Peter Reznicek

Bull markets will often give newbies the hot hand.

Thinking they're magic, they'll ramp up risk, reap big losses, and take on more risk just to break even.

End result: They blow up.

The major indexes remain divergent. Only the Nasdaq closed higher today, continuing to consolidate constructively just below its prior all-time highs. The S&P 500 slipped slightly and closed below its key short-term moving averages, but found support at the confluence of its 50-day SMA and rising bottoms line just below. The Russell 2000 made a lower low, while the Dow held just above its prior swing low.

As discussed in the last report, this type of divergence between large- and small-cap indexes has occurred many times before. Sometimes small caps eventually catch up and confirm strength in the larger-cap indexes; other times, weakness in small caps eventually pulls the larger-cap indexes lower. The divergence itself doesn’t tell us which outcome is coming, so the price action from here remains important.

Breadth also continued to deteriorate, with 426 new lows versus just 84 new highs this afternoon. This has been an issue for roughly a month and helps explain why the Nasdaq has held up better than the small caps. The index’s largest-weighted names—including NVDA, AAPL, MSFT, MU, and AMD—have also been among its strongest performers, providing significant support.

On the positive side, the health and breadth of the market’s traditional high-growth leadership continued to improve, supported by a healthy rotational process. That remains encouraging, even as the broader market continues to show signs of weakness beneath the surface.

I’m still carrying modest exposure at 25%, with tight, logical sell stops. If the market ultimately rolls over, I should be able to walk away with little to no damage. However, with the continued bifurcation between large- and small-cap indexes and several weeks of new lows outnumbering new highs, it’s difficult to consider the deck hot.

For now, I’ll keep my maximum exposure at 30% until these issues resolve. If the major indexes resolve higher, leadership continues to broaden, and I continue making progress, I’ll add exposure. If not, I’m comfortable remaining lightly invested or in cash. Stay patient, let the market earn your exposure, and wait for the setups worth taking.

Our "edge." We Key on LEADERS breaking out of simple bases with volume confirmation. And, we RIDE TRENDS. Best way to make bigger money. With less hassle!

From IBD: Advanced Micro Devices (AMD) earned positive marks from Wall Street analysts for its planned $8.2 billion acquisition of artificial intelligence model builder World Labs. $AMD stock rose on Tuesday. *Yes, we own AMD from lower.

Chart patterns REPEAT! OVER AND OVER. We KNOW what to Key on! $SNDK from January of this year. MONSTER RUN. $SNDK was owned.

We TRAIN OUR EYES on what's important in the charts. Note the marked bar? Good bar or bad bar? And then, knowing that tells WHAT we need to see in order to buy NVDA? We KNOW what to Key on!

https://vimeo.com/1231658292?fl=pl&fe=sh

Peter's Preamarket Perspective | Wednesday, September 30, 2026 This is "Peter's Preamarket Perspective | Wednesday, September 30, 2026" by ShadowTrader on Vimeo, the home for high quality videos and the people who love them.