[Chart courtesy of MarketWatch.com]
- Moving the market
Stocks started October on the back foot as surging Treasury yields pressured the broader market, despite blockbuster earnings from Micron.
The 10-year yield briefly climbed above 5.34%, touching levels not seen in roughly 24 years, while the 30-year pushed above 5.66%.
That’s becoming the market’s elephant in the room. Stocks remain near record highs, but with bonds offering increasingly attractive returns, the old “there is no alternative” argument for equities is getting a serious stress test.
Micron delivered spectacular numbers, with quarterly revenue reportedly quadrupling, yet the stock slipped about 3%. After a 200%+ run this year, apparently even blockbuster earnings need a blockbuster encore.
Fortunately, yields retreated from their highs as the session progressed, allowing the major indexes to crawl out of their early hole and finish around unchanged. The Mag 7 lagged the broader S&P 493, while the dollar strengthened amid weakness in Europe.
Elsewhere, WTI crude rose above $91 as traders remained focused on the Iran conflict, while gold managed to stay green despite dollar strength. Bitcoin added some excitement of its own, briefly jumping toward $85,000.
October has a reputation for volatility, but it has also earned the nickname “Bear Killer” for several memorable market reversals.
With yields still calling much of the tune, was today’s comeback simply a reprieve, or are the bulls already warming up for another October surprise?
2. Current domestic “Buy” Cycle (effective 5/20/2025); International “Buy” Cycle (effective 5/8/25)
Our domestic bullish cycle that began on November 21, 2023, concluded on April 3, 2025, following a market downturn triggered by President Trump’s tariff policy announcement.
This development caused significant declines across major indexes and broader market indices. However, markets subsequently rebounded, culminating in a new domestic “Buy” signal taking effect May 20, 2025.
Concurrently, our International Trend Tracking Index (TTI) experienced parallel volatility. On April 4, 2025, it breached critical thresholds, prompting a “Sell” recommendation. This position reversed as global markets recovered, with the International TTI regaining sufficient momentum to issue a new “Buy” signal effective May 8, 2025.
3. Trend Tracking Indexes (TTIs)
October certainly didn’t bother knocking politely. After an ugly start, the major indexes slowly clawed their way back toward their respective unchanged lines.
Gold and silver followed a similar script, recovering enough to finish moderately in the green.
Our TTIs joined the comeback as well, although only the domestic one managed to eke out a positive close.
The turning point came around mid-session as bond yields softened, giving stocks and metals some much-needed breathing room.
Not exactly a victory parade, but considering how the day started, nobody should complain about getting back to even.
This is how we closed 10/01/2026:
Domestic TTI: +2.08% above its M/A (prior close +1.60%)—Buy signal effective 5/20/25.
International TTI: +2.27% above its M/A (prior close +2.58%)—Buy signal effective 5/8/25.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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