' floating around a low level it recently established.

### 19. US Oil (None)

**Bias:** NEUTRAL
**Pattern:** Potential double bottom
**Key Levels:** testing the lows

US Oil has returned to test its recent lows. Atkinson notes this could be a potential double bottom, but it could also continue to fall into the election.

### 20. Energy Stocks (XLE) (daily)

**Bias:** NEUTRAL
**Pattern:** Strong trend
**Key Levels:** critical support, daily 50

Energy stocks are at a critical support point after briefly losing a key level and then bouncing. The trend has been very strong, with the daily 50 moving average providing good support. Atkinson suggests that a weakening energy sector could be a negative signal for capex spending.

### 21. CRAK (Crack Spreads ETF) (None)

**Bias:** NEUTRAL
**Pattern:** Fallen a little bit

The CRAK ETF, which tracks refiners, had a number one transaction recently and has fallen slightly since. He is watching its structure.

### 22. S&P 500 (SPX) (None)

**Bias:** NEUTRAL
**Pattern:** Pinned by options
**Key Levels:** put level

The S&P 500 is pinned by the options market, 'slamming into those puts and holding for now.' The market structure is holding around a key put level. (A specific level of '7660' was mentioned but is a clear transcription error and has been omitted).

### 23. Bitcoin (IBIT) (None)

**Bias:** BULLISH
**Pattern:** Low, high, lower low, watching for higher high
**Key Levels:** 85 alert, 81k demand zone

Bitcoin, via the IBIT ETF, is holding up well, pinned between tight option levels. ETF flows have been positive. The chart shows a pattern of a low, a high, and a lower low, and he is watching to see if it can make a higher high. He has an alert set just above 85 (likely $85k) and notes a potential demand zone around 81k.

## Regime / Cycle Analysis
The market is in a late-cycle period where stock and sector selection are paramount. The current bull run is in its fourth year, with historical averages suggesting it could last another 1.5 years. There is a clear 'K-shaped' dynamic, where AI/tech thrives on capex spending while the broader market and small caps suffer from rising yields. Atkinson also discusses the intermarket relationship between energy and tech, suggesting both need to remain strong to avoid a stagflationary environment, as a drop in energy could signal weakening capex spend, which would hurt tech.

## Key Calls & Predictions
- The market is unlikely to fall as long as AI-related tech stocks maintain their structure of higher highs and higher lows.
- If financials (KRE) continue to weaken, it could be a very significant bearish sign for the broader market.
- A breakdown in the Nasdaq 100 (QQQ) would be critical, as tech represents 41% of the market and is the main pillar of support.
- The bond market (MOVE index, high-yield spreads) has set a 'small alarm' that has historically preceded equity declines, but price action has not yet confirmed this warning.
- Watching the relationship between energy stocks and AI/capex stocks is important; if one weakens, it could be a sign of broader economic trouble.

## All Instruments Mentioned
Russell 2000, S&P 500, AMD, Magnificent 7, KRE, M2 Money Supply, SpaceX, Google, Bitcoin, Altcoins, QQQ, Gold, GLD, Utilities, Semiconductors, Tech Sector, XLK, Communications Sector, Healthcare Sector, Biotechs, Energy Sector, XLE, S&P 500 vs Low Volatility, New York Stock Exchange, US 10-Year Yield, McDonald's, MCD, BofA High Yield Spread, MOVE Index, RSP, Staples Sector, Triple C Bonds, Treasuries, Korean Markets, Copper, Silver, US Oil, CRAK, IBIT

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*Generated by FX Evolution Monitor on 2026-10-05 23:05:11*