The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full report, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

This week’s report includes 21 charts and tables in four sections:

1. Performance recap of tactical and strategic allocations.
2. Price action analysis, weekly market summary, and market forecast, including an update of the technical analysis of S&P 500 price action. A brief discussion of alternative value ETFs.
3. Details of the performance and positions of the tactical and strategic allocations.
4. An analysis of price attractor levels and general discussion about their significance.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, November 6, 2026:

– The weekly strategy tactical ensemble (WRE) ended the week unchanged. Year-to-date: +14.1%. WRE is up 18.7% year-to-date with 1.6x leverage to match the SPY ETF volatility. For the positions and any new signals of WRE, see Section 3.
-The Price Action Lab strategic allocation (PALSA) fell 3.1%. Year-to-date: +12.9%. PALSA is up 21.8% year-to-date with 1.7x leverage to match the SPY ETF volatility.
-The SPY ETF fell 0.6%. Year-to-date: +8.7%.

2. Price action analysis, weekly market summary, and market forecast

Market asset trends (red/blue colors indicate an up/down change from the previous week/month)

Top 10 S&P 500 winners this week

Bottom 15 S&P 500 losers this week

Sector performance

Summary

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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Strange Attractors – Weekly Market Report was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

This week’s report includes 18 charts and tables in four sections:

1. Performance recap of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast, including an update of the technical analysis of S&P 500 price action.
3. Details of the performance and positions of the tactical ensemble and strategic allocation.
4. An analysis of a hedge that investors did not expect to break.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, October 30, 2026:

– The weekly strategy tactical ensemble (WRE) ended the week unchanged. Year-to-date: +17.5%. WRE is up 23.3% year-to-date with 1.6x leverage to match the SPY ETF volatility. For the positions and any new signals of WRE, see Section 3.
-The Price Action Lab strategic allocation (PALSA) fell 1.1%. Year-to-date: +16.5%. PALSA is up 28.1% year-to-date with 1.7x leverage to match the SPY ETF volatility.
-The SPY ETF fell 0.6%. Year-to-date: +11.7%.

2. Price action analysis, weekly market summary, and market forecast

Market asset trends (red/blue colors indicate an up/down change from the previous week/month)

Top 10 S&P 100 winners this week

Bottom 10 S&P 100 losers this week

Sector performance

Summary: This week, investors rotated from tech positions into defensives and cyclicals (XLV, XLB, XLU, and XLY). The XLV and XLB ETFs are in overbought territory. Tech (XLK) is approaching oversold territory, while oversold communication services (XLC) could be the next candidate for a rebound. Energy (XLE) and health care (XLV) made new, all-time highs. For more detailed AI-assisted analysis of sector performance, you can access the “Markets at a Glance” section of the website. Click here. 

A notable market event

Alphabet (GOOGL, GOOG) plunged 12.3% on Thursday, October 29, 2026, after reporting disappointing Q3 results.

The 12.2% daily loss was the largest since the IPO in August 2004 and, based on the available sample of daily returns, represented a nearly 7-sigma drop below the mean.

Outlier losses in individual stocks occur more frequently than a normal distribution predicts. The GOOGL stock is down 10.4% year-to-date and 30.4% below its all-time highs, after erasing a 28.7% gain for the year reached on May 13.

This week, Boeing (BA) also fell 10.7% on Tuesday, October 27, 2026, and Caterpillar (CAT) fell 9.25% on Thursday, October 29, 2026. These daily drops in large-cap stocks, and in this case Dow-30 components, are a reminder of the unpredictable nature of the markets and the high risks of concentrated equity portfolios. Note that despite the heavy losses in a few component stocks, the Dow-30 finished the week down 0.9% due to its diversification.

Analysis of S&P 500 index price action

The S&P 500 index fell 0.6% for the week. Below, we update our analysis from last week.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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A Broken Hedge – Weekly Market Report was originally published on Price Action Lab

We include an update on the performance of the strategies in the strategy bundle and the performance of the equal allocation portfolio.

The strategy bundle includes eight strategies that generate signals for ETFs and Dow-30 stocks in the daily timeframe. Click here for more information.

All backtests in this article include $0.01/share commission and slippage. In the case of strategies that generate signals for stocks, we have used data series with delistings compiled by Norgate Data.

Below is the relative performance of the eight strategies and of the equal allocation bundle (~~~BUNDLE) since 2008.

The best-performing strategies have been B2S2, which generates signals for Dow-30 stocks, and MRMOM and ETFMR, which generate signals for ETFs.

Below is the year-to-date relative performance of the eight strategies and of the equal allocation bundle (~~~BUNDLE).

The two strategies that generate signals for Dow-30 stocks are outperforming, and one strategy, ETFSEAS, that generates signals for ETFs based on seasonality, is in the red.

Below is a backtest from 01/02/2008 to 10/28/2026 of the equal allocation bundle (1/8 equity allocation to each strategy), annual rebalance, and 2x leverage. Note that the strategies do not share closed equity for sizing positions. In general, sharing closed equity between strategies increases path dependency significantly, and it is something to be avoided in backtests because the results can be misleading.

Year-to-date, the ensemble is up 14.4%. Note that the backtests do not take into account margin cost, so in reality the performance is lower but higher than the unleveraged performance of 8.5%.

For more information, contact us.

Disclaimer: The strategies are provided for informational purposes only and do not constitute investment advice or actionable content. We do not warrant the accuracy, completeness, fitness, or timeliness of any particular purposes of any strategy. Under no circumstances should the strategies be treated as financial advice. Please read our Disclaimer and Terms and Conditions.

Copyright notice: Any unauthorized copy, reproduction, distribution, publication, display, modification, or transmission of any part of this report is strictly prohibited without prior written permission.

Update: Strategy Bundle Year-to-date Performance was originally published on Price Action Lab

The market alert is for Premium Articles subscribers. To access the report, you must subscribe to Premium Articles.

Spot gold (XAUUSD) is down 25.6% from the all-time closing high of 5,399.24 on January 28, 2026.

Rising bond yields and massive sales due to the war in the Middle East have been the primary drivers of the correction in gold. Below is our analysis.

Disclaimer: These articles are intended for informational purposes only and should not be considered as investment advice or actionable content. We do not warrant the accuracy, completeness, fitness, or timeliness for any particular purposes of the articles. You should never treat the articles as financial advice. The author is not a registered financial advisor; therefore, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

Price Action Lab Alert: Gold was originally published on Price Action Lab

Markets at a Glance now includes daily updates for 42 popular ETFs, 24 strategy ETFs, AI-assisted daily sector analysis, and technical and pattern signals for 81 ETFs and S&P 100 stocks. Market at a Glance has grown to more than a daily blog article.

The free section of Market at a Glance includes daily updates for a total of 42 ETFs.

The subscriber section includes the performance of 24 strategy ETFs, AI-assisted analysis of sector performance, technical and pattern signals for 81 ETFs and S&P 100 stocks, and a sortable and searchable table for the 81 ETFs.

All-in-all, the Markets at a Glance section of the website is more than a daily blog article. There are no bells and whistles; only useful information the website visitors and subscribers can use to enhance their understanding of market conditions and price action. The objective is not to impress with fancy colors and charts but to minimize clutter and noise and maximize value.

We plan to add more features to Markets at a Glance in the near future.

Premium Content

Markets at a Glance: More than a Daily Blog Article was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

This week’s report includes 18 charts and tables in four sections:

1. Performance recap of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast, including an update of the technical analysis of S&P 500 price action.
3. Details of the performance and positions of the tactical ensemble and strategic allocation.
4. A review of a pair trade from the report of June 26, 2026, up +12.4% in four months.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, October 23, 2026:

– The weekly strategy tactical ensemble (WRE) gained 0.2%. Year-to-date: +17.5%. WRE is up 23.2% year-to-date with 1.6x leverage to match the SPY ETF volatility. For the positions and any new signals of WRE, see Section 3.
-The Price Action Lab strategic allocation (PALSA) fell 0.1%. Year-to-date: +17.8%. PALSA is up 30.3% year-to-date with 1.7x leverage to match the SPY ETF volatility.
-The SPY ETF fell 0.4%. Year-to-date: +12.3%.

2. Price action analysis, weekly market summary, and market forecast

Market asset trends (red/blue colors indicate an up/down change from the previous week)

Top 10 S&P 100 winners this week

Bottom 5 S&P 100 losers this week

Sector performance

Summary: This week, energy (XLE) and health care (XLV) were the top winners, while industrials (XLI) and communication services (XLC) were the bottom two losers, with the latter down 4.4% for the week, down 9.6% year-to-date, and 11.3% below all-time highs. Software, defense, and healthcare stocks gained as the rotation continued, while the selling pressures on semiconductors, communications, and online services persisted. There is no conclusive evidence yet that the rotation in the stock market is forecasting a bear market, but similar action has preceded most large corrections. For now, we attribute the rotation to profit-taking after significant gains in the tech sector (XLK), which is still up 27.7% after earlier gains of 40.8% this month before the correction started. The big winner this year is the energy sector (XLE), up 58.1% at new all-time highs.

Most passive investors missed the large returns of the energy sector, but tactical investors, and especially those who use momentum, took advantage of the rally in energy stocks depending on their allocations. For example, in the six-strategy ensemble, which we have used for weekly market signals since 2017, year-to-date, two strategies outperform the benchmark: asset- and sector-cross-sectional momentum, with returns of 22.4% and 20%, respectively, because of positions in energy-related ETFs.

Analysis of S&P 500 index price action

The S&P 500 index fell 0.5% for the week. Below, we update our analysis from last week.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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Pair Trade Closed – Weekly Market Report was originally published on Price Action Lab

The consumer staples sector has rallied in the past 12 days since the S&P 500 index made new, all-time highs. The XLP ETF has surged 10%, while the SPY ETF has fallen 2%.

The XLP ETF is up 18.1% year-to-date, versus a 13% gain for the SPY ETF.

Historically, consumer staples have signaled a defensive positioning in the markets and tend to outperform cyclicals during economic downturns. In the past, consumer staples outperformance has been a leading indicator of recessions. However, in our analysis we have always brought attention to the fact that the historical samples are small, and any forecasts based on relative performance of sectors and assets always carry low significance.

In this article, we focus on the changes in correlation over the past 12 trading days since the S&P 500 index reached its all-time high. Below is a table of sector performance, the 0-lag, 60-day correlation with the SPY ETF, and the change in the past 12 trading days.

As expected, the correlation between SPY and XLP ETFs shows the largest change of -0.22, i.e., the two ETFs have become anti-correlated after a neutral correlation. Financials (XLF) also show decreasing correlation along with utilities (XLU). Note that the energy sector (XLE) is anti-correlated with the stock markets and is up 54.1% year-to-date.

Next, we look at correlation changes in market assets and popular ETFs and whether there is a forecast of a recession hidden in the noise.

Disclaimer: These articles are intended for informational purposes only and should not be considered as investment advice or actionable content. We do not warrant the accuracy, completeness, fitness, or timeliness for any particular purposes of the articles. You should never treat the articles as financial advice. The author is not a registered financial advisor; therefore, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Statistical analysis in R. Data provider: Norgate Data

Correlations changed—is a recession coming? was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

This week’s report includes 20 charts and tables in four sections:

1. Performance recap of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast, including an update of the technical analysis of S&P 500 price action and a brief analysis of market breadth.
3. Details of the performance and positions of the tactical ensemble and strategic allocation.
4. A current market dynamic that, in the past, fooled investors and caused significant losses, including a brief discussion of its drivers.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, October 16, 2026:

– The weekly strategy tactical ensemble (WRE) fell 3.5%. Year-to-date: +17.3%. WRE is up 22.7% year-to-date with 1.6x leverage to match the SPY ETF volatility. For the positions and any new signals of WRE, see Section 3.
-The Price Action Lab strategic allocation (PALSA) fell 3.1%. Year-to-date: +17.9%. PALSA is up 30.5% year-to-date with 1.7x leverage to match the SPY ETF volatility.
-The SPY ETF fell 2%. Year-to-date: +12.8%.

2. Price action analysis, weekly market summary, and market forecast

Major market asset trends

Top 10 S&P 100 winners this week

Bottom 10 S&P 100 losers this week

Top S&P 500 losers since October 6, 2026

An example: Super Micro Computer Inc. (SMCI)

The SMCI stock has plunged 26.8% in the past eight trading days since the NASDAQ-100 index made a new, all-time high. The stock was down 29.9% for the year in March, then was up 71.4% for the year in early June, and the current performance is 8% up for the year. This stock, along with many others in the tech sector, has traded like a cryptocurrency. Alternatively, the push to compete with the crypto market and provide similar technology for trading stocks (tokenization, 24/7, etc.) may be one reason that these names are trading like crypto coins.

Sector performance

Summary: This week, tech stocks drove the stock market sell-off. If we ignore for a moment the tech sector (XLK), which plunged by 7.7%, the remaining activity is more like that of a normal market. But this market is tech-driven, and large-cap tech stocks determine the overall direction of the drift. The SMH and SOXX semiconductor ETFs fell 10.5% and 11.85%, respectively, while consumer staples (XLP) gained the most, by 5%, and are in overbought territory. Energy (XLE) gained 4.9% to new, all-time highs. All in all, there was a rotation this week from tech stocks, some of which had already triple-digit returns year-to-date, into stocks of the more traditional economy, such as aerospace and defense and health care. Therefore, the tech sell-off could be attributed to profit-taking, while the gains in other sectors may reflect a dynamic that has previously led to destructive outcomes; more details are included in Section 4 below.

Analysis of S&P 500 index price action

The S&P 500 index fell 1.9% for the week. Below, we update our analysis from last week.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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A Destructive Dynamic – Weekly Market Report was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

1. Performance of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast, including an update of the technical analysis of S&P 500 price action and a brief discussion about the risks of deleveraging.
3. Details of tactical ensemble and strategic allocation
4. Analysis of a significant correlation regime change and conclusion.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, October 9, 2026:

– The weekly strategy tactical ensemble (WRE) was unchanged for a second week. Year-to-date: +21.6%. WRE is up 28.2% year-to-date with 1.6x leverage to match the SPY ETF volatility. For the open positions and any new signals of WRE, see Section 3.
-The Price Action Lab strategic allocation (PALSA) gained 0.4%. Year-to-date: +21.7%. PALSA is up 36.9% year-to-date with 1.7x leverage to match the SPY ETF volatility.
-The SPY ETF gained 1.2%. Year-to-date: +15.1%.

2. Price action analysis, weekly market summary, and market forecast

Major market asset trends

Top 10 S&P 500 winners this week

Bottom 10 S&P 500 losers this week

Sector performance

Summary: All assets gained this week. Tech stocks (XLK) and industrials (XLI) fell as breadth recovered slightly (additional data is included after the S&P 500 index analysis), with oversold utility and REIT stocks rebounding and semiconductor stocks falling, but it is still early to call it a sector rotation. The SMH and SOXX semiconductor ETFs fell 4.3% and 5%, respectively, while the utilities sector (XLU) gained 4%, but year-to-date is still in the red, down 1%. Energy (XLE) outperforms by a wide margin, up 48.4% year-to-date, after a 3.6% gain for the week. Sector rotation may gain momentum if the energy market enters a short-term correction.

Analysis of S&P 500 index price action

The S&P 500 index gained 1.2% for the week. Below, we update our analysis from last week and also include performance data for equity indices.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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Correlation Regime Change – Weekly Market Report was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

1. Performance of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast, including an update of the technical analysis of S&P 500 price action. We include a historical analysis of the seven-week breadth deterioration in the stock market.
3. Details of tactical ensemble and strategic allocation
4. Macro dynamics discussion and conclusion.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, October 2, 2026:

-The weekly strategies tactical ensemble (WRE) was unchanged. Year-to-date: +21.6%. The allocation is up 28.2% year-to-date with 1.6x leverage to match the SPY ETF volatility. For the open positions and any new signals of WRE, see Section 3.
-The Price Action Lab strategic allocation (PALSA) fell 0.4%. Year-to-date: +21.3%. The allocation is up 36.2% year-to-date with 1.7x leverage to match the SPY ETF volatility.
-The SPY ETF fell 0.2%. Year-to-date: +13.7%.

2. Price action analysis, weekly market summary, and market forecast

Major market asset trends

Top 10 S&P 500 winners this week

Bottom 10 S&P 500 losers this week

Sector performance

Summary: Bonds and commodities fell, while equities were mixed and the US dollar gained. Tech stocks (XLK) gained with key indexes making new all-time highs, while health care (XLV), financials (XLF), and communication services (XLC) fell the most. Software stocks remain under pressure, and this week there was also some profit-taking in computer hardware stocks. The rally in cruise line stocks (CCL, RCL) was likely due to a technical rebound after a six-week losing streak in the S&P 500 Hotels, Resorts & Cruise Lines Index.

Apart from a technical rebound, there is currently no reason to attribute any significant change in the macro environment or geopolitical conditions to the S&P 500 Hotels, Resorts & Cruise Lines Index’s rebound. Note that year-to-date performance fell precipitously into the red after the temporary ceasefire in the Middle East war ended in late August.

Analysis of S&P 500 index price action

The S&P 500 index fell 0.3% for the week. Below, we update our analysis from last week and also include an analysis of a price action pattern.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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Yields Mean Reversion – Weekly Market Report was originally published on Price Action Lab

This premium report includes an update on the monthly rebalanced Market Signal strategies. A Market Signals subscription provides access to the entire report.

Click here for the latest report after the rebalance.

Positions and strategy performance: Wednesday, September 30, 2026

Access the full report with a Market Signals subscription. Hundreds of articles are instantly available to you if you subscribe. Subscribers to Market Signals have instant access to more than 200 articles in the Premium Education section, as well as monthly signals for dynamic momentum and hybrid asset allocation.

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Disclaimer: The Weekly Signals are provided for informational purposes only and do not constitute investment advice or actionable content. We do not warrant the accuracy, completeness, fitness, or timeliness for any particular purpose of the Weekly Signals. Under no circumstances should the premium or weekly signals be treated as financial advice. The author of this website is not a registered financial adviser. Before subscribing, please read our Disclaimer and Terms and Conditions.

Copyright notice: Any unauthorized copy, reproduction, distribution, publication, display, modification, or transmission of any part of this report is strictly prohibited without prior written permission.

Market Signals for October 1, 2026 was originally published on Price Action Lab

On Monday, September 28, 2026, spot gold fell 4%, the S&P 500 index lost 0.8%, and bond yields added six basis points. We looked at similar moves going back in history and included some key statistics. To access the full report, you must subscribe to Premium Articles.

Below is a histogram of spot gold (XAUUSD) since 1982, along with statistics.

The 4% drop on Monday, September 28, 2026, was roughly four standard deviations from the mean and six mean absolute deviations. Only 38 daily losses of more than 4% have occurred since 1982, and this fact makes the move significant.

Below is the distribution of spot gold daily returns and a few key facts about its statistics that most speculators in this market seem to ignore, based on posts on social media and blogs. We argue that every serious investor and trader in the gold market should have knowledge of those statistics.

Disclaimer: These articles are intended for informational purposes only and should not be considered as investment advice or actionable content. We do not warrant the accuracy, completeness, fitness, or timeliness for any particular purposes of the articles. You should never treat the articles as financial advice. The author is not a registered financial advisor; therefore, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Statistical analysis in R. Data provider: Norgate Data

Fat-Tailed Move in Gold and Rare Events in Market Assets was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

1. Performance of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast, including an update of the technical analysis of S&P 500 price action. We discuss bond market dynamics and key statistics that are often missing from analysis.
3. Details of tactical ensemble and strategic allocation
4. Market dynamics discussion and conclusion: In this report, we discuss the constraints of US policy and their relation to stock market dynamics.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, September 25, 2026:

-The weekly strategies tactical ensemble (WRE) gained 1.2%. Year-to-date: +21.6%. The allocation is up 28.2% year-to-date with 1.6x leverage to match the SPY ETF volatility.
-The Price Action Lab strategic allocation (PALSA) gained 0.7%. Year-to-date: +21.7%. The allocation is up 36.9% year-to-date with 1.7x leverage to match the SPY ETF volatility.
-The SPY ETF gained 1.3%. Year-to-date: +14.0%.

For the open positions and any new signals of WRE, see Section 3.

2. Price action analysis, weekly market summary, and market forecast

Major market asset trends

Top 5 S&P 500 winners this week

Bottom 5 S&P 500 losers this week

Sector performance

Summary: For the week, bonds and commodities fell, while equities and the US dollar moved higher. Tech stocks (XLK, XLC) rallied, while rising yields put pressure on interest-sensitive utilities (XLU), real estate (XLRE), and financials (XLF). Energy (XLE) also fell due to uncertainty about a deal to end the war in the Middle East but remains the best-performing sector year-to-date.

Analysis of S&P 500 index price action

The S&P 500 index gained 1.2% for the week. Below, we update our analysis from last week.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

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Weekly Market Report: Geopolitical Constraints was originally published on Price Action Lab

Risk parity for stock and bond portfolios may offer better diversification but at the expense of a lower total return. Below are a few examples, along with a comparison to an inverse volatility portfolio. To access the full article, you must subscribe to Premium Articles.

We will consider a stock and bond portfolio with SPY and TLT ETFs only. As we have written in other articles, there are many options for the stocks-bonds portfolio, depending on the choice of ETFs for stocks and bonds.

All backtest results below are with annual rebalancing and do not include commissions and slippage. The backtest period is from 01/03/2005 to 09/21/2026. The objective is to compare performance. First, we start with the typical 60-40 portfolio using SY and TLT ETFs.

Other than an 8.5% loss in 2008, investors enjoyed solid performance until 2021, and then the shock came with the 60-40 portfolio plunging 23.4% due to both falling stocks and bonds in 2022. Note that beta for this portfolio is relatively high, at 0.46, and the correlation with the SPY ETF stands at 0.83. But how has a risk-parity portfolio performed?

Now, we have to pause. Everyone can find the formulas for calculating weights for risk parity and will realize that a “lookback period enters the chat.” The lookback period is required for calculating the standard deviations and correlation of the assets and can be a rolling fixed window or an anchored window to some original date. We did both here, using a 252-day period to calculate the standard deviations and correlations.

Note that the allocation to SPY and TLT ETFs is calculated at the start of each year and remains constant throughout the entire year to reduce transaction cost and slippage. But theoretically, we can rebalance daily, weekly, or monthly.

The risk-parity performance with a 252-day lookback period is inferior when compared to that of the standard 60-40 portfolio. In fact, the loss in 2022 is larger, 24.3%, versus 23.4% for the 60-40 portfolio, but the variation may be random. Beta is 0.25, and the correlation with the SPY ETF is at 0.49.

Let us look at an anchored window starting at the inception of the TLT ETF to calculate the standard deviations and the correlation. Below are the results.

Performance is worse for an anchored window lookback period. There is a significant drop in annualized returns and the Sharpe ratio. However, beta fell from 0.25 with a 252-day lookback to 0.17, and correlation is at 0.34, meaning that the anchored window may provide better overall diversification but at a cost, as expected.

Correlation is likely an issue, since it is dynamic and a random variable. We can try an inverse volatility version with weights that depend solely on standard deviation. Below we include the results, a comparison table, and our conclusion.

Disclaimer: These articles are intended for informational purposes only and should not be considered as investment advice or actionable content. We do not warrant the accuracy, completeness, fitness, or timeliness for any particular purposes of the articles. You should never treat the articles as financial advice. The author is not a registered financial advisor; therefore, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

Stock-Bond Portfolio: 60-40 or Risk Parity? was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

1. Performance of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast
3. Details of tactical ensemble and strategic allocation
4. Market dynamics discussion and conclusion

Section 2 includes an update of the technical analysis of S&P 500 price action.
Section 3 reviews the performance of our tactical and strategic allocations.
Section 4 discusses the rate policy and the current dynamic versus past regimes.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, September 18, 2026:

• The weekly strategies tactical ensemble (WRE) fell 0.1%. Year-to-date: +20.2%
• The Price Action Lab strategic allocation (PALSA) fell 0.1%. Year-to-date: +20.8%.
• The SPY ETF fell 0.1%. Year-to-date: +12.6%

For the open positions and any new signals of WRE, see Section 3. The WRE tactical allocation is up 26.3% year-to-date with 1.6x leverage to match the SPY ETF volatility. We also include in Section 3 the PALSA strategic allocation details and the performance when the volatility matches that of the SPY ETF, with 1.7x leverage, which is up 35.4% year-to-date.

2. Price action analysis, weekly market summary, and market forecast

Major market assets this week

Top 5 S&P 100 winners

Bottom 5 S&P 100 losers

Summary: For the week, equities and commodities fell, while bonds and the US dollar moved higher. Tech stocks gained, while financial stocks came under pressure due to the rate hike. The financial sector (XLF) and bank (KBE) ETFs fell 2.4% and 2.1%, respectively, while the tech sector (XLK) ETF gained 1%. Sandisk Corp. (SNDK) gained 9.7% (YTD +654.8%), and Advanced Micro Devices (AMD) rose 8.5% (YTD +161.4%), with the demand for computer hardware staying elevated.

Analysis of S&P 500 index price action

The S&P 500 index fell 0.1% for the week. Below, we update our analysis from last week.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

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Weekly Market Report: Dovish Hike Harbinger was originally published on Price Action Lab

Due to planned changes in the way market exchanges operate, certain price action anomalies will disappear.

One example is the overnight anomaly that we have documented and analyzed on the Price Action Lab Blog in the past 10 years. This anomaly will disappear when they enable 24-hour trading, which may happen soon.

Until 2020, all gains in the SPY ETF were due to overnight (ON) gaps (red line), and regular trading hours (RTH) had no contribution to the total return since inception (green line.) This price action anomaly was never fully explained by practitioners or academics, because in markets cause and effect are elusive notions. Most practitioners accepted this market anomaly for what it was: an anomaly.

However, notice how the strength of the anomaly started to wane after the pandemic. One explanation for the increase in the contribution of RTH to the total return of the SPY ETF was the surge in day trading during the pandemic and the rise of 0DTE options activity. However, no hypothesis can explain what occurs in the markets and especially why anomalies exist or cease to exist. Year-to-date, the relative performance of ON vs. RTH has been random.

If we claim that the performance of this overnight anomaly in the SPY ETF is undergoing mean reversion, we may not be far off, and after the implementation of 24-hour trading, we may witness its sudden termination.

Price action anomalies are not only useful for trading but also for understanding market dynamics and can even offer hints about asset allocation and risk management. This realization has been rarely discussed, and the charts that follow will surprise many people.

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

1. Performance of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast
3. Details of tactical ensemble and strategic allocation
4. Market dynamics discussion and conclusion

Section 2 includes CPI and S&P 500 price action updates.
Section 3 reviews the performance of our tactical and strategic allocations.
Section 4 discusses the next steps in geopolitics and the impact on markets.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, September 11, 2026:

• The weekly strategies tactical ensemble (WRE) fell 0.4%. Year-to-date: +20.4%
• The Price Action Lab strategic allocation (PALSA) fell 0.7%. Year-to-date: +21.0%.
• The SPY ETF dropped 0.8%. Year-to-date: +12.7%

For the open positions and any new signals of WRE, see Section 3. The WRE tactical allocation is up 26.6% year-to-date with 1.6x leverage to match the SPY ETF volatility. We also include in Section 3 the PALSA strategic allocation details and the performance when the volatility matches that of the SPY ETF, with 1.7x leverage, which is up 35.6% year-to-date.

2. Price action analysis, weekly market summary, and market forecast

Major market assets this week

Top 5 S&P 500 winners

Bottom 5 S&P 500 losers

Summary: In the holiday-shortened week, equities and bonds were down, while commodities and the US dollar moved higher. Semiconductor and computer hardware stocks gained, while pharmaceuticals and defense stocks fell.

CPI Update

“In August 2026, the Consumer Price Index (CPI) for all items rose 0.4% seasonally adjusted, up 3.4% over the prior 12 months (not seasonally adjusted).” Year-over-year, energy rose 16.3%, and food gained 2.7%. All items less than food and energy increased by 2.4%. Source: U.S. Bureau of Labor Statistics.

We update our inflation chart after each CPI release. Since 2020, the official inflation rate has been 30.4%. The effective Fed funds rate is at 3.63% (3.5%-3.75%) and about 25 basis points above the official YoY inflation rate. The current Fed Funds-CPI spread is unlikely to cause inflation to fall anywhere close to the 2% target, assuming it remains the target, especially if the conflicts in the Middle East and Europe that impact energy prices continue. In the event of escalation, inflation may rise further, but the odds of a sizeable rate hike are very low. It is important to remember that there are always two sides to a coin, with both winners and losers:

Persistent inflation at around 3.5% does not help much in inflating away the debt, but it does decrease the real value of money and slows the growth of the debt-to-GDP ratio. The winners are equity investors, who in most cases see their portfolio value increasing in real terms, and the losers are holders of long-duration government debt.

Since 2000, investors in the 60-40 portfolio with SPY and TLT ETFs have realized around a 62% return, while it took three years to recover the portfolio highs after the 2022 bear market. Investors in TLT ETF are down 27%, but SPY ETF investors have enjoyed a gain of 160.5%. Politicians mostly care about equity investors, while the bulk of the investments in bonds come from foreigners, pension funds, and insurance that match future liability streams to bond payments. Therefore, the decision to let inflation be high is the most politically palatable at this juncture. However, most investors who have experienced many different market cycles fear the second-order non-linearity effects of keeping inflation high for an extended period and at some point may also reduce equity market exposure.

Analysis of S&P 500 index price action

The S&P 500 index fell 0.8% for the week. Below, we update our analysis from last week.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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Weekly Market Report: The Next Step was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

U.S. stock and bond markets will be closed on Labor Day, Monday, September 7, 2026.

Weekly Market Report

1. Performance of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast
3. Details of tactical ensemble and strategic allocation
4. Market dynamics discussion and conclusion

Section 2 includes an update on S&P 500 price action, a trade setup, and a pair trade.
Section 3 reviews the performance of our tactical and strategic allocations.
Section 4 discusses the mechanism that has provided support to the stock market this year.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, September 4, 2026:

• The weekly strategies tactical ensemble (WRE) gained 1%. Year-to-date: +20.9%
• The Price Action Lab strategic allocation (PALSA) gained 0.6%. Year-to-date: +21.8%.
• The SPY ETF gained 0.1%. Year-to-date: +13.5%

For the open positions and any new signals of WRE, see Section 3. The WRE tactical allocation is up 27.2% year-to-date with 1.6x leverage to match the SPY ETF volatility. We also include in Section 3 the PALSA strategic allocation details and the performance when the volatility matches that of the SPY ETF, with 1.7x leverage, which is up 37% year-to-date.

2. Price action analysis, weekly market summary, and market forecast

Major market assets

Top 5 S&P 500 winners

Bottom 5 S&P 500 losers

Summary: Equities were mixed before the Labor Day holiday, bonds were down on falling odds of an interest rate cut, commodities gained on the back of higher crude prices, and the US dollar fell. Computer hardware and semiconductor stocks surged due to rising demand from AI, data centers, and consumers.

Analysis of S&P 500 index price action

The S&P 500 index gained 0.1% this week. Below, we update our analysis from last week.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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Weekly Market Report: The Mechanism was originally published on Price Action Lab

This premium report includes an update on the monthly rebalanced Market Signal strategies. A Market Signals subscription provides access to the entire report.

Positions and strategy performance: Monday, August 31, 2026

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Market Signals for September 1, 2026 was originally published on Price Action Lab

The weekly reports include tactical ensemble and strategic allocation updates, a stock market forecast, and analysis of capital markets and price action. To access the full reports, you must subscribe to Premium Articles or Weekly Premium Articles.

Weekly Market Report

1. Performance of tactical ensemble and strategic allocation
2. Price action analysis, weekly market summary, and market forecast
3. Details of tactical ensemble and strategic allocation
4. Market dynamics discussion and conclusion

Section 2 includes an update of S&P 500 price action.
Section 3 reviews the performance of our tactical and strategic allocations.
Section 4 discusses the correlation between crude oil and inflation and the latest news about the Venezuelan oil deal.

Update: We simplified the reporting of performance statistics for the tactical and strategic allocations.

1. Performance of tactical ensemble and strategic allocation

Summary

For the week ending Friday, August 28, 2026:

• The weekly strategies tactical ensemble (WRE) fell 0.4%. Year-to-date: +19.7%
• The Price Action Lab strategic allocation (PALSA) fell 0.3%. Year-to-date: +21%.
• The SPY ETF gained 0.5%. Year-to-date: +13.4%

For the open positions and any new signals of WRE, see Section 3. The WRE tactical allocation is up 25.6% year-to-date with 1.6x leverage to match the SPY ETF volatility. We also include in Section 3 the PALSA strategic allocation details and the performance when the volatility matches that of the SPY ETF, with 1.7x leverage, which is up 35.8% year-to-date.

2. Price action analysis, weekly market summary, and market forecast

We start with the list of S&P 500 stocks that are down more than 30% year-to-date.

Sixteen stocks are down more than 31% year to date. Let us look at NIKE Inc. (NKE), a stock that is also in the Dow-30:

NKE fell to a 12-year low recently. As the chart shows, NKE has been in a downtrend for 1,206 trading days and has fallen 75.8% from the all-time highs of November 2021. We believe that NKE is the next target for replacement in the Dow-30, but, like others before it, once it is removed, it may start recovering.

The recent decline looks similar to the decline in the early 1980s, when the stock fell 75% from previous highs, but the market regime and the competition are different. Furthermore, notice the long chop between 1997 and 2004, with duration of 1,742 trading days. Although some analysts think the stock is a buy with a small allocation, others could argue that this small allocation has a higher chance of being profitable in other stocks or assets in general.

Analysis of S&P 500 index price action

The S&P 500 index gained 0.5% this week. Below, we update our analysis from last week.

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Disclaimer: These articles are provided for informational purposes only and should not be considered investment advice or actionable content. We do not guarantee the articles’ accuracy, completeness, fitness, or timeliness for any specific purpose. You should never treat the articles as financial advice. The author is not a registered financial advisor; thus, before subscribing, please read our Disclaimer and Terms and Conditions.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

If you found this article interesting, you may follow this blog via RSS, email, or Twitter.

Weekly Market Report: Crude Oil and Inflation was originally published on Price Action Lab