002 Weekly Market Report

ChartLists/Spreadsheets

The following ChartLists/Spreadsheets will be updated by tonight and will be updated on our website later this evening:

• Strong Earnings (SECL)
• Strong Future Earnings (SFECL)
• Raised Guidance (RGCL)
• Bullish Trifecta (BTCL)
• Leading Stocks (LSCL)
• Matt's Hot Stocks (HTCL)

The above ChartLists and the Key Manipulation spreadsheet have been updated through Friday, September 4, 2026. You can view and/or download these ChartLists from our website, and also read about them to gain a better understanding of how they can help in your trading success.

Upcoming Earnings ChartLists will not be provided again until Q3 earnings season kicks off in mid-October.

Weekly Market Recap

Major Indices

Sectors

Top 10 Industries Last Week

Bottom 10 Industries Last Week

Top 10 Stocks - S&P 500/NASDAQ 100

Bottom 10 Stocks - S&P 500/NASDAQ 100

Big Picture

Any time an RSI moves above 70, it's a signal of overbought conditions. However, during secular bull market advances, it's quite common to see the monthly RSI move above 70 - and even stay there for awhile. The late 1990s saw the monthly RSI push above 70 and stay there for a few years. Using the monthly RSI as a primary indicator and selling and moving to cash when it hits 70 is, more often than not, a mistake. In fact, if you look at the chart above, even brief stays above 70 tend to result in more sideways, consolidation behavior, as opposed to outright selling. Monthly readings at or near 70 during secular bear markets, though, mark significant tops.

Sustainability Ratios

Here's the latest look at our key intraday ratios as we follow where the money is traveling on an INTRADAY basis (ignoring gaps):

QQQ:SPY

Keep in mind that the intraday analysis provided is a "work in progress". I continue to analyze this data to see if it helps provide us clues about calling market direction. It makes common sense to me that it should help in some sense, but it'll require a much longer-term study to determine its worth.

The intraday rotation last week was solidly in favor of QQQ. In fact, I'd go as far as to say it was one of the best weeks of intraday rotation that we've seen in months. The bottom panel shows that if we include opening gaps, the rotation was relatively flat. Continuation of this rotational behavior should be viewed quite bullishly.

IWM:QQQ

Last week, we saw a continuation of IWM weakness from the prior week. The good news, however, was that the IWM was the primary focus of buying on Friday. After gapping down at the open, the IWM rose throughout the trading day, finishing near its high of the day. It's way too early to tell whether this is a significant reversal, or just a relative bounce in a downtrend.

XLY:XLP

As the S&P 500 rebounded last week to approach all-time highs again, we saw a similar problem. The XLY vs XLP ratio barely budged, leaving us to question if a breakout to an all-time high can be sustained. I can only tell you from history that S&P 500 breakouts with a lagging XLY:XLP ratio usually don't end well. Based on this, watch to see if this ratio picks up to accompany an S&P 500 breakout, if one occurs.

XLP 30-Day Cumulative Signal

Questions from members arose after I posted this chart last week, and understandably so. Many of those questions dealt with the behavior of this signal moving up and down during various bullish and bearish periods. I want to emphasize that high readings in this signal (ie, above 106) are not expected to be bearish every time. In fact, during secular bull market advances, a "rising tide lifts all boats", meaning that consumer staples can be expected to rise at times during secular bull markets. If everything is going up, the fact that consumer staples are rising doesn't necessarily provide a bearish warning. Again, consider this signal as SECONDARY, not PRIMARY. Every significant selloff since 1999 occurred with this signal printing 106 or higher just prior to the selloff. The only exception was in 2020 during the pandemic. This makes sense to me, because my belief is that Wall Street sees major weakness ahead, which is why the staples accumulation occurs in the first place. No one could have seen the pandemic and its effects a month or two in advance.

Here's where this signal currently resides:

Please note that the signal does move above 100 quite often, so readings above 100 should not be considered overly alarming. I'm planning to calculate a similar signal for the consumer discretionary area (XLY). It may turn out that a combination of the XLY and XLP cumulative signals proves to be extraordinarily accurate in forecasting trouble ahead. That's my goal, to establish a reliable SECONDARY indicator to warn us ahead of time. I want to stress that NO SIGNAL developed will replace the obvious PRIMARY signal, which is the combination of price action and volume.

Every secondary indicator that I use is part of my risk management strategy. My goal is to simply make these secondary indicators stronger and stronger and more reliable, not to provide us guarantees.

Sentiment

5-day SMA ($CPCE)

Sentiment indicators are contrarian indicators. When they show extreme bullishness, we need to be a bit cautious and when they show extreme pessimism, it could be time to become much more aggressive. Major market bottoms are carved out when pessimism is at its absolute highest level.

I'm watching this indicator week to week, but it currently remains in neutral territory.

253-day SMA ($CPCE)

This longer-term 253-day SMA of the CPCE is our "ocean-liner" signal, unlike our short-term speedboat indicator. Any significant change in direction in this 253-day CPCE, in the past, has had profound effects on the S&P 500.

The yellow circle illustrates the total lack of conviction that traders have right now when considering future market direction. The back and forth represents indecision. Nothing has changed here over the past several weeks.

Long-Term Trade Setups

Since beginning this Weekly Market Report in September 2023, I've discussed the long-term trade candidates below that I really like. Generally, these stocks have excellent long-term track records, and many pay nice dividends that mostly grow every year. Only in specific cases (exceptions) would I consider a long-term entry into a stock that has a poor or limited long-term track record and/or pays no dividends. I try to review the long-term picture once a month, and below is how I viewed each MONTHLY chart as of Friday, September 4th: 

• JPM - monthly neg divergence remains a potential issue for now
• BA - long-term sideways action in play since start of pandemic
• FFIV - overbought, but long-term uptrend in play
• MA - cup pattern challenging 2025 high near 600, handle could be near 550
• GS - monthly RSI at 79, combined with neg divergence suggests caution
• FDX - beautiful breakout above 240 earlier this year, momentum strong
• AAPL - great long-term chart and not overbought
• CHRW - continues to hold its rising 20-month EMA
• JBHT - breakout in 2026 following years of consolidation is bullish
• STX - consolidation since June high fully warranted and acceptable
• HSY - recent consolidation in 170-190 range, still solid longer-term
• DIS - no follow through yet after August buying
• MSCI - very lengthy consolidation, breakout above 640 would be bullish
• SBUX - similar to MSCI, albeit with more breakout attempts
• KRE - August wasn't kind, but this L/T uptrend remains perfectly in play
• ED - looks solid, remaining in fairly narrow 102-115 range
• AJG - has regained strength, climbing back above its 20-month EMA
• NSC - 2025 cup with handle breakout measures to 375, so more upside ahead
• RHI - nice 2026 rally, but biggest resistance likely to be felt in 50-55 range
• ADM - looks like right side of cup complete, can't rule out 20-month EMA test
• BG - breakout and retest of rising 20-month EMA is technically sound
• CVS - broke out above 95 area and has retested, monthly PPO strong
• HRL - another trip below 20 would clearly establish a positive divergence
• DE - gaining strength and momentum, looks to head higher
• LULU - given earnings debacle, I see this one hitting key support near 80
• TTD - volume massive as selling continues, simply looks like a failure
• META - monthly PPO nearing centerline, likely L/T buy from here
• ADBE - I'm calling recent low a bottom here, first test will be 20-month EMA
• KMB - 90-115 is the range until we see which way it breaks
• ORCL - 115 is major long-term price support; upcoming earnings this week
• ABBV - strengthening, rising 20-month EMA should continue to offer support
• MCD - hasn't found bottom yet, but monthly RSI at 40 lowest since 2003
• MKC - bouncing, but 20-month EMA at 60 will be key resistance
• TSCO - oversold bounce underway, 35 is current price and S/T resistance

Keep in mind that our Weekly Market Reports favor those who are more interested in the long-term market picture. Therefore, the list of stocks above are stocks that we believe are safer (but nothing is ever 100% safe) to own with the long-term in mind. Nearly everything else we do at EarningsBeats.com favors short-term momentum trading, so I wanted to explain what we're doing with this list and why it's different.

Also, please keep in mind that I'm not a Registered Investment Advisor (and neither is EarningsBeats.com nor any of its employees) and am only providing (mostly) what I believe to be solid dividend-paying stocks for the long term. Companies periodically go through adjustments, new competition, restructuring, management changes, etc. that can have detrimental long-term impacts. Neither the stock price nor the dividend is ever guaranteed. I simply point out interesting stock candidates for longer-term investors. Do your own due diligence and please consult with your financial advisor before making any purchases or sales of securities.

Looking Ahead

Upcoming Earnings

The following list of companies is NOT a list of all companies scheduled to report quarterly earnings, however, just key reports, so please be sure to check for earnings dates of any companies that you own. Any company in BOLD represents a stock in one of our portfolios and the amount in parenthesis represents the market capitalization of each company listed: 

• Monday: None
• Tuesday: CASY ($28 billion)
• Wednesday: None
• Thursday: ORCL ($444 billion), ADBE ($114 billion)
• Friday: KR ($36 billion)

Key Economic Reports

• Monday: None - Market Closed (Labor Day Holiday)
• Tuesday: None
• Wednesday: None
• Thursday: Initial jobless claims, August PPI, August existing home sales
• Friday: August CPI, September consumer sentiment

Historical Data

I'm a true stock market historian. I am absolutely PASSIONATE about studying stock market history to provide us more clues about likely stock market direction and potential sectors/industries/stocks to trade. While I don't use history as a primary indicator, I'm always very aware of it as a secondary indicator. I love it when history lines up with my technical signals, providing me with much more confidence to make particular trades.

Below you'll find the next two weeks of historical data and tendencies across the three key indices that I follow most closely. The percentage for each calendar day represents the annualized return for that day. An example of how this is calculated is reflected next to the first day under the S&P 500 and in parenthesis:

S&P 500 (since 1950)

• Sep 7: -8.58% (Ex: cumulative gains =
  -1.46% over 43 trading days since 1950. -1.46% x 253/43 = -8.58%)
• Sep 8: +9.40%
• Sep 9: -39.40%
• Sep 10: -19.21%
• Sep 11: +26.07%
• Sep 12: +14.42%
• Sep 13: +14.64%
• Sep 14: +35.62%
• Sep 15: -15.42%
• Sep 16: +75.14%
• Sep 17: -59.17%
• Sep 18: +24.46%
• Sep 19: +19.39%
• Sep 20: -48.24%

NASDAQ (since 1971)

• Sep 7: +38.60%
• Sep 8: -3.15%
• Sep 9: -4.94%
• Sep 10: -2.38%
• Sep 11: +69.43%
• Sep 12: +2.47%
• Sep 13: +1.53%
• Sep 14: +65.92%
• Sep 15: -43.31%
• Sep 16: +37.98%
• Sep 17: -90.41%
• Sep 18: +33.87%
• Sep 19: +93.70%
• Sep 20: -37.69%

Russell 2000 (since 1987)

• Sep 7: +31.72%
• Sep 8: +48.76%
• Sep 9: -22.42%
• Sep 10: +2.18%
• Sep 11: +82.44%
• Sep 12: +63.15%
• Sep 13: +44.65%
• Sep 14: +58.36%
• Sep 15: -34.36%
• Sep 16: +82.55%
• Sep 17: -124.30%
• Sep 18: +75.90%
• Sep 19: +2.34%
• Sep 20: -97.95%

The S&P 500 data dates back to 1950, while the NASDAQ and Russell 2000 information date back to 1971 and 1987, respectively.

Final Thoughts

It was jobs week last week and while the numbers were better than expected, they cleared up nothing as far as interest rates go. In fact, a stronger-than-expected jobs number would add to the "raise rates" argument. It's an interesting debate, because if the economy is in the process of strengthening, it could very easily handle a 5% 10-year treasury yield. But, if the economy were strengthening, why would many cyclical areas of the market be so weak right now? Most discretionary areas are downtrending, not uptrending and prepping for a strong economy. So I hesitate to buy that argument.

Here's what I'll be thinking about this week:

Interest Rates. This remains my biggest concern. There is a precedence in place suggesting that a rapid rise in the 10-year treasury yield ($TNX) could spark a U.S. stock selloff. My current signals suggest any such selloff would be a great opportunity to buy. I see just as many signals, however, that tell me a deep selloff (>5%) is unlikely. So what do we do? Well, from a long-term perspective, I would not chance trying to time a top, then bottom. I do believe it's quite possible that we have another solid September. I cannot rule it out, even though history tells us it isn't likely.

Seasonality. September is not a good month historically. I think we all know that by now. The most bearish part of the month is from the September 19th close through the September 26th close. It's the second worst week of the year, producing an ANNUALIZED return of -42.72% since 1950 on the S&P 500. That equates to roughly 0.80% per week. So don't think we're going to drop 42%. Again, that's an annualized number. The actual average loss each year is less than 1%. But that's an AVERAGE, so clearly there are years that have produced much bigger losses that week. The last two Septembers have ended HIGHER than they began, but results during the September 19-26 week were mixed. In September 2025, this period lost roughly 0.3%, while in September 2024, this period saw a gain of about 0.5%. To give you an idea of what can happen, however, consider this one week period in September 2023, when the S&P 500 lost nearly 4%. 4% would represent 300 S&P 500 points currently.

Economic Reports. There will be no economic reports of consequence during this upcoming holiday-shortened week until Thursday, when initial jobless claims, August PPI, and August existing home sales come out. Then, on Friday, we'll get the biggest report of the week, the August CPI. Tame inflation reports would likely lead to a more difficult and hotly-debated Fed verdict later this month. However, if inflation is reported higher than expected, especially if it's at the consumer level (CPI), then I expect the Fed to raise the fed funds rate by a quarter point when they meet. I don't believe it'll be the start of a series of hikes, however. Instead, I believe it would simply be the Fed sending a message that they will not tolerate higher inflation. I think it would also help to establish Fed Chief Warsh's credibility among his more-hawkish peers on the FOMC.

Technical Conditions. First and foremost, the S&P 500 fell back to test 7610 price support almost exactly. The low was 7611. That remains the first major price support level to watch. Obviously, the S&P 500 cannot have a big move lower in September/October without first clearing this important technical hurdle. There are technical reasons why we should expect that to happen. The S&P 500 has printed a negative divergence on its weekly chart. Any time I see a negative divergence, I immediately think, "50-period SMA test and/or PPO centerline test". The 50-week SMA is currently at 7070 and rising. Does that mean that I'm saying we're heading to 7070? NO. It means that the RISK of a selloff is higher, not that one will occur. Again, as I say quite often, technical analysis to me means "evaluation of risk", not guaranteed outcomes. Knowing that there's a negative divergence during a historically-bearish calendar period adds to the risk, that's all.

Happy trading!

Tom