SPY and QQQ are near their 2026 highs, but weak participation makes this a precarious market to enter. I want the market’s leaders to hold support before considering new positions.
SPY gained 1.3% last week, while QQQ rose 3.2%. SPY history, QQQ history.
Only about three in ten tracked stocks are above their 20-day average. The 50-day reading is similarly weak. Just 46% are above the 200-day average. The rally depends on its biggest names holding up.
The overnight selloff followed renewed Iran uncertainty. Trump rejected Tehran’s latest proposal over the weekend. A deal to reopen the Strait of Hormuz remained unresolved, though he expected talks to resume this week. AFP reporting.
Reuters reported that the oil rebound revived inflation concerns as Treasury yields rose. At 5:42 a.m. Eastern, S&P 500 futures were down 0.5%. Nasdaq 100 futures were off 1%. Reuters market report.
The macro backdrop adds pressure. Higher bond yields can compress growth-stock valuations. A firmer dollar weighs on the value of overseas earnings.
VIX fell 5.11% on Friday, then rebounded about 8% Monday morning. Oil-linked USO gained about 2.6% premarket, trading near $152–$153. VIX data, USO prices.
The next tests are PCE inflation on Wednesday, September 30, and September jobs on Friday, October 2. Both arrive at 8:30 a.m. Eastern. CPI is October 14. BEA calendar, BLS calendar.
Our September study and Friday’s Note flagged this seasonal weakness. In six midterm years from 2002 to 2022, September’s fourth Monday was negative five times for the S&P 500 index and four for QQQ. This small sample is context, not a forecast.
For SPY, I am watching $763–$766 as support and $773–$775 as the overhead test, based on last week’s trading.
For QQQ, first support is $738–$740, followed by $734–$735. The overhead test is $746–$748.
My watchlist is focused on areas already showing strength.
The Magnificent Seven ETF MAGS gained 3.1% last week and broke to a new 2026 high before easing back. The technology-sector ETF XLK rose 3.5% and finished 1.2% below its 2026 high, close to a breakout. MAGS prices, XLK prices.
Chips are outperforming the broader Nasdaq 100. The SOXX/QQQ ratio has turned higher in September and moved above its declining trendline from June. That makes SOXX another area to watch.
Bitcoin gained 3.9% between its September 18 and September 25 daily closes. Ether rose 3.2% over the same dates. Bitcoin history, Ether history.
Monday’s early pullbacks in mega-cap tech and crypto reinforce the need for patience. I want support to hold and buying to resume before acting on this watchlist.
Disclaimer:
This article is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. Any opinions, scenarios, price targets, or market observations reflect my personal views and may change without notice. Investing and trading involve substantial risk, including the possible loss of principal. You are solely responsible for your own investment decisions, position sizing, risk management, and trades. Conduct your own research and consult a qualified professional where appropriate.