Welcome back to your weekly market checkup!
I hope you had an awesome week!
ICYMI, you can see the latest Top Pick of the Week here →
Top Pick of the Week: Utilities Got Smashed. Now I Have My Trigger.
Sometimes the most interesting chart isn’t sitting at the top of the leaderboard.
A quick highlight from last week →
Taiwan Semiconductor Mfg TSM 0.00%↑ banged an extreme-high RSI reading and hit its previous high target zone on Friday signaling it’s time to lock in some profits here!! TSM was one of our Top Picks of the Week back on 9/9/26.
Price is still trading undervalued here according to Morningstar. If this was simply a swing trade for you, you could close the trade. If this is a position trade, you could lock in profits and leave some to run because TSM is still undervalued and you also never know how high stocks can go!
Remember, don’t cut your winners too short! Lock in profits, but let your winners run. Congratulations to you in the TSM / TSMX trade!!
Let’s dig into last week’s market recap and the playbook for the week ahead →
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The Leaders Are Running. I’m Hunting The Next Setup.
The Nasdaq QQQ 0.00%↑ is running, Semiconductors SOXX 0.00%↑ are running, and Bitcoin (BTC) is running.
So naturally, I’m looking somewhere else.
Some of our strongest areas are pushing toward extreme-high RSI readings, while underneath the leaders, potential setups are developing in Industrials XLI 0.00%↑ , Energy XLE 0.00%↑ , Small Caps IWM 0.00%↑ , Financials XLF 0.00%↑ , and a few beaten-down corners of the market.
That’s where my attention is going next and Friday gave us a perfect example of the process.
Taiwan Semiconductor Mfg TSM 0.00%↑ , my September 9th Top Pick, reached my previous-high target zone and hit an extreme-high RSI reading. So I took some profits.
→ Find the setup. Wait for the trigger. Let the trade work. Pay yourself.
Now I’m looking for where the next opportunity may be developing. Let’s get into the Playbook. 👑
I. The Market Vitals
Bitcoin (BTC) was the strongest asset on my Market Vitals board this week, followed by the Nasdaq QQQ 0.00%↑ .
They were also the only two that finished green.
The S&P 500 SPY 0.00%↑ , the Dow Jones DIA 0.00%↑ , Oil USO 0.00%↑ , Gold GLD 0.00%↑ , and long-term Treasury bonds TLT 0.00%↑ all finished red.
Leadership is still there.
Participation? Much more uneven.
Bitcoin (BTC) has held its distribution zone, but is now climbing higher and pushing toward an extreme-high RSI reading.
Strong assets can stay strong, so I’m not calling a top.
But at this stage? I’m not chasing it.
The Nasdaq QQQ 0.00%↑ broke out of its accumulation zone and continues to move higher.
The QQQ is firmly on the running side of my board now because the setup already happened.
I’m respecting the strength and letting it run.
The SPY closed above its 20-day simple moving average and finished the week with a doji near the top of its current zone.
Now I want confirmation.
Can SPY break above this zone and continue higher?
No prediction needed. Let price answer.
The Dow Jones DIA 0.00%↑ is sitting just above its 200-day SMA and appears to be building a possible accumulation zone, but price remains below the 5-day EMA.
So the DIA is on my radar, but I don’t have my accumulation entry trigger yet.
Setup? Yes. Trigger? Not yet.
Oil USO 0.00%↑ continues to hold inside its consolidation zone.
The MACD histogram stopped moving lower, ticked upward, and flattened. Downside momentum has stopped deteriorating for now.
The question is simple: Does oil hold this zone and move higher—or finally break lower?
With Energy XLE 0.00%↑ setting up above its 200-day SMA, I’m keeping a close eye on it.
TLT was the weakest asset on my board. Bonds remain below the 200-day SMA and in a decline, with RSI at an extreme-low reading.
That tells me selling is stretched. It doesn’t tell me the bottom is in.
TLT stays on the radar until price gives me something more.
We have very different parts of the market sitting at very different stages.
Running: BTC and QQQ
Potential breakout: SPY
Possible accumulation: DIA
Decision point: Oil
Oversold radar: TLT
→ That’s the “big picture” map.
Here’s how the 7 major asset classes ranked this week
Bitcoin ($BTCUSD)
The Nasdaq-100 QQQ 0.00%↑
The S&P 500 SPY 0.00%↑
Oil USO 0.00%↑
The Dow Jones 30 DIA 0.00%↑
Gold GLD 0.00%↑
20 Year Bonds Treasury ETF TLT 0.00%↑
♥️ Market Pulse: 2/7
2/7 assets are up.
BTC and QQQ are up.
GLD, SPY, DIA, USO, TLT are down.
The leaders can keep running. I’m hunting what could run next. 👑
II. Section Rotation
The sector board tells the same story as Market Vitals: Leadership is narrow.
Only 3 of 11 sectors finished the week green, while 8 finished red and only four sectors are trading above their 200-day simple moving averages:
Technology XLK 0.00%↑ , Energy XLE 0.00%↑ , Financials XLF 0.00%↑ , and Healthcare XLV 0.00%↑ .
The other seven are below. So I’m not asking what performed best last week.
I’m asking: What could be setting up next?
Technology XLK 0.00%↑ was the strongest sector of the week. The XLK pushed to a new high with and RSI around 68, putting it close to an extreme-high reading.
The move is already underway. I’m letting the leader lead.
Energy XLE 0.00%↑ was the second-best performing sector and is setting up above its 200-day SMA.
Now connect that back to oil. USO is holding inside its consolidation zone, and downside momentum has stopped deteriorating for now.
If oil holds and starts moving higher, I want to see whether XLE follows.
Financials XLF 0.00%↑ tested its 200-day SMA and closed back above it.
We also have a doji bar and an extreme-low RSI reading.
That tells me the selloff is stretched at an important technical level, but I don’t have confirmation of a reversal yet.
XLF stays on the watchlist.
Industrials XLI 0.00%↑ are sitting right around its 200-day SMA.
Price tested the 20-day SMA, but closed back below it, so the breakout isn’t confirmed. I like the location. Now I need price confirmation.
The setup is developing, but the breakout isn’t confirmed.
The Beaten-Down Side of the Board
Industrials, Communication Services, Utilities, Consumer Staples, Consumer Discretionary, Materials, and Real Estate are all below their 200-day SMAs.
That’s a big chunk of the market still trading underneath its longer-term trend line, but beaten down doesn’t mean buy. It means look closer.
Utilities XLU 0.00%↑ gave us a perfect example this week and is one of my favorite setups this week.
The XLU moved into my accumulation zone and eventually closed above the 5-day EMA, giving me my accumulation entry trigger.
That led us to Duke Energy Corp. DUK 0.00%↑ Wednesday’s Top Pick.
Now I’m watching for that same kind of progression elsewhere.
Here’s my sector map:
Running: Technology
Setting up: Energy, Industrials
Oversold watch: Financials
Beaten-down radar: Utilities, Communication Services, Consumer Staples, Consumer Discretionary, Materials, Real Estate
Technology still has the crown. I’m watching who wants it next. 👑
III. Important Secondary Assets & Industries
Now we go underneath the market.
We know where the leaders are. I’m looking for where the next trade may be developing.
Semiconductors continue to lead. SOXX has broken out and is moving higher, with RSI approaching an extreme-high reading.
The setup already happened. I’m managing the move, not chasing it.
Small caps are giving me a very different chart.
The Russell 2000 IWM 0.00%↑ pulled back to its 200-day SMA and is building an accumulation zone and price is also above the 5-day EMA.
That puts IWM / URTY on my trade-idea list this week.
While QQQ and SOXX are already running, IWM is sitting much closer to an area where I can define my setup and manage my risk.
This is exactly the kind of chart I’m hunting.
Regional Banks KRE 0.00%↑ stay on my watchlist as I monitor the potential setup developing in Financials XLF 0.00%↑ .
If Financials begin to turn, I want to see whether Regional Banks participate.
For now?
XLF and KRE are on my radar. Not a trade I need to force.
Healthcare XLV 0.00%↑ and Biotechnology IBB 0.00%↑ both attempted breakouts and they failed.
Price moved back below the 20-day SMA and into their accumulation zones.
That doesn’t mean I throw the charts away. The setup just changed.
Now I’m watching to see whether they rebuild inside accumulation and give me another opportunity.
Here’s the Trade Hunt map:
SOXX: Running
IWM: Accumulation setup
KRE: Developing watch
Healthcare & Biotech: Failed breakout, back in accumulation
The leaders have already made their move. I’m hunting the charts that haven’t. 👑
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