WHERE THE STORM BREAKS.
Highlighting the Seven Charts which MOST stand out on my screens, and two NEW Thematic Longs lighting up our scans — showcasing the best opportunities I’m watching, and how I’ll be investing capital going forward.
Market Context:
- 1. Powerful forces are converging: A STORM is brewing, while pockets of LIGHT/OPPORTUNITY are opening.
- 2. Positioning remains a MINE FIELD: crowded trades are everywhere, beware consensus…
- 3. Sentiment is plunging: which part of the cycle is this?
PLAN:
Seeing big potential opportunities on the table for Q4 (Long AND Short)… getting this right could be a massive win to close 2026.
We’ll run through each Top Chart Setup, focusing on the WHY and most importantly, WHY NOW.
By the end of this report, we’ll build a complete plan with key signals to watch, and how we’ll be navigating markets from here.
Have a great week ahead!
CHART 1: STOCKS
THE TOP STOCK CHART I’M WATCHING:
Breadth is even more oversold than last week, nearly tied with the March 2026 bottom, and near the most oversold levels in recent years. Stocks remain in a range for now, while this sets the table for an upside resolution in time, pending a clear catalyst:
MARKET CONTEXT:
Though Breadth continues to drop, it’s close to an oversold Buy signal. There may be residual volatility, but I strongly believe this will set up a bigger rally. Monitoring for a turn:
Core Risk continues to drop rapidly. As I wrote last week: “There’s no strong signal either way yet, but at the pace this is moving, it could get oversold relatively soon.” Maybe a quick drop that shakes out buyers, completes the oversold signals, and sets up a strong year-end rally. Will be updating this closely:
The chop continues, with pockets of strength emerging:
SPY’s $765-768 range remains a potential bounce target, and I’ll consider putting on some tactical hedges there (cross that bridge if/when we get there).
QQQ would offer an interesting tactical hedge at $730. Maybe the market is ready to break out here — either way, staying open-minded:
Relative performance is perking up:
MAGS at a new all-time high, now maybe chops in this area a bit longer:
SMH showing leadership again, but needs a bit more work:
XLK remains impressive:
IGV continues to consolidate:
KSTR is starting to build some momentum — on watch for pullback Buy:
ARKK continues to lead higher:
Some pockets of light/opportunity are clearly emerging.
This looks like the final innings of a multi-month consolidation, and potentially the beginning of a broader market rally.
Having said that—
Not everything is working yet, and being selective is still key.
The unanswered question is:
Below, looking at the Russell and Equal-weight indexes — as proxies for market health/breadth — is this the bottom, or do they have room for a final capitulation?
Watching for the next move:
SUMMARY:
This is where experience AND a bit of patience will really pay off...
I think we’re in the following sequence:
- ✅ At the index level, the market may not be done chopping around.
- ✅ Understanding how to trade tactically around that, and WAITING for the best setups, is essential.
- ✅ Despite the index chop, individual stock leadership is clearly improving/strengthening.
- ✅ If indexes pull back again, leaders will just make higher lows.
- ✅ Watch the leaders and how they’re acting.
If there’s residual downside, it most likely would not be sustained — and Core Models would fire strong Buy signals (pending). If we get confirmation, I’ll press exposure aggressively for a rally. Stay tuned.
Every day counts.
I want to be positioned with THE best exposure here — taking full advantage of a potential new rally phase IF it builds momentum.
There’s always room to improve and adjust further:
To this goal, will be adding several NEW themes & names in this report.
Onwards…
CHART 2: VOLATILITY
THE TOP VOLATILITY CHART I’M WATCHING:
Volatility Clock — Stocks have gone 36 days without a 1% decline. Historically, after these levels were reached, the first down day tended to signal a tactical shift in market volatility (will update):
MARKET CONTEXT:
Also watching VIX, as it plunged back to 15 “on schedule” and is approaching my downside target:
If VIX retests support, will look for tactical hedges / publish a subscriber Note if we get active.
To be clear: this would be a hedge to take advantage of cheap levels — not a bet that things get out of control.
I’m purely interested in following the asymmetric setup and flow — while keeping in mind that VIX positioning is now at a new RECORD Short (see Flows & Positioning section later). VIX could squeeze even if Stocks just pull back a little.
Lastly, Credit Spreads may be forming an extended base — important to watch if they start moving up & out:
CHART 3: PRECIOUS METALS
THE TOP METALS CHART I’M WATCHING:
Gold is rolling up from a PERFECT setup:
MARKET CONTEXT:
Silver is also starting to show strength, on the cusp of a big breakout:
The Silver/Gold ratio is extremely coiled — ANY push higher would re-establish Silver as the leading Metal (a classic bullish signal):
Gold Miners are holding near key support — watching for stabilization/roll-up in this range:
Big picture:
Metals corrected before the Fed rate hike, and may be setting up a reaction similar to prior cycles (2004/2015):
Bottom line:
- ✅ Precious Metals held firm for weeks, despite a sharp rise in Rates and the Dollar.
- ✅ Gold & Silver made a textbook initial reaction this week.
- ✅ This week’s Buy on Silver was a solid start, and I want to press even more on confirmation. Risk remains tightly controlled either way.
Stay tuned.
CHART 4: DOLLAR
THE TOP DOLLAR CHART I’M WATCHING:
DXY is at PERFECT levels for a secondary top. The chart looks like a carbon copy of the scenario I drew weeks ago for a potential bounce target. Friday hit the exact resistance level, and made a Shooting Star:
If the buck turns here, the long-term chart could be “game over”:
From last week:
“Maybe a Fed rate hike catalyzes a rally in all markets? (Sell the rumor, Buy the news?)”
Precious Metals may be anticipating the Dollar’s turn — strength in Gold/Silver this week may be an initial signal — if confirmed this week, I will press exposure without hesitation.
The game is on…
CHART 5: RATES
THE TOP RATES CHART I’M WATCHING:
Bond Sentiment is in position for a major bottom. Monitoring for a turn UP:
MARKET CONTEXT:
Momentum at the long end is starting to “crack” — the 10YR and 30YR may be forming a topping divergence (against the 2YR and 5YR which remain near their highs):
As I wrote last week:
“Could the 10YR spike through 5% with a Fed rate hike — and then reverse?”
So far, that’s exactly what happened this week.
Watching the 10YR and 30YR closely for a turn in this range.
Remember:
Markets trade counterintuitively…
Rates sentiment was so washed out that the Fed hike could be a Sell the rumor / Buy the news — as it was in 2004/2015.
CHART 6: OIL & ENERGY
THE TOP OIL CHART I’M WATCHING:
Oil sentiment turned DOWN this week, completing a potential Major Top signal.
MARKET CONTEXT:
Oil traded into the gap target range and reversed lower, with a weekly Shooting Star — a potential exhaustion signal:
XLE and XOP are on the cusp of breaking down — these would complete significant tops:
Looking to Short a full-size position this week (will update).
OIH continues to lead lower — now with an active Sell signal:
This looks like an important turn forming…
The ramifications for Cyclicals & Rate-sensitives could be massive.
CHART 7: BITCOIN
THE TOP BTC CHART I’M WATCHING:
Bitcoin is pushing to initial target range, in a textbook repeat of the 2023 New Bull Market:
My ideal scenario could be in play — now comes the big test…
Zooming in:
BTC topped on the initial test with a ~68 RSI (point #1 below) then pulled back briefly. This could align with residual Midterm seasonality/weakness. If BTC breaks through with high momentum, it would be significant bullish signal (point #2 below):
Watching the next few days closely for the market’s decision.
A true breakout would be a game-changer.
Alternatively, a bit more chop would help build the foundation for a bigger breakout into later Q4.
Either way, BTC remains an area of STRONG interest.
Also important to note:
BTC-related stocks are starting to show strength — as we’ll show in the Portfolio section.
Let’s see what this week brings.
FLOWS & POSITIONING
Positioning extremes:
VIX positioning is at RECORD SHORT.
Rates positioning remains extremely low.
Industrial Metals, Gasoline, and Grains remain extremely crowded.
FX positioning is neutral — U.S. Dollar aggregate positioning dropped to 66th percentile. Yen is quickly approaching a crowded long, after the fastest positioning flip in history. This doesn’t mean the Dollar is set to rally broadly — only that the Yen trade may have been squeezed for now, and perhaps the pair settles into a range. Other USD pairs are still vulnerable to selling (GBP, EUR, AUD, CAD still have positioning imbalances with investors still overweight USD).
POSITIONING HIGHLIGHTS
Russell fund positioning remains extremely short:
Yen is now a crowded long:
This was the fastest Yen positioning flip in history:
VIX positioning made a record short this week:
Watching VIX levels this week — will update.
POSITIONING SUMMARY
- ✅ Positioning remains a mine field.
- ✅ Avoid crowded trades wherever possible…
- ✅ Staying disciplined and focusing only on BEST risk-reward setups — as we’ll highlight next.
PORTFOLIO HOLDINGS
The Portfolio Holdings page has been updated here.
“No forced trades — let the market come to us:”
- ✅ I want to be positioned with THE best exposure here — taking full advantage of a potential new rally phase IF it builds momentum.
- ✅ There’s always room to improve and adjust further:
- ✅ To this goal, will be adding several NEW themes & names in today’s report.
CHART HIGHLIGHTS & TOP SCANS
NEW THEMATIC LONG OPPORTUNITY
Keep a close watch on the Airline stocks here...
JETS and the big carriers are forming potential major bottoms:
Most importantly:
Airlines have traded flat for a MONTH, despite Oil rallying $20 (and jet fuel also up sharply).
If Airline stocks have stopped reacting to higher fuel prices, they’ll rip higher on any improvement in news.
Watching for roll-up confirmation.
THEMES AND STOCKS WHICH STOOD OUT THIS WEEK
Adding several NEW names today — some have not YET joined the rally, but our scans are starting to light up as they usually do at inflection points.
Some names are showing the potential to move imminently, and with potential massive upside on the charts.
Let’s see if they can build out from here:
🟢AI-RELATED
🟢BTC-RELATED & COMPUTE
FINAL THOUGHTS
Markets continue to search for a catalyst, while the “perfect setup” may be quietly building:
- ✅ Equities remain in a range — with models near strong Buy signals.
- ✅ Watching Tech and Cyclicals/Rate-sensitives for the next big opportunity. Key stocks are already leading higher — focus on strength, and new names ready to join the rally.
- ✅ BTC remains an area of strong interest.
- ✅ VIX could offer a cheap hedge at the right price — soon.
- ✅ Rates and Oil may be topping.
- ✅ The Dollar is at a critical decision point — a failure here could be a game-changer.
- ✅ Precious Metals may be anticipating the Dollar, with picture-perfect continuation Buy setups. Any more strength would be a major bullish confirmation.
These are BIG potential opportunities on the table for Q4 (Long AND Short)…
Getting this right could be a massive win to close 2026.
Stay laser-focused…
One day at a time, aiming for the home-run pitch.
Thanks for reading.
Onwards and upwards, -MC