# We've Seen This Before... (Sp500, Nasdaq) **Date:** 2026-10-05 **Source:** [YouTube](https://www.youtube.com/watch?v=SBWKr5ryg_c) ## Main Thesis The market is exhibiting extreme divergence, with AI-driven tech stocks pushing to new highs while most other sectors, financials, and bonds show significant weakness. A surging US dollar is adding pressure, creating a challenging 'stock picker's market' where overall breadth is very poor. ## Charts & Technical Analysis ### 1. US Jobs Report (None) **Bias:** BEARISH The September jobs report was weak, with only 29,000 jobs added versus 90,000 expected. Previous months' numbers were also revised downwards, continuing a trend of weakening economic data for 2026. This could suggest a need for rate cuts despite inflation. ### 2. Tech Sector (None) **Bias:** BULLISH **Pattern:** New all-time high **Historical Comparison:** Historically, when the tech sector makes a new high, the market has been bullish 100% of the time one month later based on a decade of data. The tech sector is the elephant in the room, making new highs while everything else is down. It is the primary driver of the market, with 44.6% of its stocks above their four-week highs, compared to other weak sectors. This is described as an AI-driven, 'data center center economy'. ### 3. Nasdaq (None) **Bias:** BULLISH **Historical Comparison:** The current rally is compared to the 'ChatGPT versus Netscape phenomenon', tracking a very similar path to the dot-com bubble. The market is now 4 years into this run, past the typical 3-3.5 year mark, questioning if it will reach the 5.5-year average bull market length. The Nasdaq is following a similar trajectory to the tech bubble era. The rally has been ongoing for 4 years. The analysis questions whether it can continue towards the 5.5-year average for bull markets. ### 4. S&P 500 (None) **Bias:** NEUTRAL **Historical Comparison:** October seasonality in midterm election years is discussed, with mixed results depending on the president's party, offering no clear path. The S&P 500's performance in October during midterm years is generally positive but not a clear signal. Price action is considered more important. The index is heavily influenced by tech, with the top 10 tech stocks making up 41% of the S&P. ### 5. Gold (None) **Bias:** BEARISH **Pattern:** Series of lower lows and lower highs Gold is struggling due to the strong US dollar and rising interest rates. Despite strong ETF buying flows, the price is being depressed. It is currently in a downtrend of lower lows and lower highs, trapped in a hard place. ### 6. US Dollar (DXY) (None) **Bias:** BULLISH **Pattern:** Breakout, Wyckoff style bottom **Key Levels:** 103.80 resistance, 104 resistance The US Dollar made a massive breakout to an 18-month high, against the consensus for a weaker dollar. It is showing strong momentum, with the next supply area around 103.80 to 104. This strength is putting pressure on other currencies and commodities. ### 7. Move Index (None) **Bias:** NEUTRAL **Pattern:** Spiking The Move index (bond volatility) has been spiking, which is an early warning sign or 'canary in the coal mine' for stocks. However, the stock market has not reacted to this stress in the bond market yet. It's described as the 'calm before the storm'. ### 8. High Yield Bonds (None) **Bias:** BEARISH High yield is 'absolutely flying', indicating rising yields and falling bond prices. This suggests there is risk in the bond market, but the stock market is ignoring it for now. ### 9. QQQ (Nasdaq ETF) (None) **Bias:** BULLISH **Pattern:** Flag **Key Levels:** 750 call wall (last week), 760 call wall (current) The Qs have seen very large on-market trades (5th, 6th, and 25th largest). It made an all-time high and is in a series of higher highs and higher lows. Some see a flag pattern. However, the large transactions could be a sign of distribution (a Wyckoff concept), making the situation fascinating but uncertain. ### 10. Bitcoin (BTC) (None) **Bias:** BULLISH **Key Levels:** 85,000 resistance, 90,000 liquidation cluster Bitcoin hit 85,000 and rejected. It has been technically strong and resilient, with strong flows supporting its rally since late August. The largest liquidation clusters now sit above 90k. It is currently selling off a little from resistance but has been making higher highs and higher lows. ### 11. Market Breadth (Percentage of stocks above 20-day MA) (None) **Bias:** NEUTRAL **Pattern:** Oversold bounce **Key Levels:** 20 support The percentage of stocks above the 20-day moving average hit below 20 last week and rallied off that level. This is a normal oversold bounce, but the key question is whether it's a 'dead cat bounce' or a genuine recovery. ### 12. S&P 500 Equal Weight (RSP) (None) **Bias:** NEUTRAL **Pattern:** Bounce from critical level The equal-weight S&P 500 also came back to and rallied off a critical level, indicating some broad market participation in the bounce. ### 13. Regional Banks (KRE) (None) **Bias:** NEUTRAL **Pattern:** Bounce from critical level KRE rallied off a critical level after a huge push down that took it outside its Bollinger Bands. This does not necessarily mean it's a real rally, just a bounce from an oversold point. ### 14. Financials (XLF) (None) **Bias:** BEARISH **Pattern:** Divergence Financials came down to a key level being watched. Major banks were down almost 10% while the broader market was making highs. This divergence is a rare and important warning sign. ### 15. US 2-Year Yield (None) **Bias:** BEARISH The 2-year yield dropped off more significantly after the jobs report and did not recover as much as longer-term yields, showing where the Federal Reserve has more control. ### 16. Eurozone 2-Year Yield (None) **Bias:** BEARISH **Pattern:** Falling off The Eurozone 2-year yield has seen a significant fall, suggesting more pronounced economic weakness in Europe compared to the US. ### 17. Semiconductors (SMH/SOX) (None) **Bias:** BULLISH Semiconductors had a good week. It became apparent that Wall Street was buying the sector starting around mid-September. ### 18. Magnificent Seven (MAGS) (None) **Bias:** BULLISH **Pattern:** Technical breakouts The Magnificent Seven basket started to improve and show technical breakouts in early September, and the rally has been a continuation of that move. ### 19. Nvidia (NVDA) (weekly) **Bias:** BULLISH **Pattern:** All-time high Nvidia reached an all-time high before selling off due to call resistance into Friday's close. However, it still achieved an all-time high weekly close, which is significant. The stock remains in a series of higher highs and higher lows. ### 20. Copper (None) **Bias:** NEUTRAL Dr. Copper looks 'a little sick, but not super sick' because it has not yet lost its key trend lines. It is being watched closely as an economic indicator. ### 21. Silver (None) **Bias:** BEARISH **Pattern:** Series of lower lows and lower highs Similar to gold, silver is trapped and in a downtrend of lower lows and lower highs, struggling against the strong dollar. ### 22. Brent Crude Oil (None) **Bias:** BULLISH **Pattern:** Holding trend line **Key Levels:** 104 resistance Brent has been strong and resilient, holding a 'beautiful trend line'. It has made a little higher high and is currently dealing with resistance around the 104 level. ### 23. WTI Crude Oil (None) **Bias:** BEARISH WTI looks 'weak and horrible and down' in comparison to Brent crude, showing divergence within the energy market. ### 24. S&P 500 Futures (None) **Bias:** BULLISH S&P futures are holding up strong. After taking a lower low and hitting a put wall last week, they rallied back to take out a slightly higher high, showing relative strength for now. ## Regime / Cycle Analysis The market is in a 'K-shaped' or 'data center center economy' regime, driven entirely by AI and a few large tech stocks. This has created a major divergence where tech indices make new highs while the broader market, financials, and bonds show significant weakness. Intermarket analysis shows stress signals from the bond market (spiking Move Index) and a strong US dollar that are being ignored by equities for now. The analysis emphasizes that this is a 'sector picker's market' where buying the entire market is not an effective strategy. ## Key Calls & Predictions - The divergence between financials (down 10%) and the S&P 500 (near highs) is a rare and important warning sign. - The spiking Move Index (bond volatility) is a 'canary in the coal mine' that could cause problems for stocks if it continues to break out. - The US Dollar (DXY) is likely to continue its strength towards 103.80-104. - The current environment is a 'stock picker's market' or 'sector picker's market', not one for broad index investing. - The Nasdaq's new highs are accompanied by unusually large transactions, which could be bullish flow or bearish distribution, warranting close observation. ## All Instruments Mentioned S&P 500, Nasdaq, US Jobs Report, Tech Sector, Gold, Silver, Oil, US Dollar (DXY), Treasuries, Bonds, Move Index, High Yield Bonds, QQQ (Nasdaq ETF), Bitcoin (BTC), Private Equity, Market Breadth (Percentage of stocks above 20-day MA), NYSE Composite (NYA), Advance-Decline Line, S&P 500 Equal Weight (RSP), Regional Banks (KRE), Financials (XLF), US 2-Year Yield, US 10-Year Yield, US 20-Year Yield, Eurozone 2-Year Yield, Japanese Yields, Korean Market, Semiconductors (SMH/SOX), Magnificent Seven (MAGS), Nvidia (NVDA), Copper, Brent Crude Oil, WTI Crude Oil, C R A K, UK oil, S&P 500 Futures, EUR/USD, CAD --- *Generated by FX Evolution Monitor on 2026-10-05 23:02:11*