There are a few brighter spots though with rates falling, so I’ll be going over those today.

With rates falling, homebuilders have been on my radar for a minute. Now that they’re above the 50d SMA, we can look to potentially get long some exposure. is a decent proxy to play this as it moves 6 ADR per day.

Insurance names also remaining strong, is probably the name to focus for beta.

Besides those, it’s hard for me to get excited about the other places that money is rotating. Consumer staples are already extended, utilities are completely defensive, and regional banks look like trash still even though they are above the 50d SMA.

With the market looking how it does, I think you can maybe try and tech off the 200d SMA if it gets there. However, with closing below its 200d SMA on Friday, I think patience is still the right answer here.

I’ll be largely hands off for a while and be biding my time until we start to see meaningful flows back into risk on.

In the meantime, it’s a great time to work on and build systems so you can be ready for the next easy period. I started The Dojo, where you can work 1:1 with me and a focused pod of committed traders to build your own systems in the same way I’ve built my own, learn my methodologies, and develop the situational awareness that has allowed me to place in the top 10 of the USIC this year. Spots are limited, link below.

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While I don’t have any energy longs here that …

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Last week, we rejected the 50d SMA on the QQQ, which led to an avalanche of selling the next day. As I tell you guys here and on Twitter often, staying hands off below the 50d is usually quite valid, and last week proved the point.

Cybersecurity continues to be my top focus, as with the security fears driving selling (I think) in tech, this continues to remain strong. Naturally, if AI is going to spark a meltdown in cyber protections, we should see a continued bid here.

Software continues to outperform as well. Putting in a strong week up 4.3% last week in the face of the QQQ being ugly red. While less strong than cybersecurity as a niche theme, there are still some nice names in this basket to watch.

Oil and gas continued to make new 52 week highs last week, as oil crept up to a new closing high. With talks of a resumed hot Iran-USA conflict, you can easily see how this continues higher. Longs should be a consideration here.

Housing continues to be on watch for me over the 50d SMA. As rates come lower, it should ease some pressure on the housing market and the gridlock due to higher mortgage rates.

Cloud software & computing continues to dominate as a niche theme as well. Lots of names active in this group, and it remains relatively strong over its 50d SMA.

Overall, leadership is still thinning but there are some strong groups we can hang our hats on. Just very important right now to not bet the farm on any one sector or name, especially semis as they continue to show massive weakness. It’s a difficult market, but pockets of opportunity are still there.

As a USIC update, I’m in 8th place at the moment, with my return through September being 113.3%.

With receiving a lot of interest in coaching and mentorship lately, I’ve started a small pod called The Dojo. It’s for traders who want to learn how to build their own systems, see the market the way I do, and get real 1:1 attention.

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As I said last week, the only game left in town was the AI trade. Everything else had retreated below its 20/50d SMAs, and we were left with a last man standing scenario.

Once tech gave it up below prior ATH, it was a sign to completely step away. Folks will notice that I’m being way less active on social media and in discord, because there’s now nothing to do on the long side. I do have some small on to catch some of the downside, but as a long momentum based trader there isn’t much out there.

Looking at what IS up, we can see that defensives continue to dominate the horizon. XLU (utilities), XLP (consumer staples), and XLV (healthcare) with strong looks, but I have to ask myself, do I really want to be momentum trading utilities? No.

Markets hate uncertainty, and with U.S. midterm elections approaching, questions on scalability with Anthropic/OpenAI, and heightened inflation fears, it’s a good market to protect capital and sit out for the time being.

Tech continues to remind me of the 2018 midterms puke, where the indices under very similar backdrop aggressively sold off. History doesn’t repeat but it does rhyme.

With almost all growth related sectors taking a beating, I’ll be hands off the momentum longs for a bit. I am going to be working small on my short game, but I’m thinking the highs for the year on the index are in. If you’re up well on the year as I am, there isn’t much else to do as a momentum long guy.

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MAGS: The Magnificent Seven continues to grind higher despite rates. As cash cows, they’re among the most insulated trades in the market, regardless of their spend on AI. At least for now, it seems to be both a flight to safety trade with many other sectors taking it on the chin from yields, but also maybe pricing in continued growth due to that same AI spend.

SPAM 3.09%↑ Cybersecurity put in an outsized week on the back of continued AI cyber security fears. Unsure how much these have left in the tank, but we can’t ignore the strength.

IGV 1.76%↑ Software also continuing to remain strong and rebound off the Claude Code lows.

XLV 1.82%↑ Healthcare as a whole continues to act well, undercutting and rallying the 50d SMA. It makes sense with AI driving new advancements in medicine and treatments continuing optimism in the sector.

ROBO 0.33%↑ Robotics continue to hold their 200d SMA and YTD VWAP. Not losing sight of this as eventually these will leg higher on commercialization.

Not much else excites me right now. This is a very different market from the one we’ve come to expect the last few years, with momentum becoming much choppier and less streamlined. Going forward I’m going to be cutting position sizing in half so give more breathing room to trades and make slow progress from there.

If anyone is interested in learning more intensively from me, send me a DM to inquire about my coaching pod.

The most important thing I thought, was how the 10 year yield pulled in hard with the Nasdaq. To me, this can only be explained by the big tech buildout being perceived as potentially slowing IF Open AI was to miss numbers and not be able to sustain debt servicing. Therefore, debt markets would be tapped less, and I think it shows the draw and pressure on bonds from the AI trade itself. Something to monitor.

Anyways, leaders have thinned once again, and we need to be careful here. There are a few names left, but with the loss of genomics/biotechs, we are left with increasingly few.

: Continues to hold up well in the server rack space. This one would surely go lower if there was a pull in datacenter spend, however given its stability I think it’s safe to say we can expect this higher if the status quo does not change given how they are the clear winner in server rack building.

Your clear market leader in the CPU space, this one pulled into the 10d yesterday and is gapping back up overnight. Must own name on pullbacks if the market is going higher.

: Software name quietly charging higher despite the turmoil and out of a stage 1 base. Strong day despite the carnage yesterday.

I’m going to venture to add this to our leaders list after an ep on strong volume, earnings growth, and tight consolidation while the rest of the market panicked.

I’m grouping these two together as they are clearly your energy leaders and have stayed strong in the face of oil falling.

This one has been an absolute juggernaut in the data storage space, almost completely insulated from the rest of the market in a vertical trend. Feels must own on pullbacks.

Following their deployment of their agentic app Muse, this MAGS name has remained ridiculously strong. Now basing above its range, I think you need to own this if it can kiss the 20d.

Same sector as Dell and made new highs despite market weakness, it’s clear that the datacenter buildout still isn’t slowing otherwise this one’s growth would be too. Must own.

I really like how this cybersecurity name continues to hold up in this weakness.

Software name and leader that continues to hold up remarkably well. as well.

Your clear biotech leader on their cancer vaccine PR. Just cannot sleep on this one.

While a lot of healthcare has been taken to the woodshed, this one has held up very well in a big weekly base near ATH. If healthcare can turn up this seems like a no brainer.

Cybersecurity leader still looking to test the 20d.

That’s what’s catching my eye guys. I think we’ll see more things join if rates can come down, however the tech trade is clearly strongly correlated with higher yields interestingly enough.

The most…

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Really nice look off the 200d, optics name. Bipartisan…

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& : On a day that tech made new ATHs, NVDA pulled in strongly from the highs, failing to close over prior ath. MU was a similar story with it reversing much of its post ER gains. With MU reporting as much revenue as NVDA did in the first quarter of this year at 1/5 the valuation, we have to ask ourselves why the market refuses to price MU higher. Similar story with NVDA. Jensen Huang indicated NVDA will be growing revenues by 70% next year. If the market truly believed this, the market would be aggressively pricing it higher. But we’re not seeing that on both fronts. Bit of a red flag for me, but again, just something to be aware of and keep in the back of our minds.

The 10y yield also put in a bullish reversal off weak job numbers, which also raises an eyebrow as a weaker economy should mean lower rates. Again, just something to monitor. Rate sensitive things were slammed as well with the 10y reversal, such as , homebuilders & mortgage providers.

The name to watch for direction is in my view. Equal weight tech. If this market is going to continue higher, it is going to be on the back of tech. With tech making up 40%+ of the market now, strength makes it impossible to be bearish. A turn here would not be promising. It’s why I stay bullish, but that will flip on a dime if tech pulls back into its base.

Financials have gotten brutalized with long duration bonds taking it on the chin. It’s a welcome sign to see XLF bidding off YTD VWAP and the 200d, however its biggest components, big banks, are trading below their 200d SMAs in most cases aside from King JP Morgan. Losing financials from the bull case is another subtle red flag.

Let’s get into some positives now. Robotics have continued to perk on my scans. This has happened a few times already, so it’s worth monitoring but with the sector being one of the strongest names on my scans, I think it’s worth watching for some setups here. Mass commercialization is coming at some point which is going to be when the trade goes risk on in my view.

Space names continue to perk up as the sector balances over its 50d SMA. After a brutal drawdown, thinking this sector can have some upside.

Photonics are in a league of their own right now, with Congress advancing a bipartisan bill to restrict Chinese photonics. This will give domestic companies a boost. For this reason, I think this sector has the most near term upside ahead of us and should be a top priority.

Telecoms are a bit of a dark horse. I can’t ignore the strength off the 200d after a long slow consolidation.

: Semis continue to lead the charge off the 30w SMA. They should be in continued focus if this market wants to move higher.

Overall we have an interesting week ahead. If anyone is interested in a more intensive pod to learn how I view things day to day, live scans, my daily prep, etc, send me a DM on Substack or Twitter @mindofzen_.

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As part of the AI trade, optics have been resting and are still to come in my view. With bipartisan legislation being introduced this weekend to ban Chinese systems, this should be a tailwind to US optics. Therefore, LYTE is a top priority next week and individual optics names.

As a spitting image of tech at large, the MAGS looks ready to rumble higher. You can play the basket here via which seems like an easy anchor trade.

Robotics are increasingly catching my attention, as ROBO pokes above the 50d SMA after a long base. If mass commercialization begins to take hold for this sector, the bull run likely starts. Given it’s through the 50d, folks should begin to watch robotics/physical AI names.

I’m still heavily focused on the AI trade, and will be until price tells us otherwise.

Over the past few months, I’ve experimented with ways I can teach people in a more focused environment. After incredible feedback, I decided to open up membership to a small coaching pod: The Dojo. Spots are limited, as I want to curate a small, intensive, close knit environment where everyone grows and questions aren’t drowned out by sheer volume of messages. With membership, you receive access to my scans, office hours daily for questions, morning market brief, my dynamic thoughts on the risk-on/off picture, trade reviews, live updates from my momentum scans intraday, and the paid Substack comped. If anyone is interested in 1:1 mentorship, system building, there is also a tier for that too. If you’re on the fence and have questions, send me a DM. Feedback I’ve received below:

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