Equity Clock

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Out now…

Our monthly report for October is available for download, providing insights, analysis, and trade ideas to navigate the market through the month(s)/year ahead.

Subscribe now to receive this 106-page report: https://t.co/v0AbRbXCcL

#Stocks #Bonds #Commodities #Gold

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Despite the ongoing influence on retail sales from the high cost of fuel (gasoline), consumer activity in Canada is on the decline heading through the back half of the year. Retail sales in Canada fell by 1.7% (NSA) in August, much weaker than the 0.3% decline that is normal for this summer month. The year-to-date change has dipped below the seasonal norm with an increasing number of categories showing below average trajectories heading towards the important shopping period at year-end. $STUDY $MACRO #CDNecon #CAD

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Two phantom weights remain heavy on the market: Concerns about AI debt and the mid-term election outcome.  We’ll show you what we are doing (or have done) about it. https://t.co/Ur5FXAU3Fb $SPY $QQQ $DIA

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Not liking the head-and-shoulders setup on the hourly chart of the S&P 500 Index. Horizontal support at 7620 is key. We told subscribers following our Super Simple Seasonal Portfolio to dump the large-cap benchmark on Tuesday, favouring income generating exposure that is holding up quite nicely today. $SPX $SPY

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Consumers look set to rely heavily on credit this holiday shopping season, providing a tailwind to consumer finance stocks. https://t.co/vJnj0aqj90 $V $MA $AXP

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What would you do with a chart like this? Upside gaps followed by downside gaps. Obviously, play the range between 375 and 385 (buy the lows, sell the highs) and look for the cues as to the longer-term move by the direction of the resolution. Been a mess recently. $GLD

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Traders leaning into defensive sectors as credit spreads balloon and as strength in high-beta segments fades. https://t.co/ed5thceXrQ $XLV $XLRE $XLU

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@ACInvestorBlog We do have to question why oil is this high with the supply bottlenecks alleviating heading into the slower time of year for demand in the fall. Oil prices tend to decline through the months ahead.

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Scott Wapner @TheJudgeCNBC @CNBC: “Good luck finding the case there is a demand problem” pertaining to the AI buildout.

Certainly nothing definitive, or sustainable, yet, Information Processing Business Equipment Production, which has tracked the strength of the AI buildout pretty well since the spring of 2025, recorded a pronounced dip in September. Could be mid-term election hesitation or just mere end of quarter fluctuation as supply chain impacts cool the pace of expansion, but a datapoint has been provided to cue in on pertaining to the strength of demand. $SMH $XLK

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One thing in the Industrial Production report that stood out was the abrupt September decline in Information Processing Business Equipment production. The category has been tracking the AI infrastructure buildout among businesses and this pullback, while just one month, certainly provides a tangible datapoint that backs the concerns the market is expressing pertaining to the AI trade. An above average trend persist three quarters of the way through the year, but the heat has definitely faded from what was observed earlier in the year. $XLK $SMH $DRAM

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As the market seeks out risk-averse plays, we can’t help but like Health Care Providers (eg. $UNH $HUM $MOH) as they breakout of their recent consolidation spans. We are long $IHF, the optimal holding period for which begins on October 27th.

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Despite all of the headwinds against the consumer, Hotel & Lodge REIT stocks (eg. $HST $APLE $SHO $PK $INN )
continue to perform very well. We have been suggesting to our subscribers for the past month to Accumulate exposure.

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With traders continuing to reach towards Health Care $XLV, Utilities $XLU, REITs $XLRE, and Consumer Staples $XLP, this market is adopting a distinct risk-off tone, hinting that market participants are preparing for a tougher period ahead.

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Canadian consumer inflationary pressures continue to run hot, fuelled by the high price of gas, various tariff pressures (eg. refrigerators), and the demand for AI infrastructure. CPI in Canada is up by 3.0% three-quarters into this year, firmly ahead of the 2.4% rise that is average for this timeframe. $STUDY $MACRO #CDNecon #CAD

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The high cost of borrowing continues to cripple the housing market, creating the weakest year-to-date change in housing starts since 2007 (the period leading into the Great Financial Crisis). US Housing starts are higher by a mere 4.4% through the first three quarters of 2026, significantly weaker than the 29.3% rise that is average for this timeframe. $STUDY $MACRO $ITB #Economy #Housing

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Daily Market Update:

Traders bought into the tech weakness on Monday, lifting the growth sector and benchmarks heavy in this influence off of the floor from last week’s selloff.   The S&P 500 Index recovered four-tenths of one percent, bouncing from the lower limit of the trading range that the benchmark has been in since August between 7620 and 7800.  On Friday, the index broke below short-term rising trend channel support that had promoted the recent path of higher-highs and higher-lows in the past month.  The benchmark is struggling around 20 and 50-day moving averages and the 100-day moving average remains a critical line in the sand.  Weakening support raises concerns for the health of stocks moving forward. The market has reached the time of year when volatility starts to peak and roll over through the last couple of months of the year, thereby promoting strength in stocks, but the breakout in the VIX on Friday above declining trendline resistance provides the inkling that the instability that is leaching into the market may just be getting started.

$SPX $SPY

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Sentiment towards risk is clearly shifting. High beta $SPHB is carving out a double top pattern at 157. Performance relative to the market is breaking below rising trendline support from the past 18 months. When the market turns risk-off like this, it is typically appropriate to pay attention (and perhaps be at least a little cautious). $QQQ $SPY

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We are at the time of year when volatility typically peaks and then rolls over through the end of the year. Today’s breakout in the $VIX above the 200-day moving average is hinting that it is just getting started on the upside. $VXX $SPX

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Prices performing normally is one thing, but when they start to diverge from seasonal norms, that is when we really pay attention.

Crude oil prices climbing at a time of year when they typically pullback from the high demand summer driving season is something to be concerned by, particularly given its influence on the economy into the end of the year. $CL_F $USO $XLE #OIL

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One thing in the Industrial Production report that stood out was the abrupt September decline in Information Processing Business Equipment production. The category has been tracking the AI infrastructure buildout among businesses and this pullback, while just one month, certainly provides a tangible datapoint that backs the concerns the market is expressing pertaining to the AI trade. An above average trend persist three quarters of the way through the year, but the heat has definitely faded from what was observed earlier in the year. $XLK $SMH $DRAM

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The strength of the manufacturing economy continues to shine through the results of industrial production. US Industrial Production has increased by 2.6% (NSA) through the first three quarters of 2026, which is the strongest performance since 2018 and more than double the 1.1% increase that is average for this timeframe. $STUDY $MACRO $XLI #Economy #Manufacturing

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Daily Market Update:

Stocks rebounded from yesterday’s selloff as the rotation in the market continues, presently away from Technology and into those segments that have been sold off since August amidst the rise in interest rates. The S&P 500 Index ended higher by a third of one percent, bouncing from short-term rising trend channel support that has promoted the recent path of higher-highs and higher-lows in the past month.  After Wednesday’s decline, the benchmark remains below the upper limit of the range that it has been in since August between 7620 and 7800.  The daily chart shows support at the 50 and 100-day moving averages, a violation of which would be required to deem a shift of trajectory.  While beyond what has historically been the weakest two-week stretch of the year at the end of September, volatility in the market tends to remain heightened into the month of October, therefore caution has been appropriate, but we have been pushing back against the negativity that is typical for this timeframe (see our September 18th report).  We continue to examine what may be the appropriate stance in equity positioning for the remainder of the month of October, but we have not received the cues to broadly de-risk in portfolios, yet (although we have been inclined to raise a little bit of cash). 

$SPX $SPY

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