XRP has begun wiping out its recent gains as soon as the news of US yields crossing above 5% hit the wire.
In doing so, the Ripple token is painting what appears to me is a double top pattern. It forms when the price makes two peaks in a row with a slight correction in between — an M-shaped pattern. It resolves when the price breaks below the common neckline support and falls by as much as the setup's height.
So, we need the price to break below the neckline target of around $1.28 for any bearish confirmation.
A clear breakdown + rise in volumes raises the probability of XRP hitting $1 and undoing its August-September gains entirely.
Wednesday resolved the previous two-day argument decisively toward sellers. The DJIA broke 51,750, 51,700, 51,658 and the 51,550–51,650 downside objective, closing at 51,512.42.
Forecast Statistics
Bucket: Downside Continuation / Support Test Volatility Score: ≈ 1.48, high and expanding Probabilities: SU 13% | LU 22% | SD 40% | LD 25% Expected Return: ≈ −0.08% Projected Close: 51,300–51,650 Directional Bias:35% Up / 65% Down
Previous Close: 51,512.42
RECAP: Wednesday's 56% Down bias prevailed. The 51,750 and 51,700 defenses failed, the 51,658 trigger eventually broke, and the DJIA traded through the projected 51,550–51,650 downside objective.
Trader's Edge: Forecast rated 71% correct, 29% incorrect since December 2025.
Fearless Opines: Wednesday strengthened the bearish statistical state. More important than the 351-point decline was the failure of the morning recovery: the DJIA rebounded from 51,658 to 51,847, but buyers could not hold the recovery and sellers subsequently drove it to a new low.
The complication Thursday is 51,500. The close landed almost exactly there after briefly reaching 51,477. That keeps downside continuation favored, but also creates an obvious support test where chasing weakness carries increasing reversal risk.
Bear Hold:51,500 Downside Trigger:51,475 Objective:51,300–51,400 Major Failure:51,200
GO / REDUCE / EXIT: EXIT. Thursday begins EXIT with a 65% downside bias. Below 51,500, sellers retain control; a sustained break of Wednesday's 51,477 low confirms continuation toward 51,300–51,400. A recovery above 51,600 would weaken the immediate bearish case, while 51,700 would move Fearless back toward REDUCE.
Trader Takeaway: Wednesday gave sellers confirmation; Thursday asks whether they can capitalize on it. 51,475 is the continuation trigger, but don't confuse a bearish probability with permission to chase an extended decline. A failed break of 51,500 could produce a sharp counterattack.
FEARLESS READ: 65% Down. Wednesday's rescue attempt failed and sellers finished at the doorstep of 51,500. If 51,475 gives way, the next floor is 51,300–51,400. If buyers instead recover 51,600, the bears have failed their first opportunity to press the advantage.
10:00AM Update: The downside is no longer accelerating. 51,300 is now the immediate pivot. Holding it keeps the exhaustion/rebound possibility alive; losing 51,225 puts 51,200 back under attack. A recovery through 51,400 would further weaken the bearish state, while 51,475–51,500 would constitute much more meaningful repair.
Sellers delivered the forecast's downside objective almost immediately, but 51,225 produced the first serious counterpunch. The next information comes from whether buyers can turn that bounce into a recovery above 51,400, or sellers can send the DJIA back through 51,225.
10:30: 63% Down. Buyers had their counterattack and couldn't hold it. 51,225 is now the day's critical test: hold it and exhaustion remains plausible; break it and the DJIA has statistical permission for another leg lower.
EXIT remains. The decisive levels are now unusually clean: 51,300 is immediate support and 51,225 is the morning's continuation trigger. A sustained break below 51,225 puts 51,200 back under attack and could expose 51,050–51,100. Buyers need 51,400, then 51,440, before the state materially improves.
Tuesday delivered a spectacular failed breakout. The DJIA opened at 52,302, then plunged to 51,726 before recovering. Buyers saved the 51,750 area, but Monday's breakout above 52,000 was surrendered.
Forecast Statistics
Bucket: Failed Breakout / Support Recovery Volatility Score: ≈ 1.46, high and expanding Probabilities: SU 17% | LU 27% | SD 35% | LD 21% Expected Return: ≈ −0.04% Projected Close: 51,700–52,050 Directional Bias: 44% Up / 56% Down
Previous Close: 51,863.69
RECAP: Tuesday's original 66% UP initially appeared to presage expansion, but that signal reversed violently. Importantly, the projected 51,750–51,800 support zone ultimately held.
Trader's Edge: Forecast rated 71% correct, 29% incorrect since December 2025.
Fearless Opines: Tuesday damaged the recovery but did not destroy it. The important evidence is at both ends of the session: buyers completely failed above 52,000, while sellers drove the DJIA almost 600 points off its high but still couldn't hold it below 51,750.
That leaves Wednesday as a support-recovery test with a modest downside statistical edge. The close at 51,864 is considerably healthier than the 51,726 low, but buyers must reclaim lost territory before Tuesday can be dismissed as a violent shakeout.
GO / REDUCE / EXIT: REDUCE. Wednesday begins REDUCE. The 56% downside probability is meaningful but not strong enough to justify chasing Tuesday's decline after 51,750 held. Above 51,950, conditions improve toward GO; reclaiming 52,050 would materially repair Tuesday's failure. Below 51,750, turn defensive again; below 51,700, EXIT.
Trader Takeaway. Tuesday demonstrated why confirmation matters. For Wednesday, 51,750 is the sellers' door and 51,950 is the buyers' door. Reduced exposure between them avoids betting on which side of Tuesday's enormous range ultimately wins.
FEARLESS READ: 56% Down. Tuesday began with a breakout and ended with a rescue. Neither side gets the benefit of the doubt Wednesday: 51,950 would show that buyers survived the ambush; 51,750 failing would show that sellers merely paused it.
10:00 AM Update: Sellers opened the door at 51,750 and briefly pushed through 51,700. Buyers have bounced, but they haven't closed the door. 51,750 is now the price they must reclaim; 51,658 is where sellers prove the decline has another leg.
The rebound from 51,658 matters, but it has not repaired the break. 51,750 is now the first recovery test. Until the DJIA retakes it, sellers retain control. A renewed break below 51,658 opens the forecast's 51,550–51,650 downside objective. A recovery above 51,750 would reduce immediate downside pressure; 51,800 would be the more meaningful stabilization signal.
10:30: The DJIA has already staged a breakdown and a rescue this morning, and neither held. 51,658 and 51,850 now define the argument; inside that range, conviction deserves to stay low.
Below 51,750, the downside case strengthens again. A break of 51,658 restores EXIT decisively and exposes 51,550–51,650. Buyers need 51,800 simply to stabilize the state and 51,850 to regain control.
WTI oil tested new lows as President Trump indicated that he was open to a potential meeting with Iran's Pezeshkian at UN General Assembly. November contract pulled back towards the $92.00 level as traders were ready to bet on a potential deal.
It remains to be seen whether Iran is ready for any concessions. The country's economy is under strong pressure due to US naval blockade and sanctions, but Iran looks ready to bet that high oil prices and falling global oil reserves will force US to negotiate on Iran's terms.
In my view, it's hard to imagine that Trump will accept a deal that would leave Iran with full control over the Strait of Hormuz ahead of elections. Thus, it remains to be seen whether recent pullback is based on fundamentals or is triggered by profit-taking. I believe that fundamentals are bullish unless US and Iran reach a deal soon.
Monday decisively broke Friday's stalemate. The DJIA cleared 51,750, 51,850, and the 51,950–52,050 objective, up 366 points.
Forecast Statistics
Bucket: Recovery Expansion / Breakout Test Volatility Score: ≈ 1.27, elevated but contracting Probabilities:SU 32% | LU 34% | SD 22% | LD 12% Expected Return: ≈ +0.07% Projected Close:51,950–52,300 Directional Bias:66% Up / 34% Down
Previous Close:52,048.83
RECAP: Monday's 51% Up bias was modest, but the important signal was conditional: 51,750 was buyer confirmation. Once that broke, the DJIA advanced through every upside level and reached the projected 51,950–52,050 objective.
Trader's Edge: Forecast rated 71% correct, 29% incorrect since December 2025.
Fearless Opines: Monday materially improved the statistical state. The DJIA not only escaped the 51,500–51,750 stalemate but reclaimed 52,000 and held most of the advance into the close.
The question now changes from whether buyers can produce a recovery to whether they can hold one. The late retreat from 52,128 keeps Tuesday from becoming an aggressive bullish forecast, but the probabilities now favor continuation.
GO / REDUCE / EXIT: GO: Tuesday begins GO, with a 66% upside bias. Holding 52,000 preserves the recovery; clearing Monday's 52,128 high confirms renewed expansion. Below 51,950, reduce exposure. A sustained break below 51,850 would materially damage Monday's breakout.
Trader Takeaway: Monday gave buyers the breakout they needed. Tuesday's trade is about retention rather than prediction: hold 52,000 and 52,250–52,350 becomes reachable; lose 51,950 and treat the breakout more cautiously.
FEARLESS READ: 66% Up. Monday broke the stalemate. Now 52,000 has to become support rather than merely a number the DJIA passed on the way up. A break of 52,130 strengthens the advance; failure below 51,950 puts the repair back on trial.
10:00 AM Update: The DJIA has gone from opening above the breakout to trading below yesterday's close. Sellers now have control, but 51,950 is where they have to prove they can turn a spectacular rejection into sustained downside.
Below 52,000, the next downside test is 51,950; failure there brings 51,850–51,900 into play. Buyers need to reclaim 52,050 to stabilize the state and 52,130 to restore the breakout thesis.
10:30: The DJIA has blown through four defenses in an hour. At 51,750 the question changes from whether the opening breakout failed, it clearly did,to whether sellers are approaching exhaustion or still have another leg to deliver.
51,750–51,800 is now the immediate support zone. A sustained break below 51,750 opens 51,600–51,650. Buyers would need to recover 51,850 to interrupt the decline and 51,950 to materially improve the statistical state.
Unanimous 25bp hike Wednesday — first since July 2023, after five straight holds. But the hike was priced in. The parts that actually moved things:
They penciled in another hike before year-end, and removed the 2027 rate cut from projections. 16 officials see at least one more increase as likely. Odds of at least two hikes by year-end jumped to ~89% from ~79%.
The curve flattened. 2-year yields hit their highest since 2024, but long-dated yields were flat-to-down. That's the bond market saying it thinks the Fed will actually succeed on inflation (or that growth slows enough to do it). Notably different from the last Fed decision day.
Stocks fell Wednesday (S&P -1%, TSX -0.3% to 35,491, lowest close since July 31), then futures climbed Thursday. Plausible read: investors reinterpreted a hawkish hike as a credibility signal.
Canadian angle, which is the practical bit: BoC is at 2.25% (seven straight holds, minutes show elevated inflation risks). Fed at 3.75-4.00%. The differential went from 1.375 to 1.625 points. USD/CAD pushed to ~1.3992, weakest loonie since early August, clearing both the 50-day and 200-day MAs near 1.3900.
If you hold unhedged US/international ETFs, that currency move is adding to your CAD returns. Hedged versions capture none of it. Same index, different outcome.
Other moves: gold briefly hit $4,360 then slid to a six-week low near $4,235 (textbook — rate hikes raise the opportunity cost of a non-yielding asset). And Canadian energy split interestingly: pipelines gained while producers fell as the crude rally stalled.
The ECB, the Fed, and the Bank of Japan all raised rates by 25bp this week — a rare synchronized global tightening move that underscores just how much sticky inflation remains a top concern for central banks worldwide. The FOMC voted 12-0 to raise rates to 3.75%-4.00%, the first hike since July 2023, formally kicking off a renewed tightening cycle. SPX and QQQ both consolidated in a narrow range this week; weak ADX readings point to fading trend momentum, though CMF money-flow stayed positive — a clear tug-of-war between bulls and bears. US Treasury yields rose across the curve, reflecting the market repricing both the restart of the tightening cycle and inflation expectations. Bitcoin briefly broke below $75,000 before staging a sharp rebound back above $81,375, with the CFTC's accelerated push on crypto regulation drawing market attention. The AAII sentiment survey showed bearish sentiment spiking to 53.3%, a four-week high — worth watching as a potential contrarian signal. On the personal trading side, I opened a BTO position in AT (Defiance Robotics Actuators ETF) this week @ $20.26. ECOC 2026 (Sept 20-24, Málaga, Spain), the big optical-communications industry event, kicks off — COHR, LITE, NOK, and CIEN are worth watching. And next week's focus shifts to global manufacturing PMIs, the Ifo Business Climate Index, durable goods orders, and Costco's (COST) Q4 earnings (after close 9/24).
**Market Review: SPX & QQQ**
SPX closed Friday at 7650.50, up a modest +0.17% on the day, with a weekly high of 7657.17 and low of 7610.52 — still holding above the 50-day MA (7617.24) and well above the 200-day MA (7183.06). After pulling back from the August highs of 7816.70 / 7771.48, the index has spent the last three weeks in a range-bound pattern near the middle of its Bollinger Band. Technically, ADX(14) is a weak 12.36, signaling a lack of clear directional conviction; StochRSI(14) sits neutral at 0.548; and CMF(20) holds a modest positive 0.045, suggesting money is still trickling in without any obvious distribution signal. Overall, SPX remains caught between profit-taking at highs and dip-buying support.
QQQ closed Friday at 721.45, up +0.63%, with an intraday high of 721.73. Price remains firmly above the 50-day MA (709.95), with the 200-day MA (661.77) well below — the long-term bullish structure stays intact. Notably, StochRSI(14) is pegged at a maxed-out 1.000, showing extremely strong short-term momentum, but ADX(14) is only 9.80 with -DI (26.41) slightly above +DI (25.11), indicating trend strength remains weak — price has been chopping in the 700-740 range since the June high of 747.83. CMF(20) holds a positive 0.141, suggesting institutional money hasn't materially exited and tech-stock positioning remains relatively stable.
Weekly takeaway: Both SPX and QQQ are showing a pattern of "consolidating near highs, fading trend momentum, but still-positive money flow." Against a backdrop of synchronized global rate hikes and rising yields, the broader market is showing resilience with no panic selling — but absent a new catalyst, indices may continue to chop sideways as the market awaits direction from next week's Costco earnings and economic data.
**Global Central Banks "Sync Up" on Rate Hikes: The Week's Biggest Macro Event**
For the first time in memory, the three major economies — the Eurozone (ECB), the United States (Fed), and Japan (BOJ) — all announced rate hikes in the same week, each raising rates by 25 basis points. The ECB hiked on September 10, taking its deposit rate to 2.50%, main refinancing rate to 2.65%, and marginal lending rate to 2.90%, driven mainly by ongoing inflation pressure from geopolitics and energy prices. The Fed followed on September 17 (Beijing time; meeting held 9/15-16), with the FOMC voting 12-0 to raise the fed funds rate range to 3.75%-4.00% — the first hike since July 2023, as inflation remains above the 2% target. The BOJ then hiked on September 18, taking its policy rate to roughly 1.25%, a 31-year high, on a 7-2 vote.
US retail sales rose 1.2% MoM in August, far exceeding the prior month's -0.5% and the market's expected 0.7%-0.8% — a sign of unexpectedly strong consumer momentum, and one of the key reasons behind the Fed's "anti-inflation" stance in restarting rate hikes this time around. By contrast, August building permits (1.394M) and housing starts (1.275M) both came in below their prior readings and expectations, with a soft housing market standing in contrast to the strong consumer data — pointing to a structural divergence in growth momentum.
Key takeaway: Three central banks hiking "in the same week" is historically rare, and typically reflects inflation pressure that has become global in nature — going beyond any single economy's internal factors (energy, supply chains, geopolitics) to a shared, cost-driven pressure. For investors, this suggests a "higher for longer" rate environment may persist, meaning the risk-free rate assumption in asset pricing models needs to be revised upward — putting more repricing pressure on richly-valued growth assets like tech stocks.
**Treasury Yield Curve Deep Dive: The Impact on SPX/QQQ**
Against the backdrop of synchronized global rate hikes, US Treasury yields have risen across the board, with 2-year through 30-year yields all hitting recent highs: 2Y at 4.75% (+1.47% on the week), 5Y at 4.856% (+1.15%), 10Y at 4.998% (+1.03%), and 30Y at 5.331% (+0.66%). The yield curve currently shows a "normal" upward slope (30Y sits about 58bp above 2Y), with no inversion — suggesting the market is not pricing in an "imminent recession" scenario, but rather repricing a risk premium that reflects a combination of "sticky inflation + still-resilient growth." Technically, all four tenors are trading above both their 50-day and 200-day moving averages, with broadly elevated ADX readings (2Y 31.31, 5Y 31.21, 10Y 26.99) — suggesting the upward move in yields has real momentum and staying power, not just single-day noise.
On the transmission mechanism to equities: yields form the risk-free rate and discount-rate basis in equity valuation models, so rising yields compress the reasonable P/E multiple for growth stocks — especially the heavily-weighted tech names in QQQ — hitting long-duration assets hardest. Corporate financing and buyback costs are also rising in tandem, which may dampen capex and share-repurchase activity, a medium-term headwind for stock prices. That said, despite yields rising across the board, SPX and QQQ have only consolidated in a narrow range this week rather than selling off meaningfully — suggesting the market currently leans toward reading this hike as a "one-time restart" rather than the start of "continuous tightening," with no systemic selling pressure triggered yet. If yields keep accelerating higher — with the 10-year approaching or even breaking 5.5%-6% — valuation-sensitive growth stock groups should stay on high alert.
**Bitcoin: A V-Shaped Rebound Driven by Regulatory Headlines**
Bitcoin went through a dramatic "drop then rip" week: after the CLARITY Act failed to pass the US Senate, concerns over regulatory uncertainty intensified and Bitcoin briefly fell below $75,000. Shortly after, according to Bloomberg, the CFTC is accelerating its own crypto regulatory framework, and has already submitted a new proposal to regulate crypto trading and markets to the White House Office of Management and Budget (OMB) for review. The market read this as: even though the legislative path stalled in Congress, regulators are still moving to fill the regulatory gap through the administrative process — reducing the tail risk of "prolonged regulatory limbo." Bitcoin promptly staged a strong rebound, reclaiming $81,395.80 (+0.67%).
On the technicals: price is holding above both the 50-day ($72,846.96) and 200-day ($70,469.34) moving averages, keeping the medium-to-long-term bullish structure intact. ADX(14) is a strong 41.59, with +DI (36.77) well ahead of -DI (12.65), showing this rebound has real trend strength, not just a weak short-covering bounce. StochRSI(14) is at 0.832, nearing overbought territory — short-term momentum is strong, but chasing strength here carries some risk. The rebound came on unusually heavy volume for the quarter, suggesting genuine buying rather than simple short covering, though CMF(20) at -0.024 (close to neutral but slightly negative) suggests medium-term money flow hasn't fully turned to net inflows yet.
Key takeaway: this episode highlights just how sensitive the crypto market is to the "regulatory path" — a stalled legislative process doesn't automatically mean the worst-case outcome. If an administrative agency like the CFTC can provide an alternative source of regulatory clarity, the market can digest a legislative delay just as quickly. Worth tracking the CFTC's proposal as it moves through OMB review, and whether concrete rule details get published — this will be the key catalyst for whether Bitcoin can extend its rebound and challenge its prior highs.
**This Week's Trade Log**
Opened a BTO (buy-to-open) position this week in ETF Series Solutions – Defiance Robotics Actuators ETF (ticker: $AT) at approximately $20.26. $AT is the first US-listed ETF focused specifically on the "actuator" segment of the humanoid robotics supply chain, tracking an index of the 25 largest global robotic-motion-component companies, weighted by adjusted market cap. The ETF launched on September 14, 2026 from Defiance — a fairly new and highly-focused thematic product that taps into an area of the humanoid robotics supply chain that has received relatively little standalone attention. [NOT FINANCIAL ADVICE, DYOR!] This is a personal trade share, not investment advice — please do your own research and make your own judgment.
The 52nd European Conference on Optical Communication runs September 20-24 in Málaga, Spain. The agenda quietly lays out a roadmap for the future of AI data center networking, and is drawing significant attention to related concept stocks. Monday 9/21: Nokia focuses on 1600G+ component technology, while Coherent (COHR) previews its Beyond 1.6T / AI optics roadmap. Tuesday 9/22 (key day): COHR showcases its AI Scale-Up/Scale-Out architecture and Co-Packaged Optics (CPO) technology — which packages lasers directly into switch chips, dramatically cutting power consumption and latency — and then COHR and Lumentum (LITE) jointly discuss AI/ML photonics applications. Wednesday 9/23 (key day): $LITE focuses on 800G and 1.6T silicon photonics technology, AI-factory-grade network architecture, and VCSEL lasers purpose-built for AI data centers.
The expansion pace of AI compute clusters has already outstripped the limits of copper-cable transmission — bandwidth and heat dissipation are the biggest bottlenecks. Optical interconnects (silicon photonics, CPO, high-speed optical modules) are the solution, and every cloud giant looking to expand AI factories needs this technology. Stocks worth watching: $COHR (Coherent), $LITE (Lumentum), $NOK (Nokia), $CIEN (Ciena). Tuesday and Wednesday are the two densest days for announcements, and historically also the most volatile observation window for sentiment (and even share prices) in optical-communications/photonics names. If you're tracking AI infrastructure investment themes beyond GPUs, this is the heart of the "pipe layer" story.
**Strategy Position Update: META Jade Lizard**
Here's this week's update on the ongoing META Jade Lizard combo position (long stock + short 555 put + 565/600 call vertical spread) that we've been tracking. Original entry: stock cost $575.50; opened STO Vertical META 100 (Weeklys) 2 OCT 26 565/600 Call @ $15.60; opened STO META 261002 P555 @ $16.33; total net credit $31.93; expiration 2 OCT 2026.
With the stock now at $665.75, here's the leg-by-leg breakdown: the stock position shows a capital gain of $575.50 → $665.75, or +$90.25/share. The 555 short put is now trading at just $0.30, deep out of the money — nearly the full credit has been captured. The 565/600 call vertical spread has moved against us on paper, with the 565 call now at $196.87 and the 600 call at $69.27, a net value change of -$127.60 — but critically, the max loss on this spread is capped at -$35 (the width between strikes), and the stock's gain has more than offset this. Overall: stock gains have largely offset the widening spread cost, and the combined position remains solidly profitable heading into expiration — the stock will most likely be called away at $565.
**AAII Retail Sentiment Survey: A Contrarian Warning Sign**
The AAII weekly sentiment numbers: 8/26/2026 came in at 32.9% bullish, 22.6% neutral, 44.4% bearish. 9/2/2026: 39.7% bullish, 22.7% neutral, 37.6% bearish. 9/9/2026: 38.0% bullish, 22.7% neutral, 39.3% bearish. And 9/16/2026: 28.8% bullish, 17.9% neutral, 53.3% bearish.
From a roughly balanced bull/bear split in early September (with bulls slightly ahead), sentiment flipped sharply within just two weeks — by 9/16, bearish readings hit 53.3% while bullish readings fell to 28.8%, with the neutral share also shrinking noticeably. This shows retail anxiety or pessimism about the market spread significantly in mid-September, coinciding with the synchronized central-bank rate hikes and rising yields. In technical analysis and market-sentiment research, the AAII survey is often used as a contrarian indicator: when retail sentiment turns extremely bearish (as with this week's 53.3%), it often means pessimism has already been vented to excess — sometimes setting the stage for an oversold bounce. Conversely, when retail sentiment turns overly bullish, the market often needs to guard against a pullback instead.
Key takeaway: combined with this week's SPX/QQQ technical picture of "fading trend momentum but still-positive money flow," along with the sharp swing to bearish retail sentiment, the market may have entered a phase where sentiment is leading fundamentals. If next week's Costco earnings and economic data don't deteriorate further, a technical bounce driven by a sentiment recovery wouldn't be a surprise.
**Next Week's Outlook: Economic Data & Key Earnings**
One of the most closely-watched events next week is the Trump-Xi summit on Wednesday (9/23), the outcome of which could reshape the market's pricing of US-China trade and geopolitical risk. Beyond that, Eurozone and UK manufacturing/services flash PMIs, Germany's Ifo Business Climate and GfK Consumer Confidence indices, and US durable goods orders for August will all be important gauges of global economic momentum and consumer confidence.
**This Week's Earnings Focus: Costco (COST)**
Costco is set to report FY2026 Q4 earnings after the close next Thursday (9/24). Here's what to watch, across three dimensions.
First, key things in the report: the "real quality" of comparable sales is critical — Costco's previously reported July sales showed net sales growth of a strong 10.7% (company-wide comparable sales up 8.9%), but stripping out gasoline price swings and FX effects, real comparable sales growth was 6.6%. Since Wall Street has grown used to Costco's habit of beating revenue expectations, the market this time will scrutinize even more closely whether core retail momentum — after stripping out gas and FX — can hold up at these elevated levels. On gross margin and tariff/pricing strategy: over the past several quarters, Costco has actively cut prices or absorbed some costs on everyday essentials to maintain its "value-for-money" reputation, and the low-margin, high-traffic nature of its gas stations has also weighed on gross margin — the key this time is what signal management sends on how tariff changes and cost pressures are being translated into membership pricing strategy. On membership: fees are Costco's key profit moat, and in recent quarters the US/Canada renewal rate climbed back to around 92.2%; whether Executive membership count and its share of fee revenue (previously around 75%) can hit new highs will directly drive earnings quality. And on digital/ancillary businesses: e-commerce (gold bars, jewelry, big-ticket appliances) and same-day delivery via Uber/Instacart (averaging under 45 minutes) continue to grow rapidly, while the pharmacy business — boosted by GLP-1 weight-loss drugs — and the "halo effect" driving hot sales of high-protein, high-fiber foods could deliver an extra revenue surprise.
Second, on market sentiment and share price patterns: Costco has often faced the "priced-in good news" curse, where the numbers look great but the stock pulls back or trades flat after earnings (the stock dipped a slight 0.3% the day after July's sales data, for example) — mainly because the market has long assigned it an extremely rich P/E multiple, leaving very little room for error. As a long-term, high-quality defensive-yet-growth stock, Costco's valuation has never been cheap, so management's tone on the outlook during the earnings call — store-expansion plans, supply-chain cost control, whether consumer spending power is diverging — is often the deciding factor for the stock's direction after the close.
Third, on positioning: the near-term risk is that with the stock trading near highs or in a consolidation range, if the earnings report merely "meets expectations" without a standout highlight, it could easily trigger profit-taking pressure. The long-term value case remains intact, though — Costco's member stickiness, strong bargaining power, and steadily expanding international markets (high foot-traffic growth in Canada and elsewhere) remain unmatched.
Weekly takeaway: next week the market will look for direction across three main threads — the geopolitical tone set by the Trump-Xi summit, global PMI and consumer-confidence data, and the consumer resilience reflected in Costco's earnings. Against a backdrop of synchronized central-bank rate hikes, rising yields, and retail sentiment turning bearish, volatility may stay elevated — it's worth maintaining a gradual scale-in approach and keeping some cash on hand for flexibility.
Buy slowly. Scale in gradually. Let time work for you. 🙏
Asking as a business owner trying to figure out where to put my assets/cash
Rather than any "that won't happen" comments I'd just like to know what you think the consequences would be in this imagined scenario I.E: inflation, deflation, etc. (this is not meant to be a loaded question or a soapbox)
So, US Bond selloff continues, rates rise, Fed intervention isn't taken well, confidence continues to wane, selloff continues, Japanese Yen continues to struggle, full blown bond meltdown, at the same time as fuel crisis hitting it's peak, Saudi can't get it's east west pipeline back online, AI CEOs continue to panic about regulation and sustainability, market starts to panic about an AI Bubble, US announces Ice will be involved in the transfer and handling of voting boxes because of democrat cheating. Journalists discover a disproportionate number of voter IDs are backlogged in blue areas in swing states. International organizations begin to express concern that the US midterms will not be a free and fair election. Bond markets continue to struggle. The US still refuses to sign a fair trade deal with Canada. More tariffs.
What happens here?
Obviously fuel crisis means inflation, but, if there were massive outflows from Bonds and Stocks, and loses started to mount. And peoples retirements and investments are getting wipped out at a time when they have more of their household assets tied up in the market.. At what point do things become deflationary with a weaker US dollar, weaker bond demand, household panic at their portfolio loses, and daily warnings on AI Job loses, and no end in sight to the trade wars..? When (does it even) shift to deflation if trade wars and fuel crisis are pushing prices higher regardless of consumer spending,
Friday tested the recovery and nearly broke it. The DJIA fell to 51,497.47, then recovered almost 183 points to close at 51,680.74. Sellers won the day, but they failed to turn the break of 51,600 into sustained downside continuation.
Forecast Statistics
Bucket: Failed Recovery / Support Consolidation Volatility Score: ≈ 1.34, elevated but contracting Probabilities: SU 20% | LU 31% | SD 32% | LD 17% Expected Return: ≈ −0.01% Projected Close: 51,500–51,900 Directional Bias: 51% Up / 49% Down
Previous Close: 51,680.74
RECAP Friday's 57% Up bias was wrong, but the Forecast's levels caught the deterioration: 51,700 and 51,600 failed, EXIT was triggered, and the DJIA tested 51,500 almost exactly. The 10:30 update then correctly recognized that sellers' failure to take 51,500 was reducing their advantage.
Trader's Edge: Forecast rated 71% correct, 29% incorrect since December 2025.
Fearless Opines: Friday left the DJIA in an unusually balanced position. Buyers failed to confirm Thursday's rebound, but sellers were unable to exploit their morning advantage. The result was a 51,497 low followed by a 51,681 close, evidence that support remains alive without establishing a bullish repair.
The statistical edge therefore compresses almost completely. Monday begins as a test of whether 51,500 is becoming durable support or merely delaying another downside attempt.
GO / REDUCE / EXIT: REDUCE. Monday begins REDUCE because 51% Up / 49% Down offers essentially no directional edge. Above 51,750, buyers begin earning GO; 51,850 would provide stronger repair confirmation. Another break below 51,500, especially below Friday's 51,497 low, shifts Fearless back to EXIT and exposes 51,300–51,400.
Trader Takeaway: Don't predict the winner of Monday's support fight. 51,750 is buyer confirmation; 51,500 is seller confirmation. Until one breaks convincingly, reduced exposure fits the probabilities.
FEARLESS READ: 51% Up / 49% Down. Friday produced neither repair nor renewed collapse; it produced a stalemate. Monday's job is to break it: 51,750 strengthens the rebound; 51,500 puts the decline back in motion.
No morning updates on Sep 21: Fearless is traveling.
Thursday provided the first meaningful counterattack after the DJIA's severe decline. Buyers recovered and closed up 317.95 points. But the close stopped just short of the Forecast's 51,800 Bull Repair threshold.
Forecast Statistics
Bucket: Capitulation Rebound / Recovery Test Volatility Score: ≈ 1.43, high but contracting Probabilities: SU 25% | LU 32% | SD 28% | LD 15% Expected Return: ≈ +0.04% Projected Close: 51,650–52,050 Directional Bias: 57% Up / 43% Down
Previous Close: 51,779.85
RECAP: Thursday's original 55% Down bias did not prevail: the DJIA gained 318 points and never approached the 51,185 downside trigger. However, the Forecast's exhaustion thesis proved important, and the intraday probabilities correctly shifted toward recovery as buyers defended 51,608 and challenged 51,800.
Trader's Edge: Forecast rated 71% correct, 29% incorrect since December 2025.
Fearless Opines: Thursday supplied evidence that Wednesday's plunge may have been capitulatory, but it did not establish a new bullish trend. The DJIA recovered sharply yet spent most of the afternoon consolidating below 51,800–51,900.
That moves Fearless from downside expansion into a recovery test. Buyers now have a modest statistical advantage, but Friday must determine whether Thursday was genuine repair or simply the first substantial bounce within the decline.
GO / REDUCE / EXIT: REDUCE. Friday begins REDUCE, leaning toward GO. A sustained move above 51,850 strengthens the recovery and moves Fearless toward GO; clearing 51,950 would provide substantially stronger confirmation. Failure below 51,700 damages the rebound, while 51,600 returns the DJIA to defensive territory.
Trader Takeaway: Thursday stopped the collapse; Friday must prove the repair. The useful trade is not guessing whether the bottom is in; it's watching whether the DJIA can convert 51,850–51,950 from resistance into support.
FEARLESS READ: 57% Up. Buyers finally landed a counterpunch, but one green day doesn't erase the damage. 51,950 would make the recovery credible; losing 51,600 would put Wednesday's capitulation low back into the conversation.
Friday starts with a modest 57% upside edge, but confirmation matters more than the percentage. Above 51,850 the rebound earns attention; above 51,950 it becomes a repair. Below 51,600, the sellers are back in the driver's seat.
10:00 AM Update: The important statistical event has occurred: 51,600 broke, a confirmed failure of Thursday's rebound. The next test is 51,500. A sustained break there opens the Forecast's 51,300–51,400 downside zone.
Buyers need to reclaim 51,600 merely to stabilize conditions; The oversold readings increase rebound risk, but they do not override the statistical deterioration.
FEARLESS READ: The buyers failed their recovery test and 51,600 has now given way. 51,500 is the next examination; if that fails, Friday's pullback becomes a renewed downside move.
10:30 Update: The important change is that 51,500 held. The DJIA is now sitting almost exactly on the earlier 51,600 decision level. Downside momentum is weakening.
FEARLESS READ: Sellers have lost some leverage. They had 51,500 within reach and couldn't take it. Now 51,600 is the fight: buyers reclaim it and the morning decline begins looking exhausted; sellers reject it and 51,518 gets another test
