Bonnie’s Market Update 10/02/26

September was challenging, with Technology (XLK) the only S&P 500 sector to finish higher. The other ten sectors declined, led lower by Financials (XLF) and Materials (XLB). SPY fell -0.63%. Technology remains a source of strength, but weak market breadth and rising bond yields keep me cautious.

 Figure 1: S&P SPDR Sector ETFs Performance Summary September 2026

Source: Stockcharts.com

 Figure 2: Bonnie’s ETFs Watch List Performance Summary September 2026

Source: Stockcharts.com

Semiconductors, Technology, and Biotechnology led. Gold, Silver, Europe, Small Cap Growth, and Small Cap Value underperformed, all weaker than the S&P 500.

What Charts to Watch Now

You will find more of Bonnie’s Market Charts HERE.

Figure 3: NYSE New Lows 

100126 NYSE New Lows

Source: Stockcharts.com

NYSE New Lows closed at 394 on October 1, remaining in the high-risk zone. The NYSE new-lows count includes a broader range of securities than the S&P 500, including closed-end bond funds that can come under pressure as interest rates rise. Their declines can contribute to the elevated reading.

Readings above 150 suggest elevated short-term risk, even when the market is oversold. I would like to see new lows fall below 50 for several consecutive days, signaling that selling pressure is easing. A relief rally is possible at any time. Watch market breadth closely to see whether a bounce has enough support to continue.

Learn more about the significance of New Lows in my book, Journey to Wealth, published on Amazon. For a chapter preview of Journey To Wealth, visit here.

Figure 4: CBOE Volatility Index (VIX)

100126 VIX Daily

The CBOE Volatility Index (VIX), a measure of expected market volatility, has started to rise but remains relatively low, closing at 16.43 on October 1. Two consecutive closes above 25.00 would suggest increased short-term risk and the potential for larger daily price swings.

Figure 5: Fear & Greed Index

Source: CNN.com 10/01/26

CNN’s Fear & Greed Index, a contrarian indicator of investor sentiment, closed at 28 on October 1, continuing to show fear.

Pressure Remains in the Bond Market

Figure 6: CBOE 30 YR U.S. Treasury Yield Weekly (Top),12-26-9 MACD (Middle), and 20 – YR Treasury Bond ETF (Bottom)

100126 $TYX – CBOE 30-Year US Treasury Yield Weekly

Source: Stockcharts.com

The weekly 30-Year Treasury Yield (top chart) broke above its downtrend from October 2023 in March 2026 and continues to rise.

The weekly 20-Year Treasury Bond ETF (bottom chart) moves inversely to yields and continues to trend lower.

If long-term yields continue to rise, equities could remain under pressure in the short term.

Figure 7: High Yield Corporate Bond (HYG) (Top),12-26-9 MACD (Bottom)

100126 HYG Daily

Source: Stockcharts.com

High-yield bonds have been under heavy selling pressure since late August, which is worrisome. Continued declines would be negative, while stabilization followed by a turn higher would be a positive short-term sign.

How long can the market hold up with such weak breadth?

Market Breadth is Weak

Figure 8: S&P 500 Price and NYSE, SPX, Mid and Small Cap AD Lines

100126 $SPX Index and Advance Decline lines of NYSE SML MID 100126

Source: Stockcharts.com

The S&P 500 made a new high in August 2026, as did market breadth, as measured by the Advance-Decline Line of the NYSE Common Stock Index, the S&P 500, and the S&P Mid and Small Cap Index (red arrows). Since late August, market breadth has deteriorated broadly, while the S&P 500 and Nasdaq trade near their highs, held up by only a few heavily weighted stocks. Midcap and small-cap averages have dropped sharply.

Keep a close eye on the NYSE, S&P 500, midcap, and small-cap advance-decline lines for signs of improvement to support higher stock prices and a broader rally. Continued weak breadth would suggest that the next rise may be only a relief rally and more vulnerable to reversing.

Watch for Improvement by Small Caps

Figure 9: Daily iShares Russell 2000 (IWM) Price (Top),12-26-9 MACD (Middle), and Money Flow (Bottom)

100126 IWM – iShares Russell 2000 Daily

Source: Stockcharts.com

IWM broke below its uptrend in August (purple line) and has since fallen sharply. IWM remains below its 50-day moving average (blue rectangle) and has given back earlier gains from 2026, falling to its 200-day moving average (red rectangle).

Support is at 274.00, 269.00, 265.00, and 255.00. Resistance is at 285.00, 292.00, and 295.00.

MACD (middle chart) remains on a sell signal and below zero. Momentum continues to fall and is deeply oversold.

The Money Flow Index (MFI, lower chart) continues to fall and has not yet shown signs of improving buying pressure.

A close below IWM’s 200-day moving average would add to the risk of further selling. With yields rising and MACD remaining on a sell signal, there is not yet a high-probability buying setup. Although momentum is oversold, it has not turned higher or formed a positive divergence to support a lower-risk entry.

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Technology Continues To Lead

Figure 10: QQQ Daily Invesco QQQ Trust (QQQ) Price (Top),12-26-9 MACD (Middle), and Money Flow (Bottom)

100126 QQQ Daily

Source: Stockcharts.com

The Daily chart shows Invesco QQQ (QQQ), an exchange-traded fund that tracks the Nasdaq-100 Index. QQQ broke below its daily uptrend (blue line) from March 2026, then declined into August.

QQQ broke above the downtrend that began in June and has continued higher towards a new high while other sectors of the market have been weak. QQQ remains above its 50-day Moving Average (blue rectangle) and well above its 200-day MA (red rectangle), an encouraging sign in the short term.

The MACD (middle chart) had strong momentum during the explosive March advance; it gave a quick sell followed by a buy signal in early September. MACD is now flattening, suggesting that upward momentum is no longer accelerating.

The Money Flow Index (MFI, bottom chart) trended lower from May before turning higher in September.

Support is at 727.00, 714.00, 686.00, and 666.00. Resistance is at 747.00. It would be positive in the short term if QQQ closes above 747.00 and holds the breakout.

Semiconductors (SMH) Leading is Positive

Figure 11: Daily Semiconductors (SMH) (Top), 12-26-9 MACD (Middle), and Money Flow (Bottom)

100126 SMH Daily

Source: Stockcharts.com

The top chart shows the daily price of the VanEck Semiconductor ETF (SMH), which is concentrated mainly in U.S.-listed mega-cap semiconductor companies. SMH can be highly volatile. SMH tends to be a leading indicator of the market when investors are willing to take on greater risk, and the opposite is true when the market is falling.

SMH closed above its 50-day Moving Average (blue rectangle) and its 200-day MA (red rectangle), an encouraging sign in the short term.

MACD (middle chart) remains on a buy signal, with increasing momentum since September.

Money Flow (MFI, bottom chart) rose sharply in April as SMH made a new high and then trended lower into August. MFI turned higher in September, suggesting money rotated into semiconductor stocks following the weakness in August and September. Continue watching Money Flow.  If it turns down, it could signal that semiconductors are beginning to fall out of favor, which would be negative.

Support is at 595.00, 566.00, and 540.00. Resistance is at 660.00 and 670.00. A break above 660.00 would be positive in the short term, while a close below 595.00 would weaken the technical setup.

Summing Up:

Continue monitoring long-term bond yields. They remain among the most important indicators to watch. The S&P 500 and Nasdaq are trading near their highs, while market breadth remains extremely weak, with more new lows than new highs each day.

October has historically been a favorable month for the S&P 500 and Nasdaq during midterm election years. Watch for continued strength in technology and semiconductors, and for small caps to stop falling and join the rally. If these leadership groups remain strong while small caps improve and bond yields stabilize, the market could continue moving higher. Rather than trying to predict every market move, follow your trading and investment plan while managing risk. Review your portfolio to determine whether adjustments are needed. Manage your risk, and your wealth will grow.

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Bonnie S. Gortler

Bonnie Gortler, Consultant, Coach, and Author specializing in Wealth and Well-Being, is a successful stock market professional who has been instrumental in managing multi-million-dollar client portfolios within a top-rated investment firm during her over 35-year corporate career. As the author of "Journey to Wealth" and "Journey to Well-Being", Bonnie is dedicated to teaching the importance of risk management and achieving true financial well-being by integrating both the technical and mental aspects of investing. With an M.B.A. and certification as a life coach, Bonnie combines her passion for coaching, consulting, and blogging to inspire people globally. Her powerful techniques and winning mindset help others experience personal growth and financial success. Explore wealth-building tips, personal development strategies, and more at BonnieGortler.com, and discover how you can enhance your wealth and well-being.

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