Significant Short Positioning in Russell 2000 A short squeeze could be brisk. $RTY $RUT $IWM

NASDAQ 100 Technical analysis: • NDX popped up on Friday above the Keltner channel with a bearish candle. • Was it a spinning top or inverse hammer? A close call, probably the former. • NDX should eventually visit the mid and bottom Keltner channels. • Notice short- and long-term negative divergences in RSI and the Bullish Percentage Index; the latter looks really bad. $NDX $NQ $QQQ

At the 2000 and 2007 tops, yields peaked first, stocks second, commodities third. The logic: higher rates slow the economy, stocks feel it next, commodities last. Today the 10-yr yield is still making new highs. Will the pattern repeat? $SPX $TNX

“Sell in May” ends in October. The weak half of the year runs from May through October. The strong half starts in November. October is the turn, not the start of the rally. The Dow followed that old seasonal path this year. Small stocks and the equal-weight S&P did too. The regular S&P and the Nasdaq did not. A few giant tech stocks hid a dip that showed up almost everywhere else. #SPX $DJI $NDX $RTY $SPY $QQQ $DIA $IWM

October has a bad name because that is when a lot of selloffs have stopped, not because the month itself is usually bad. Since 1945, a drop of 5% or more has ended in October 33 times, more than in any other month. March and September are next, with 23 each. Since 1950, 6 of 12 bear markets bottomed in October. An ordinary October is nothing special. Since 1950 the S&P has gained about 1% and finished higher a little more than half the time. A lot of those selloffs were already over in September or early October. A midterm October is different. The Stock Trader’s Almanac puts the average gain at about 3% for the S&P and 3.2% for the Dow. November is close behind, about 2.7%, and up more often. The real split is not the month. It is the half-year. May through October is roughly flat in most markets and down in bear markets. November through April has been up in bull markets, bear markets, and everything in between. That is the stretch that has paid.

S&P 500 Technical Analysis $SPX has shown resilience despite weak internals, with choppy intraday action within a downtrend. Bullish: - Bounced off June high support and remains above the 50-day MA. Bearish: - Closed below the middle Keltner band - McClellan Summation Index, a swing trend indicator, is still pointing down $SPY $ES