After the close

Thursday October 22

Sunday's risk that capex financing tightens showed in its areas on Thursday: Networking & Optics −12.1%, Semiconductors & Equipment −10.6%, Memory & Storage −8.5% and Data Centers & Neoclouds −8.5% against the equal-weight S&P 500, as the S&P 500 fell −1.2% and the equal-weight index rose +0.7%.Two triggers crossed: the market's Risk-On, its structural state recovering to −18 from −27, and Power's Risk-Off at −52, though that rests on one move, BE, TLN and PWR each crossing below its 200-day average.Semiconductors & Equipment's Risk-Off sits 1 point away at −59.All eight Risk-Off calls are ahead since Sunday, Networking & Optics by 10.54 points.

Sunday's issue of October 18

Since Sunday

S&P 500−1.18% on Thursday+0.09%
Triggers crossed1 Risk-On, 1 Risk-Off2 / 18Calls aheadTactical calls8 / 8Nearest open triggerSemiconductors & Equipment, Risk-Off1 pt away

Sunday's watch list

Throughout US Treasury par yield curve The 10-year fell 15 bp to 5.09% in the week to 16 Oct; whether it holds decides if the rate-sensitive lifts in utilities and real estate extend.
Throughout Q3 earnings season continues Expected blended growth near 29.5% is the story behind a tape with structural breadth at −49.
Thu US weekly initial jobless claims A labour read ahead of the FOMC, with a market still weighing a hike after 3.7% CPI. AAII Investor Sentiment Survey, week to Wed 21 Oct AAII Investor Sentiment Survey, week to Wed, Oct 21 (published Thu, Oct 22): 36.9% bullish, 17.3% neutral, 45.8% bearish — a bull–bear spread of −8.9 points, against AAII's long-run average of +6.0 (37.5% bullish, 31.5% bearish); −2.9 the week before.
Fri CFTC Commitments of Traders Funds are net short 21.1% against a 17.2% mean; a cover would cut the +39 positioning support across every area.
Wed 28 Oct FOMC decision at the end of the 27-28 October meeting Warsh gave no signal; a hike would hit liquidity, already −32 tactical and −26 structural across the board.

Biggest moves

Sectors Consumer Staples led, +2.58% against the equal-weight S&P 500 · Technology lagged, −4.02%

S&P 500

503 names
NameThuSince Sun
Allegion ALLE · Industrials+11.02%+12.76%
Roper Technologies ROP · Technology+9.73%+13.98%
Lennar LEN · Consumer Discretionary+8.69%+9.56%
Blackstone BX · Financials+8.38%+11.39%
General Mills GIS · Consumer Staples+8.01%+6.19%
Moderna MRNA · Health Care−17.57%−7.05%
Coherent COHR · Technology−12.51%−10.77%
Lam Research LRCX · Technology−11.76%−12.80%
Lumentum LITE · Technology−11.54%−8.69%
Flex FLEX · Technology−11.08%−15.22%

The chain

72 names
NameThuSince Sun
Salesforce CRM · AI Software+3.52%+3.98%
SERVICENOW NOW · AI Software+2.53%+10.59%
UiPath PATH · AI Software+1.68%+8.48%
MACOM Technology Solutions Holdings MTSI · Networking & Optics−15.87%−12.40%
Silicon Motion Technology SIMO · Memory & Storage−15.45%−11.05%
FormFactor FORM · Semiconductors & Equipment−15.29%−9.50%
Entegris ENTG · Semiconductors & Equipment−13.12%−7.52%
Coherent COHR · Networking & Optics−12.51%−10.77%

Triggers

Sunday's conditions on Thursday's closes
  • Risk-On Market S&P 500 structural ≥ −20 · Thu −18 Crossed
  • Risk-Off AI Power structural ≤ −50 · Thu −52 Rests on BE slipping below its 200-day (0.5% below at the close) and TLN slipping below its 200-day (5.4% below at the close) and PWR slipping below its 200-day (11.1% below at the close) Crossed
  • Risk-Off AI Semiconductors & Equipment structural ≤ −60 · Thu −59 1 pt away closer
  • Risk-Off AI AI & Hyperscalers structural ≤ −21 · Thu −19 2 pts away closer
  • Risk-Off AI Networking & Optics weekly change in tactical ≤ −10 · since Sunday −8 2 pts away closer
  • Risk-On AI Data Centers & Neoclouds structural ≥ −59 · Thu −61 2 pts away unchanged

The calls since Sunday

Tactical, against the equal-weight S&P 500

Ahead 8

  • Risk-OffData Centers & Neoclouds−5.62%
  • Risk-OffNetworking & Optics−10.54%
  • Risk-OffMemory & Storage−2.91%
  • Risk-OffSemiconductors & Equipment−9.10%
  • Risk-OffIndustrials−2.54%
  • Risk-OffReal Estate−1.08%
  • Risk-OffPower−8.93%
  • Risk-OffCompute (accelerators)−3.53%

No new calls are made during the week.

Next issue

Sunday, October 25

Market opens

Friday, October 23 · 9:30 AM–4:00 PM New York time

Every area

Relative: each area against the equal-weight S&P 500; the S&P 500 against T-bills. Sunday's states as published.
ThursdaySince SundaySunday's states
AreaReturnRelativeReturnRelativeAbove 50-dayTacticalStructural
S&P 500 vs T-bills−1.18%−1.18%+0.09%+0.06%61% (+15 pp)−11 Balanced−27 Risk-Off
Consumer Staples +3.31%+2.58%+2.70%+0.78%85% (+15 pp)+18 Balanced+19 Balanced
Utilities +2.07%+1.34%+1.56%−0.37%81% (+10 pp)−7 Balanced−54 Risk-Off
Health Care +1.32%+0.59%+2.60%+0.67%88% (+17 pp)+20 Balanced+37 Risk-On
Real Estate +1.09%+0.36%+0.85%−1.08%45% (+21 pp)−28 Risk-Off−36 Risk-Off
Financials +1.09%+0.36%+2.04%+0.11%54% (+14 pp)−17 Balanced−4 Balanced
Materials +0.72%−0.01%+1.51%−0.42%67% (+21 pp)−6 Balanced−17 Balanced
Consumer Discretionary −0.45%−1.18%+2.27%+0.34%62% (+21 pp)−6 Balanced−46 Risk-Off
Energy −0.87%−1.59%−0.98%−2.91%71% (−5 pp)+18 Balanced+9 Balanced
Industrials −0.94%−1.67%−0.61%−2.54%51% (+22 pp)−30 Risk-Off−65 Strong Risk-Off
Communication Services −1.42%−2.15%−2.63%−4.56%33% (+14 pp)−20 Balanced−40 Risk-Off
Technology −3.29%−4.02%−0.62%−2.54%45% (+9 pp)−18 Balanced−7 Balanced
AI Software AI−1.50%−2.23%+4.41%+2.49%5 of 10−6 Balanced+12 Balanced
AI & Hyperscalers AI−3.94%−4.67%−3.36%−5.29%1 of 5−2 Balanced−16 Balanced
Power AI−6.29%−7.01%−7.00%−8.93%1 of 11−28 Risk-Off−43 Risk-Off
Compute (accelerators) AI−6.33%−7.06%−1.60%−3.53%0 of 6−25 Risk-Off−10 Balanced
Data Centers & Neoclouds AI−7.73%−8.46%−3.70%−5.62%0 of 10−39 Risk-Off−61 Strong Risk-Off
Memory & Storage AI−7.75%−8.48%−0.98%−2.91%1 of 7−36 Risk-Off−55 Risk-Off
Semiconductors & Equipment AI−9.82%−10.55%−7.18%−9.10%0 of 13−34 Risk-Off−58 Risk-Off
Networking & Optics AI−11.41%−12.14%−8.61%−10.54%0 of 10−37 Risk-Off−70 Strong Risk-Off

Liquidity and rates

  • Credit appetite −0.88% on Thursday · −0.54% since Sunday high yield minus investment grade
  • Dollar −0.07% on Thursday · −0.07% since Sunday
  • Long bonds +1.87% on Thursday · +2.11% since Sunday
  • Treasury curve 10-year 4.96% (−17 bp) · 2-year 4.65% (−16 bp) · 3-month 4.22% (−3 bp) · 2s10s +31 bp par yields at the 2026-10-22 close; since Sunday −13 bp / −9 bp / −4 bp
  • Positioning CFTC Traders in Financial Futures, S&P 500 consolidated, report dated Tue, Oct 13 (published Fri, Oct 16): leveraged funds net short 21.1% of open interest, from net short 21.3% the week before. It stands in every state.
  • The crowd AAII Investor Sentiment Survey, week to Wed, Oct 21 (published Thu, Oct 22): 36.9% bullish, 17.3% neutral, 45.8% bearish — a bull–bear spread of −8.9 points, against AAII's long-run average of +6.0 (37.5% bullish, 31.5% bearish); −2.9 the week before. AAII · displayed, not scored

Sunday's risks against the tape

  • The Fed hikes on 28 October CPI at 3.7% [1] and a non-committal chair [2] leave a hike live, which would land on a liquidity component already negative everywhere. S&P 500 +0.06% since Sunday · Financials +0.11% since Sunday · Real Estate −1.08% since Sunday · Utilities −0.37% since Sunday
  • Capex financing tightens Hyperscaler liabilities above $4 trillion [9] and a 5.09% 10-year make the build-out sensitive to credit; a pullback in issuance would hit the hardware layers already at 30-week lows. AI & Hyperscalers −5.29% since Sunday · Data Centers & Neoclouds −5.62% since Sunday · Semiconductors & Equipment −9.10% since Sunday · Memory & Storage −2.91% since Sunday · Networking & Optics −10.54% since Sunday
  • Long yields reverse higher The rate-sensitive gains in the week to 16 Oct came with a 15 bp fall in the 10-year [14]; a reversal would undo them first. Utilities −0.37% since Sunday · Real Estate −1.08% since Sunday · Financials +0.11% since Sunday
  • A short squeeze lifts hardware Funds are net short 21.1% against a 17.2% mean, so a cover would hit the most oversold layers hardest and against the Risk-Off read. S&P 500 +0.06% since Sunday · Semiconductors & Equipment −9.10% since Sunday · Networking & Optics −10.54% since Sunday · Memory & Storage −2.91% since Sunday

Provisional states on Thursday's closes

Provisional: next Sunday's states on Thursday's closes beside Sunday's, both before any adjustment. Not published states and not a call; the triggers are read on these.
TacticalStructural
AreaSunThuChangeSunThuChange
S&P 500−11−3+8−27−18+9
Technology−18−21−3−7−9−2
Financials−17+2+19−4+9+13
Health Care+20+34+14+37+50+13
Consumer Discretionary−6+18+24−46−31+15
Consumer Staples+18+38+20+19+29+10
Energy+18+19+1+9+7−2
Industrials−30−24+6−65−66−1
Materials−6+8+14−17−12+5
Utilities−7+10+17−54−40+14
Real Estate−28−10+18−36−22+14
Communication Services−20−22−2−40−43−3
AI & Hyperscalers−2−9−7−16−19−3
Compute (accelerators)−25−30−5−10−14−4
Semiconductors & Equipment−34−45−11−58−59−1
Memory & Storage−36−40−4−55−53+2
Networking & Optics−37−45−8−70−69+1
Data Centers & Neoclouds−39−42−3−61−610
Power−28−37−9−43−52−9
AI Software−6+2+8+12+22+10

Session 4 since the issue of Sun, Oct 18; closes through Fri, Oct 16 are Sunday's · computed Sun, Nov 1, 5:25 AM · the sources are listed below

  • Prices Massive: split-adjusted daily closes through Thursday, October 22, 503 S&P 500 constituents and every area's members
  • Treasury yields U.S. Treasury: daily par yield curve, Thu, Oct 22
  • Positioning CFTC: Traders in Financial Futures, S&P 500 consolidated, report dated Tue, Oct 13
  • The crowd AAII: Investor Sentiment Survey of Wed, Oct 21; displayed, not scored
  • Market hours NYSE: holidays and early closes, computed from the exchange's rules
  • The issue Sunday's issue of October 18: the states, the triggers and the watch list this page grades
  • Closes re-read AES's unchanged close, asked again of the provider and confirmed; BIL's unchanged close, asked again of the provider and confirmed
  • The comment Drafted by a model from this document; every figure checked against it before it is shown.