September 11, 2026

The major averages were on a four-day losing streak going into Friday before a tick lower in oil prices and stable yields gave a hand up. Weekend hostilities between the US and Iran sent oil prices higher to start the week with several oil-related stocks posting new record highs. Yields ticked higher on inflation fears and investors stayed on the sidelines ahead of key inflation data later in the week. Semiconductors were a bright spot however with Intel (INTC) surging +9.05% on news about its chip manufacturing and an upgrade with a raised price target. Drops in Novartis (NVS) and Amgen (AMGN) after disappointing trial results for a cardiovascular treatment weighed on the Healthcare (XLV) sector. Yields climbed to fresh multiyear highs on Wednesday after the Treasury Department announced a less than hoped for buyback operation of longer-dated government debt. The different indexes dropped with 10 of 11 sectors finishing in the red. A mixed PPI report on Thursday saw wholesale prices jump +5.4% Y/Y with core-PPI increasing +0.2% vs. +0.3% estimated and +4.6% Y/Y, in line. Inflation fears sent the 10-year Treasury rate to another multiyear high of 4.962% and the two-year T-Bill landed at 4.570%. Crude oil prices crossed above $100 a barrel. Equities tumbled with nine of 11 sectors red. Higher rates hurt housing stocks as the 30-year mortgage topped 7% and the US Home Construction ETF (ITB) lost another -2.38% and was down -12.8% from its August closing high. A mixed August CPI was mostly in line up +0.4% as expected but +5.4% Y/Y vs. +5.3% estimated and appeared to lock in expectations for a 0.25-point rate hike at next week's FOMC meeting. The major averages bounced on hopes some of the uncertainty of Fed policy was removed. The CME Group FedWatch projected an 86.5% probability the Fed would hike rates to 3.75-4.00. At Friday's close the yield on the 10-year Treasury was at 4.978%, its highest since October 2023. The major averages traded sharply higher on Friday but not enough to erase the losses from earlier in the week. The S&P 500 and NASDAQ were down for a second week out of the last three, while the DJIA slipped for a fourth week out of the last five. Next, investors will digest housing and manufacturing numbers during the week and settle quarter-ending triple-witching options expiration on Friday. However, the main focus will be on the Federal Reserve's announcement on interest rates coming out of Tuesday and Wednesday meetings.

For the period, the DJIA lost 840.96 points (-1.6%) and settled at 52573.29. The S&P 500 fell 61.62 points (-0.8%) and closed at 7656.98. The NASDAQ slipped 173.95 points (-0.7%), finishing at 26333.04. The small cap Russell 2000 tumbled 71.71 points (-2.4%) and settled at 2903.94.

Market Outlook: There was some deterioration in the technical condition of the market this week, but for the most part the major averages are range bound. The DJIA dropped below its 50-day MA for the first time since April, but the S&P 500 and NASDAQ were able to test and bounce off that key MA support level on renewed buying in big cap technology shares. The NASDAQ 100 bounced off its 100-day MA but managed to crawl back above its 50 and 100-day MA on Friday's bounce. Despite talk of a rotation into more cyclical industries over the summer, the Equal-Weight S&P 500 (RSP) underperformed and joined the DJIA in trading below its 50-day MA, also for the first time since April, but is oversold. The technical indicators for the Dow Jones slipped into negative ground this week and the blue-chip index closed the period oversold with stochastics below 20. The S&P 500, NASDAQ and NASDAQ 100 have seen little movement in their technical indicators over the last several weeks and these indicators are drifting in a neutral position confirming their sideways trading. The VIX remains in the 14-16 range and shows that traders are not overly concerned of a deeper correction at this stage. In fact, the orderly progression of recent weakness suggests any correction in oil prices and a de-escalation in the US/Iran conflict could spark a nice move higher. While the weekly charts for the DJIA and NASDAQ show slowing momentum, the S&P 500 shows upward momentum remains mostly intact. Although the Philadelphia Semiconductor Index (SOX) was able to post a small gain this week on improving technicals, it remains trading below its 50 and 100-day MA with its 50-day MA crossing below the 100-day MA, a negative connotation. The small cap Russell 2000 and DJ Transportation Index underperformed and are below their respective 50 and 100-day MA.

Following a week where only four of 11 market groups traded higher, this week only three sectors closed in the plus column. Energy (XLE), Communication Services (XLC) and Technology (XLK) were green, the latter two on buying in Mag 7 stocks. Healthcare (XLV) and Materials (XLB) were the weakest sectors with every other market group down more than -1%.

A chart of these indicators can be found by going to the Market Edge Home page and clicking on Market Recap, which is on the right-hand side of the page just below the Second Opinion Status numbers.

Cyclical Trend Index (CTI): The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times.

Currently, the CTI is Positive at +7, down two notches from the previous week. Cycles B, C, D are Bullish, while Cycles A and E are Bearish. The CTI is projected to remain in a positive configuration into October.

Momentum Index (MI): The markets momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish.

The Momentum Index is Neutral at -2, down two notches from the previous week. Breadth was negative at the NYSE as the Advance/Decline line lost 2859 units while the number of new 52-week lows exceeded the number of new highs on all four sessions. Breadth was also negative at the NASDAQ as the A/D line fell 4985 units while the number of new lows outdid the new highs on each day. Finally, the percentage of stocks above their 50-day moving average dropped to 35.4% vs. 51.0% the previous week, while those above their 200-day moving average fell to 51.8% vs. 58.0% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth was negative for a fourth consecutive week with the NYSE and NASDAQ Advance/Decline lines both lower. The NYSE A/D line fell back to a level from early June, while the NASDAQ A/D line pulled back to its March numbers. New lows expanded and outnumbered the new highs by a wide margin with the NASDAQ recording its highest number of new lows, 425 on Thursday, since the end of March. More worrisome, is that the NYSE put up 353 new lows on Thursday, the most since April 9, 2025! With the S&P 500 less than 2% off its all-time record close it confirms that overweight big cap stocks are once again doing the heavy lifting.

Sentiment Index (SI): Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Negative at -3, up two notches from the previous week.

There was little movement in the numbers of retail and professional bulls. The Association of Individual Investors (AAII) saw retail bulls slip 1.7 percentage points to 38.0% but remained above the historical average of 37.5% for a second straight week. The Percentage of Bullish Investment Advisors fell to 50% from 54.9% the prior week.  However, that's the fewest bulls in this group since the last week of July. Finally, the National Association of Active Investment Managers (NAAIM) Exposure Index saw the professionals' stand pat at 89.6% from 85.6% the prior period. Bears remain hard to find among investment advisors with the Percentage of Bearish Investment Advisors at only 17.3% marking a 12th consecutive week below 20%.

Market Posture: Based on the status of the Market Edge, market timing models, the 'Market Posture' is Bullish as of the week ending 08/07/2026 (DJIA - 54,036.93). For a closer look at the technical indicators and studies that make up the market timing models, check out the tables located below.

Industry Segment Rankings: What's Hot (64) - What's Not (108): Of the 172 Industry Segments that we track, 64 are rated as either Strong or Improving while 108 are regarded as Weak or Deteriorating. The Previous Week's totals were 65-107. The following are the strongest and weakest Industry Segments for the period ending 9/10/26. Strongest: Oil & Gas Refining Marketing, Movie Theaters, Marine and Gold. Weakest: Other Infrastructure, Semiconductors, Commercial Construction and Parcel Delivery. To review all the Industry Group rankings in the Market Edge universe, click on the Industry Group tab.

ETF Center: The top performing ETF categories for the week ending 9/10/26 were: Commodity-Energy (+9.67%), Commodity-Blend (+4.00%), Shorts (+2.89%), Specialty Technology (+2.40%) and Sector-Energy (+1.61%). The weakest categories were: Specialty Health (-4.52%), Specialty Retail (-3.09%), Blend-Small Cap (-3.08%), Sector-Consumer Discretionary (-3.04%) and Consumer Staples (-2.89%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT