Wealth Watch Archives

November 5, 2026

NASDAQ Tantrum – Did Wall Street Just Throw AI Out with the Bathwater?

The markets are in a freefall, and there are lots of questions about what is going on with AI and Technology, which have sold off as if they have no value at all.

The HCM-BuyLine^® went negative on Monday, and we reduced exposure by roughly 30% by going to cash, as well as rotating out of some higher-risk, more volatile holdings to some lower volatility equities. When the HCM-BuyLine^® is positive we buy on pullbacks, and when the HCM-BuyLine^® is negative we do not. However, we did allocate a small portion of our capital to call options, which limits our downside risk to the premium paid while providing potential upside participation if the market rebounds.

This has been a very sloppy, volatile year, and the HCM-BuyLine^® has gone negative twice, which seldom happens. The NASDAQ is not far from turning negative for the year and is closing in on a 20% drop from its high, which is classified as a bear market.

What is the reason for all the selling, and why is the market falling like it is? One of the big drivers was the CapEx spending on data centers, because after this week’s elections we anticipate potential headwinds in that area.

QQQ, which is a representation of the NASDAQ-100 index, has dropped through support to $662, and we see the next level of support around $638. The S&P 500 – using the ETF SPY as a proxy – has not broken through its area of support around $729 which is encouraging.

Markets like this are always very uncomfortable, but historically, the bad days pass, the markets stabilize and eventually move back up. We will be patient and let the market play itself out. When the HCM-BuyLine^® turns back up, we have a lot of gunpowder to deploy into attractive opportunities, and yes, we do believe there will be some bargains. Stay patient as we navigate this period of volatility.

October 26, 2026

Poker Faces in October – Are the Bulls Waiting for the Ballot Box?

If we are going to have a year-end rally, the market has yet to show its hand as the S&P 500 is essentially flat well into October. We think the midterm elections have put the brakes on buyers wanting to show up. We believe there is a strong possibility that Republicans will lose the House, and keep the Senate, but at this point it’s really anyone’s guess. In our opinion, the buyers will probably show back up after the election once they have an idea of what to expect.

Expectations for a Q4 rally have been raised based on the S&P 500 cycle composite for 2026, which shows a historically bullish pattern, making a bottom in October and potentially signaling a strong rally through year-end. Given the backdrop of strong earnings growth and no evidence of a recession, we are giving the bulls the benefit of the doubt. We see the pullback as buyable, but we also would use some caution and be nimble.

Nvidia (NVDA) has pulled back to a very strong trendline. Intercontinental Exchange (ICE), which provides technology and data services to institutions, is breaking out and we think it could have room to run. Also, Tenable Holdings (TENB) is a software and security company that made another strong move to the upside to break through resistance.

Here is our take on inflation and why we could possibly see it staying higher for the foreseeable future. Even if the war were to end today and energy prices decline, history suggests they would likely remain above pre-war levels. In addition, ongoing supply chain pressures and the pass-through of higher energy costs and AI-related demand suggest that inflationary pressures will remain elevated well into next year. Data center and chip manufacturing plants like Elon Musk’s Terafab, which is being built in Grimes County, Texas, are multi-billion, multi-year projects. We believe Capex is one of the big reasons that inflation is being so stubborn and not dropping.

A lot of the inflation acceleration this year has been driven by supply side factors, including higher oil prices and rising global supply chain pressures related to the Iran war, broader geopolitical risk, and tariff distortions. But aggregate demand has also strengthened with the AI buildout driving capex while a stable labor market and wealth gains have supported resilient consumer spending.

October 14, 2026

Midterm Madness and Hot CPI – Do Choppy Waters Lie Ahead?

The market is pulling back due to a hot inflation reading, and in our opinion the midterm elections are playing a part in the selloff as well. I don’t expect much upward movement over the next three weeks until the midterm is finalized, but from our viewpoint the trend is still healthy, and the market is still strong.

In our opinion, Mastercard (MA) edged above a buy point Tuesday, while rival Visa (V) moved higher into the buy zone. The two leaders are driving the payments industry to a market-leading position. Also we are looking at Ligand Pharmaceuticals Inc. (LGND), which has formed a cup-and-handle pattern. We think a move above $318.00 would indicate a breakout.

The consumer price index for September showed a bigger-than-expected increase in core prices, helping keep alive the chance of an Oct. 28 Federal Reserve rate hike. The S&P 500 turned lower while Treasury yields jumped after the CPI inflation data.

After the pickup in core CPI inflation, markets are pricing in 44% odds of a quarter-point Fed rate hike on Oct. 28, about double the odds just before the economic release. Markets now see 96.5% odds of the Fed hiking by 25 basis points up through the Dec. 9 Fed meeting. Odds of an additional 50 basis points in hikes by the end of the year climbed to 46% from just 18%.

October 5, 2026

Building Bulls – Are Factories Funding A Q4 Tech Rally?

The Nasdaq continues to march higher, and after breaking resistance several times we think it is in a good position to move higher. Mid-term elections are coming up, and this will in all probability add a bit of volatility, but we still see the market pushing higher into the last quarter of the year. Yields continue to rise, putting a lot of pressure on bond prices.

As you will recall from our last Wealth Watch, we wrote about Shopify, Inc. (SHOP). After coming down and touching its 100 DMA, the stock is doing well. Another stock that looks like it could be ready to move higher is Charles River Laboratories International, Inc. (CRL).

The manufacturing sector has gained significant momentum this year, supporting the overall economic expansion. In the update for September, the ISM Manufacturing PMI edged down 0.1 point to a slightly below consensus reading of 54.5. But it has been above 50 for all of 2026 to date and has averaged 54.9 in Q3, the highest level since mid-2022. Growth has also broadened, with more than 2/3 of subindustries reporting gains in the past several months, which bodes well for the sustainability of expansion.

While manufacturing accounts for a modest ~10% of GDP, its cyclical nature often dictates the direction of the overall business cycle. The latest readings suggest that economic growth has heated up in Q3. Importantly, it is a tailwind to corporate earnings growth, implying a fundamental support to the bull market in equities.

September 14, 2026

Skynet, Oil Spikes, and Rate Hikes: Cue the Year-End Rally?

The market has pulled back with news that AI could get out of control, rising oil prices, and the likelihood that the Fed will raise rates this week. Three negatives combined to put downward pressure on investors. However, we believe the market is reaching oversold conditions, so we hope to find an area of support soon. In other words, we see this as a buying opportunity.

This is nothing new on AI, but I think the bigger eye-opener is a bit different than most, including myself, thought. Many people thought that it would cause massive unemployment, which as time passes, does not look to be the case. Their fears, as we are learning, are more along the lines of AI taking over the codes for nuclear weapons, cyber-attacks, shutting down the electrical grid, and the list goes on. The talk over the weekend was about governments around the world who need to step in and build guardrails, so to speak. We will save everyone the suspense; governments will not step in until it blows up in everyone’s face. So, if you do not have some form of risk management system like the HCM-BuyLine®, for Heaven’s sake get one!

Oil prices have jumped, and several refiners, including Phillips 66 (PSX) and Marathon Petroleum (MPC), now look overbought and somewhat parabolic. Given the strength across the broader energy sector, we are looking to lock in profits in some of our energy holdings.

On the buy side, CrowdStrike Holdings, Inc. (CRWD) appears to be breaking out, and we believe it looks like they are ready to move higher. Shopify Inc. (SHOP) has pulled back to its 100 DMA and is building up momentum.

The new Fed Chair Warsh, in his last statement, has indicated a rate hike is in the cards this week, so we expect a quarter point rise in rates at the next Fed meeting.

But let’s close on a very optimistic note:

In the past 10 sessions, as all will know, oil has risen more than 20% while U.S. 10-Year Treasury Bond yields have risen more than 30 basis points. A rare circumstance.
Bond yields rising along with oil have caused a short-term drop, or a period of volatility, which corrected itself in 2 to 3 months followed by a very nice rally in stocks.
This has happened 12 times since 1983. Every single completed episode produced a positive SPX return at +12 months, ranging from +13.6% to +28.4%.

All that to say, we are looking for the market to be somewhat sloppy with a strong year-end rally.

September 4, 2026

Knock, Knock. Who’s There? An S&P 500 All-Time High?

The S&P 500 broke out of resistance in early August and is now trying to push through another level of resistance. We believe a move above this level should lead to a new all-time high on the S&P 500.

CF Industries (CF) is making a push to break out at $139.00, along with AbbVie Inc. (ABBV) at $264.00. Gold is holding and looks like it is ready to move higher.

The small-cap Russell 2000 index led the stock market higher on Wednesday even as the 10-year Treasury yield topped 4.8% for the first time since January 2025. The rebound in equities comes in the wake of Tuesday’s sharp losses that downgraded the market outlook.

The Russell 2000 rallied 1.1% on Wednesday while the Dow Jones Industrial Average followed up by rising 295 points, or 0.6%. The S&P 500 and the tech-heavy Nasdaq composite each moved up 0.5%. All four indexes snapped a run of three consecutive losses.

Investors started the session with labor-market data in hand. ADP said private payrolls rose by 38,000 in August, missing estimates that called for a gain of 48,000. August marked the slowest pace of job creation since January. The ADP jobs data is seen as a precursor to Friday’s jobs report from the Labor Department.

Economists widely anticipated a moderate gain of 55,000 in U.S. payrolls after a surprising 23,000 decline in July. The unemployment rate is expected to tick higher to 4.2% from 4.1% in July, per Econoday.

August 18, 2026

Hawks in the Fed, Bulls in the Market

The trend is up and any pullback should be considered buyable, in our opinion. The S&P 500 is trading around 7,700 and still looks like it could be headed to our target of 8,000 by year-end.

Earnings have been solid. Of the 454 companies that have reported so far (91% of the S&P 500):

Overall, 87% are beating estimates, and those that “beat” are beating by a median of 7%.
Of the 13% missing, those are missing by a median of -2%.
On the top line, overall results are beating estimates by a median of 4% and missing by a median of -3%, and 76% of those reporting are beating estimates.

Dorian LPG Ltd. (LPG) broke out of a cup-and-handle pattern and looks like it could be moving higher. Also take a look at FedEx (FDX). We think a move above $344.00 would confirm a new breakout has begun.

West Texas Intermediate Crude futures were up nearly 3% in recent trading, rising to around $84.80 per barrel. Oil rose after Trump told Fox News that the U.S. would “bomb the s***” out of Oman if the country “gets in the way” of U.S.-Iran negotiations with their 60-day ceasefire expiring Monday.

Brent crude, the international energy benchmark, posted a similar gain to WTI and was up to $91.10 per barrel. Murban Crude jumped nearly 7% to trade at $95.45 per barrel. The latter is produced in Abu Dhabi and is a benchmark for Middle Eastern exports heading to Asian markets.

The 30-year Treasury yield climbed 4 basis points to 5.21% and the 10-year Treasury yield rose 3 basis point to 4.72%. Bitcoin was up nearly 2% to around $64,300 per token.

The minutes from the Federal Reserve’s policy meeting are set for release Wednesday. At that meeting, the Fed held its benchmark interest rate steady, but multiple dissents in favor of a rate hike support market expectations for a tightening of monetary policy in September.

Three members of the Fed policy-setting panel, the Federal Open Market Committee, or FOMC, dissented, preferring a rate hike. That made the vote 9-3 in favor of steady policy. That level of dissent is uncommon.

July 31, 2026

Next Stop 8,000? Why We’re Not Sweating the Summer Chop

The Nasdaq composite and artificial intelligence chip stocks staged a snapback rally Thursday following the market’s battering by renewed U.S.-Iran hostilities and the aftermath of the Federal Reserve’s decision to leave interest rates steady. We think the AI trade has sold off enough at this point, with a lot of AI stocks giving back 50% or more of their gains. The much-discussed leverage has finally pulled back, and we believe volatility is going to be here for a couple more weeks, probably into mid-August. Will the AI stocks shoot back up to their all-time highs? We think the odds are slim, but if they do, they will most likely start to work their way back up at a more measured pace, with a more normal trading pattern. The market has broadened out, and we expect the index to move higher, especially in Q4. Our target for the S&P 500 is still to get close to, if not exceed, 8,000.

Three stocks to watch:

Amgen (AMGN) – look for a break above $401.00

V2X (VVX) – look for a break above $91.00

Murphy USA (MUSA) – look for a break above $630.00

U.S. real growth surprised to the downside, but the underlying demand is strong. Real GDP increased at a 1.5% annualized rate in Q2, below the consensus and the prior quarter’s 2.1% growth rate. Stronger consumer spending and continued capex growth were positive drivers, while net exports, inventories, and the government sector were drags.

Final sales to domestic purchasers, which excludes net exports and inventories, rose at a 3.1% annualized rate, the most since Q3 2024, and above the long-run average of 2.8%, indicating strong domestic demand. Final sales to private domestic purchasers, which also excludes the government sector, rose at an even stronger 3.9% annualized rate, the most in over three years. Such buoyant domestic demand is keeping inflation pressures elevated.

July 28, 2026

Small Caps, Big Moves, and Tech On Sale

Investors appear to be more focused on corporate earnings than rising oil prices, Treasury yields, and gold. But the focus could shift back to the broader macro picture when the Federal Reserve meets on July 29. The Nasdaq-100 sank to an intraday low of 27,452.95, which was nearly 11% below its record high of 30,762.20, putting it in correction territory. We see this as a buying opportunity in semiconductors and the NASDAQ, which have both pulled back substantially after a large run up. We feel this is not the end, but the beginning.

Small-caps have been in a long-term, secular bear market relative to large-caps since 2011. While large-caps and small-caps have gone through multiple rounds of being in and out of favor (13 in the last 100 years, by our count), the current one is the longest on record.

We are approaching the one-year anniversary of the small-caps’ 25-year low versus large-caps. Since then, small-caps have outperformed large-caps by as much as 18%, depending on the benchmark. Those types of small-cap surges are traditionally reserved for the beginning of economic expansions, when small-caps are often deeply oversold, or the start of small-cap secular bulls.

West Texas intermediate crude oil futures fell more than 2%, trading around $80.50 per barrel. The 10-year Treasury yield dropped 4 basis points to around 4.6%.

176 companies are reporting this week.

Of the 143 companies that have reported so far (29% of the S&P 500):

Overall, 87% are beating estimates, and those that “beat” are beating by a median of 7%.
Of the 12% missing, those are missing by a median of -2%.
On the top line, overall results are beating estimates by a median of 3% and missing by a median of -2%, and 79% of those reporting are beating estimates.

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