The Nasdaq gained 2.26%. The small-cap index gained 0.52%.
Ahoy there, Trader! ⚓️
It’s Phil…
The Rally That Three Stocks Turned Up For Breadth was not invited.
Monday was written up everywhere as a broad advance, which it was in the sense that a lottery win is a broad improvement in national wealth.
The Nasdaq Composite gained 2.26%. The S&P 500 gained 1.49%. The Dow gained 0.71%. The Russell 2000 gained 0.52%. Line those up and you do not have a market, you have a ranking sorted by how much technology each one contains, 174 basis points wide.
Intel gained 12.14%. AMD gained 9.95%. Meta gained 11.34%, on a broker revising a target and an application topping a chart. No earnings. No guidance. A spreadsheet changed and the index agreed. Those three supplied most of a 3.84% session in communication services and much of 2.83% in technology. Remove them and Monday is a Tuesday.
The small-cap complex declined to attend. The Russell ETF traded 79% of average volume, the Nasdaq-100 ETF 136%. Money did not spread out. It went to three addresses and stayed there.
Meanwhile a Fed official told a London audience that one more increase would probably not be enough, and the equity volatility market, hearing this, closed at 14.87.
The One That Mattered
Forget the 2.26%. The number that tells you what Monday was is 0.52%, which is what the Russell 2000 managed whilst everyone typed rally.
Three companies did the work. A broker’s revised target moved the index more than any set of accounts did. And the cohort that actually borrows money, the one that has to care what a hike costs, sat it out on four-fifths of its normal volume. That is three balance sheets not needing an improving outlook.
The Russell managed 0.52% on the day the Nasdaq managed 2.26%, so which of the two is telling us what money actually costs now? Macro Edge has the argument.
🌏 Overnight Excitement
- Europe did the work whilst Asia was asleep, and in Tokyo’s case legally required to be.
- The DAX closed 1.07% higher and the FTSE 100 0.75%.
- Japan has not traded since Friday’s close, with Monday, Tuesday and Wednesday all public holidays, and reopens on Thursday, which means every confident sentence written this week about
- Asian appetite for the rally has been describing a building with the lights off.
- Korea joins it from Thursday for Chuseok.
- The yen sits at 157.60, roughly one and a half percent from the level traders keep calling the intervention line.
Stock Market Edge
Three Addresses, One Postcode The index went up. The market did not.
Premarket snapshot:
December S&P futures sit at 7,836.00, up 0.03% at 02:30 ET against a 7,833.50 settlement. December Nasdaq futures are up 0.02%. After Monday, that is a market with nothing to add. Cash closed 7,764.70 and 27,122.09.
Sector rotation:
Communication services 3.84% higher, technology 2.83%, energy the only loser at 1.89% lower. Marathon Petroleum, six weeks into a run, touched 431.08 and closed 402.38, down 5.30%. A 52-week high and a bad day, in that order, which takes commitment.
Earnings or guidance:
AutoZone this morning, Costco Thursday. Micron is 30 September and Accenture 1 October, both checked against their own filings, because secondary calendars put each on the wrong day this week.
Cross-asset nuance:
The curve flattened from both ends. The two-year did not move at all, holding 4.76%. The ten-year fell five basis points to 4.96% and 2s30s compressed to 53, the tightest of the 14 to 21 September window. Treasury sells two-year paper into that at 13:00 ET today. The bond market priced more tightening and less growth at once, and equities answered by buying the longest-duration assets on the board.
📊 There’s a level on SPX I’m watching closely this morning. My full analysis briefing has it – plus what happens if we hold it, and what happens if we don’t. [Read it here →]
Crypto Market Edge
The Billion That Arrived Second Our own flag is losing, and we said it would win
Price snapshot:
Bitcoin opened the UTC day at 81,178.01 and closed 86,620.00, up 6.70%. It is already 85,268.00, which is 1,352 dollars of the story gone before anybody read it. Ether closed 2,776.19, up 4.90%.
Flows and positioning:
999.0 million dollars into US spot bitcoin funds, a third straight inflow session. And here is where we mark ourselves: our open flag says cumulative flow to 2 October will be negative, on the argument that the fund complex follows price rather than sets it. Two sessions in it stands at plus 1,432.0 million dollars, needing roughly three heavy outflow sessions of the nine that remain merely to reach nothing. That flag is losing, loudly, and it deserves to be.
Leadership and rotation:
Issuer concentration reversed. BlackRock 381.4 million dollars, ARK 289.1 million, Fidelity 238.8 million. Fidelity supplied 71.8% of Friday’s total alone and 23.9% of Monday’s.
Catalysts and roadmap:
Strategy filed on 950 more coins, 75.7 million dollars at 79,670, the first disclosed purchase since 31 August. The chairman posted an accumulation chart on Sunday about adding more dots. On Monday, dots were added
TL;DR – The Bottom Line
- The Nasdaq gained 2.26% and the Russell 2000 gained 0.52%, a 174 basis point spread that sorts by technology weighting rather than by anything resembling genuine breadth.
- Intel gained 12.14%, AMD 9.95% and Meta 11.34% on a revised broker target and an app ranking, producing most of an advance no earnings report was involved in.
- Chicago’s Fed president said one further increase would likely not be enough, the curve flattened from both ends, and equity volatility closed at 14.87 regardless.
- Spot bitcoin funds took 999.0 million dollars after the price had already moved, putting our own open flag 1,432.0 million dollars underwater with nine sessions left.
- December futures sit 0.03% higher before three Fed speakers, a two-year auction at 13:00 ET and flash purchasing surveys tomorrow, none of which volatility appears to expect.
📌 Fun Fact
The Public Holiday Set By Telescope Japan learns its own calendar from an observatory
Tokyo is shut today, bridged between two holidays, and the date of one of them cannot be fixed in advance by anybody. Autumnal Equinox Day is not set by statute. The National Astronomical Observatory of Japan calculates it and it is announced in the official gazette in February of the preceding year, which makes it the only public holiday in the developed world scheduled by telescope.
Meme of the Day:
Happy trading,
Phil
Less Brain, More Gain
…and may your trades be smoother than a cashmere codpiece
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