EB Daily Market Report - Thursday, October 9, 2025

Tom Bowley - October 09, 2025

Note

We apologize for emails that arrived late yesterday or did not get sent at all. Our email server was down for a period of time yesterday, plus we simply missed sending out our TP Live Trading Room email. Wednesday's Daily Market Report was lost in cyberspace, but it has been posted to our website, if you'd like to check that out. Again, we apologize for any inconvenience this may have caused.

Executive Summary

Futures were slightly higher this morning and our major indices opened higher
Fortunes turned for many stocks after the opening bell, however, leading to much selling throughout the day
Our major indices are trying to rally into the close
Only one sector is higher today - consumer staples (XLP, +0.26%)
The other 10 sectors are lower, led by industrials (XLI, -1.40%) and materials (XLB, -1.39%)
Technology (XLK, -0.20%) is outperforming on the session again, led by renewable energy ($DWCREE, +1.34%) shares - see below
Cryptocurrencies are lower, indicative of a risk-off market environment like the one we have today
Commodities are struggling as gold ($GOLD, -1.89%) retreats from its first-ever trip above $4000 per ounce
PepsiCo, Inc. (PEP, +3.82%) is having a very solid day after reporting quarterly results ahead of expectations

Market Outlook

In the past, many reversals have occurred when we see positive correlation between the S&P 500 and the Volatility Index ($VIX). The normal relationship here is one of an inverse nature, so it's odd to see the two charts move in the same direction simultaneously and that's what a positive correlation tells us. Let's look at an S&P 500 chart, with the VIX below, and finally, the recent positive correlation in the bottom panel:

Keep in mind these positive correlation signals are typically very short-term in nature, but they can certainly lead to a short-term market reversal. From a longer-term perspective, I wouldn't really change a thing. Even if we do see a short-term period of selling and/or consolidation, the long-term signals do not support a correction or bear market. Also, remember it's Q4 and we're only a couple weeks away from the start of the most bullish period of the year historically.

From a trading perspective? Well, it gets a bit dicier here. Personally, I'd avoid leverage and margin. I believe the short-term risks of a 2-3% pullback have heightened. This doesn't mean that we'll see a selloff, it simply means that the risks on one have increased. Those wanting to be much more cautious could move to a much higher level of cash, which is what I am doing today.

Sectors/Industries

Since the Fed cut interest rates in September, one of the best industry groups has been renewable energy. Trading stocks in this area has made a lot of sense and continues to be a solid area. The uptrend is clear and I'd look for support to be strong on any pullback to the 400-410 area:

4 stocks in the renewable energy space are on our Short Squeeze ChartList (SSCL), meaning that plenty of traders are betting heavily against these stocks. That can add to the returns of stocks when money rotates into the group. Here are the four stocks currently on our SSCL and their one-month returns in parenthesis:

PLUG (+165.85%)
SEDG (+28.38%)
RUN (+26.25%)
EVGO (+19.62%)

ChartLists and Trading Strategies

I ran a scan of stocks testing their 20-day EMA against four of our ChartLists - the Strong Earnings (SECL), Strong Future Earnings (SFECL), Raised Guidance (RGCL), and Strong AD (SADCL) - and required a SCTR score of at least 90. 12 stocks were returned as follows (in SCTR order, highest to lowest):

OPEN, NKTR, LITE, JOBY, LASR, SMR, RMBS, NET, EYE, OSS, KGC, DDS

Of these, I like JOBY and RMBS as both are currently testing price support as well. Check these out:

JOBY

RMBS

Upcoming Earnings

We will begin tracking the daily Upcoming Earnings and the Weekly Upcoming Earnings Relative Strength ChartLists for Q3 earnings this weekend, featuring many large financial companies that will report their quarterly results next week.

Economic Reports

Economic reports due out based on government data continue to be delayed, because of the U.S. government shutdown.

Happy trading!
Tom