Stock Market Analysis October 3, 2026

It's Brian Shannon from alphrends.net. Today is Saturday the 3rd of October and this week we saw kind of mixed messages from the market, but it did close on a positive note and is looking like the buyers still want to maintain control of this market. So, let's take a look at this action and uh make some sense of it. Here's the S&P 500 on the daily chart. We're up against that little trend line. we broke this near-term pattern that we've seen over the last two weeks of these lower highs and these lower lows. So, ideally, this market can continue from here. I think that the key level you want to see hold next week is about 765. We saw this week that we had a slight undercut of the low that I thought would be important, but buyers came back in, and that's the important thing. It held in this general area where we see the 20-day moving average, the 50-day moving average is that blue dashed line and the blue anchor from the LEO low. So, we've been talking about this market being a little bit indecisive, but the benefit of the doubt going to the buyers because we have a rising 50 and 200 day moving average. We have all this negative, you know, the all the negative headlines of the advanced decline line, oil, interest rates, and all that, but the market continues to hold on. And in fact, the NASDAQ broke out on Friday. it broke out of this little tight range that it had been involved in. And a lot of stocks kind of have this same type of look to it. Doesn't mean all stocks are are moving higher. I mean, we saw Western Digital and Seagate really getting hit hard on Friday. Um, those were down, you know, close to 10% or so. But overall, the buyers here, we still give the benefit of the doubt because again, we have a rising 20, 50, and 200 day moving average. Now, we're back above that rising 5day moving average. And I think as long as we're probably above the 740ish level next week that we continue to give the benefit of the doubt to the buyers and we should see be able to see this market continue to move higher. The Russell 2000 came down right to where it was supposed to which was that 200 day moving average. We were actually talking about this is the range of significance being down to the year-to- date anchor. But what happened was exactly what we thought might happen is when the bond yield went up and went through that 5.31 uh six or whatever it was, it almost immediately reversed from there and we were talking about that being the potential turnaround area. So you can see we were there for about 30 minutes and then the market uh dropped that back down through that level. So this of course was the 2007 high that we were speaking about and now you can look at this and say because we broke that 2007 high on yields it hasn't been that high since 2002. So we you made an extra additional 5-year high with that. And when that happens as we know what we often look for is not necessarily a reversal because the trend is still clearly higher here for these yields. But most likely we're going to start to see a time correction if not a slight pullback in yields. So that ought to be able to maybe help these stocks uh in particular the Russell 2000 and that's what we're starting to see. Now my preferred scenario was not for a gap higher on Friday, but that's what we have. So, we have to look at it and say, you know, it's likely that if this rally continues in the Russell 2000, the first level of interest that has the potential to offer some supply is right up ahead here at the declining 20-day moving average. So, if you ask yourself, you know, where is that? That's at about 285. Is the risk worth a reward? Well, if you know you say maybe we're going to buy some strength like this on Monday with a stop under here, that would still give you three uh dollars of upside for a dollar of uh potential risk. So, a 3 to one riskreward, which is a a nice level, but the position size would be smaller because we are below a declining 20 and 50-day moving average. I'm personally not going to trade the Russell 2000 because when I look at it, I still see a very clear pattern here. And that pattern of course is lower highs and lower lows. So I'm expecting that what we would see is another lower high and then maybe pull back, carve out a higher low and from there we could see a more sustained rally perhaps up to the 50-day moving average. So that might be what we have in store for the Russell 2000 this week is maybe we rally up another day, day and a half, two days and then start to pull back a little bit and set ourselves up for a more sustained rally in the Russell 2000. So it's definitely something to start anticipating what that scenario might be. The semiconductors uh they continue to do what they do which is to lead the market and we saw of course Micron earnings came out and Micron is actually behaving just just the way I wanted it to is that we you know we saw it pull back exactly to the key level of interest that we spoke about prior and that was the anchor off of this swing low and the 20-day moving average. We tested that intraday after earnings. The buyers took back control by getting above the daily VWAP. And then this is what I had drawn in for subscribers to Alpha Trends on Thursday evening was that I wanted to see it pull back to that VWAP. And now it's that it's there. We don't want to buy the dip. Of course, we want to wait to buy strength after that dip. So, if we were to look at this, for instance, on a five minute time frame, let's look at it on a 10-minut time frame. We don't have to get that deep into the weeds, but this is the earnings basically uh anchor. So anchor from the earnings report maybe on Monday we shake out below there just to you know get people a little bit doubting about it. And this was Friday's VWAP. So what we would like to see is maybe it tighten up and pinch between those and then get going. Right now I think you still have to have your stop below uh Thursday's low. But that's so far away. That's why I haven't purchased it yet because it's still in that this pullback mode. If we were to see something like this set up and then be a buyer on strength, maybe we could have our stop under here. That's why I'd love to see a shakeout Monday morning is to see a pullback, create a higher low. That could serve as our stoploss area rather than all the way down here. And what that does, of course, is really creates a more asymmetrical riskreward because we're not risking all the all of this additional. we're only risking, you know, basically a third of what you would have to risk if your stop was down here. That's why we're looking for that tight setup uh to occur and, you know, have a little bit of patience to let it develop. Um uh MAGS was up uh on Friday and this group is ready to break out. It behaves well. So, the buyers continue to have the benefit of the doubt there. They're above this rising 20-day moving average. They, you know, as we know, they broke this resistance last week. they tested it and now it looks like a successful test and that if you're looking to hold for you even the uh for a position trade, I think your stop goes below the last week's low. That to me seems like an important level that we need to see it hold if it's going to be able to continue to move higher. Biotech, nothing going on here that's worth doing anything. They look vulnerable, but that doesn't mean they will break down. It's just to me, you look at and say, I don't see an advantage long. I really don't see an advantage short. So when the message of the market is indecision, that sends a very clear message. Just stay away from it. Leave it alone. Let it develop. Let it set up. There's no reason to be involved. You don't have to take a position just because you want to take a position. Let's talk real quickly about well, I've got gold up here, so let's talk about that. Last week, we spoke about this as a key level of support. That level was broken. Just stay away from gold now. It's going to take some time to heal. You can see that 50-day moving average is starting to roll over. We're below the anchor from the year-to- date low. This market is in trouble. Bitcoin, however, is just the opposite. It is continuing to hold up. This week's we saw uh not quite a test of the anchor off of the low the uh recent rally, but very close to it. So, maybe some time consolidation there before it's ready to uh reather some momentum and continue to move higher. financials. They are down to their key level of interest. That is the 200 day moving average and the year-to- date anchor. This is the level we've been targeting here for the last couple of weeks as a potential support zone. So, when we look at it, do we see actual evidence of support? I would say not quite yet. We see indecision in here and we've held for a day and a half, but that doesn't mean that we've found support or that the buyers are gaining control. We still have a rapidly declining five-day moving average. So, of course, you know that that I consider that guilty to a proven innocent just like we have pretty much all of September. I'm sorry. Uh yeah, September is that we were below that the entire month outside of these two days. So, it's guilty till proven innocent, but it's getting arguably oversold into a key level of support uh of of interest that has the potential to become support because again, it's not support yet just because we tagged it. We're we're probing this level. And if it can indeed show that we have support in here as we average this data out on Monday and this data out on Tuesday that gets this fiveday moving average flattened and then it could be in for a bounce a bounce similar to what we're seeing in the Russell 2000. So perhaps initially if we see a bounce in the financials it gets up towards that declining 20-day moving average. Consider the 20 is here right now but by the end of the week it'll be down here. So maybe it runs up towards that 55 level. Is the risk worth a reward? That's the question. Well, if you buy it here at 5370 with a stop, let's say at 53 and a quarter because this might be a higher low, for instance, or you split half of your stop here and half of your stop under there, meaning your effective stop is about 53. So are you willing to risk 60 cents to make a$140? That's up to you. Uh again, consider that the declining 20 and the 50 and 20-day moving average are declining. If you do take the trade, to me, it's not a high confidence trade. Um and to adjust for that, you would adjust your position size smaller. Anyways, let's take a look at some of the MAGS components because Apple nice pull back into the 20. That was probably worth keeping an eye on for to build out this next week for some potential uh upside as we average this data out on Monday and Tuesday. That looks like it has the potential. AMD, of course, is a leader in the semis. The uh shares of Amazon still just doing a whole bunch of nothing. They're just drifting lower. Lower highs, lower lows, no support at the 20, no support at the 50. That's why their levels of interest. Maybe they're going to continue down this week to the 200. I'm not predicting that, but I just look at this and say there's no reason to be interested in a stock like Amazon right now. Google is trying to uh you know compress this recent range in here. It's just still too indecisive. Now, on the good news is that the 20-day moving average will be rising because we're averaging this dat out and the 50 will as well. So now it's in the best position it's been in for a potential uh sustained upside move because when we see a declining 50-day moving average, we simply don't trust these rally attempts. Now that it's beginning to rise again, it if it were to do this a little bit and tighten up, then Google might be good in the in the week to next uh two weeks. Intel behaves well. not uh mags, but uh meta still looking like maybe it's going to trap people in here and come down to the 20. So, that one really had a nice move and I think you want to take a look at uh the anchor off of that low for instance or if you want to be a little uh so from that low or if you want to be a little more conservative, start it here. If you started it on this little shakeout low, then that would say that adds a little extra significance towards this 700 zone. So, I wouldn't be surprised to see Meta drift down towards 700 this week. Microsoft, I'm currently long some of this. It's up near these uh highs for the year and looking like it really wants to head to the all-time high. Um we already mentioned Micron. SanDisk seeing a little bit of indecision here. This isn't what you want to see. If we break below 1,700 and stay below that for a little while, well then we'll have a declining 20-day moving average and SanDisk might end up in need of a pull back to the 50-day moving average. So, if you're short-term trading this, be aware of that that we could see it break down and you know, if it gets down towards that, well, actually 1550 level um you know, that's 10% or so from here, a little bit less than that. Netflix continues to be a disaster um here. So I I would say just leave that one alone. Nvidia behaves very well. It has broken out. Pulled back a little bit in here uh late day Friday, but overall behaves well. SpaceX is off to the races as I've mentioned recently. I've kind of had a little bit of a bearish, you know, mindset towards it. I haven't traded on the short side. So for me, this is just an avoid. Um Tesla bounced really nicely from the level we of interest that we had identified. That was the 50-day moving average and the anchor off of this low that was identified on X in a post on Tuesday, I think. And here we're seeing a really nice rally from that. So, um, anyways, that'll do it for me. Have a good weekend everyone.