[Chart courtesy of MarketWatch.com]
- Moving the market
The market found its footing today as investors tiptoed back into tech after last week’s AI-driven selloff.
The Nasdaq led the rebound, with chip stocks doing much of the heavy lifting. Intel jumped 5% following an analyst upgrade, while AMD and Micron joined the party with solid gains of their own.
The bigger story, however, is that the AI trade is entering a new phase.
The conversation seems to be shifting from “How much can companies spend?” to “What kind of return are they getting for all that spending?” That’s a healthy debate, but it has traders a bit more cautious than they were a month ago.
Under the surface, the market wasn’t quite as strong as the headline indexes suggested. Breadth remained weak, sentiment is getting gloomier, and options traders continue loading up on protection.
In other words, the Magnificent Seven were once again carrying more than their share of the furniture.
Meanwhile, rising bond yields, firmer oil prices, and ongoing geopolitical tensions kept traders from getting overly enthusiastic.
Still, considering today marks the 39th anniversary of Black Monday, a modest gain in stocks and only a little market anxiety feels like a pretty good outcome.
The question now is: was today’s bounce the start of a renewed tech rally, or just a breather before traders demand more proof that the AI spending boom still has plenty of runway?
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)
The market had a bit of a split personality today. Tech came out of the gates strong, shook off any early jitters, and carried the S&P 500 and Nasdaq comfortably into positive territory by the closing bell.
The Dow, meanwhile, spent most of the day doing its best impression of a parked car.
Metals were a mixed bag, and our TTIs gave back a little ground with a modest pullback. Nothing dramatic, just a reminder that even strong trends like to take the occasional coffee break.
This is how we closed 10/19/2026:
Domestic TTI: +3.53% above its M/A (prior close +3.86%)—Buy signal effective 5/20/25.
International TTI: +3.17% above its M/A (prior close +3.55%)—Buy signal effective 5/8/25.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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