EB Daily Market Report - Tuesday, October 6, 2026

Tom Bowley - October 06, 2026

Executive Summary

Futures were higher overnight and our major indices gapped higher at the open
The S&P 500 has broken to a new all-time high today, but a reversal into the close could be problematic
The 10-year treasury yield ($TNX) is down 5 basis points to 5.27%
Interest rate sensitive areas are mixed as homebuilders (XHB, +1.07%) rally, while regional banks (KRE, -0.55%) weaken
Small caps (IWM, -0.69%), another rate sensitive area, are much weaker than their larger cap brethren like the S&P 500 ($SPX, +0.68%)
9 of 11 sectors are higher, with utilities (XLU, +2.20%) surging
Health care (XLV, -0.18%) is the primary laggard, as biotechs ($DJUSBT, -1.13%) take a rare day off, testing their rising 20-day EMA
Some former leaders are beginning to kick into gear again as we approach earnings: Ciena (CIEN, +11.62%) and Comfort Systems (FIX, +5.75%) are a couple examples

Market Outlook

Many short-term, and even long-term, tops form by breaking to a new high intraday, but then failing to hold that breakout into the close. That will be something I'll be watching closely this afternoon. If the S&P 500 closes today back beneath 7800, we'd have a failed breakout attempt with a long tail to the upside:

There's no way to tell if we're going to see the "breakout" or the "false breakout" at this point. Only the close will tell us that. If we do fail on this breakout, it's not a long-term issue, but could be problematic short-term.

Sectors/Industries

Heavy construction ($DJUSHV), one of the leading industry groups during the current secular bull market, has been downtrending for the past 5 months or so. The group has awakened in October, however, and is threatening to clear an obvious downtrend line:

The positives are starting to build. First, the PPO has crossed back over its centerline. The RSI, generally held back at 60 during downtrends, has just surged back towards 70, a bullish signal. The group's relative downtrend channel appears to have been broken. It seems like we just need price confirmation to clear the current downtrend.

ChartLists and Trading Strategies

I highlighted the strengthening heavy construction group. When I search our Strong Earnings ChartList (SECL), there are 4 heavy construction stocks listed. They are PWR, TPC, FLR, and AGX. That's their SCTR order as well, with PWR the clear leader with a SCTR score of 88.4. That tells us it's a leading stock within the DJUSHV group. STRL is another in this space that's on our Raised Guidance ChartList (RGCL) and has a SCTR score of 87.6. Here are the charts of PWR and STRL:

I like both of these charts. PWR has already advanced quite a bit and is now up against initial price resistance. STRL is a little later to get started, but it just made a significant move back above its 50-day SMA, with a long way to go potentially. The success of these two companies is very likely dependent on the DJUSHV group's performance. Best entry into either of these two stocks would be a test of their now-rising 20-day EMAs. But will they pull back first?

Upcoming Earnings

Upcoming Earnings and Upcoming Earnings Relative Strength ChartLists are produced for EB.com members to track upcoming earnings reports and provide them to you via ChartLists throughout earnings season. We will begin publishing Upcoming Earnings ChartLists again this weekend as JP Morgan (JPM) and other large money center banks will be reporting results, starting on Tuesday.

Economic Reports

None

Happy trading!

Tom