September 28, 2026
Preview from my weekly report*
A
broad-based downside correction confirmed. The
U.S. stock market’s rotational correction rolls on, with a majority of the
S&P 500 stocks now below their 200-day SMAs, suggesting a broad-based
downside correction. The market turned corrective and choppy since June in
reaction to the now familiar fears of war, rising inflation, rising interest
rates, rising debt levels, and rising overinvestment in technology. The war has
spiked the price of oil and other commodities, aggravating inflation hawks on
the Federal Reserve Board. Politically, enemies of the U.S. might try to make everything
look even worse before the midterm election on 11/3/2026. For investors willing
to look beyond the next few weeks, however, staying focused on the strongest
stocks still makes sense.
Technology ETF (XLK) rose to its highest price level since June,
confirming strong upside momentum. XLK remains above its 50-day SMA and 200-day
SMA, both of which are rising, and the main trend is bullish as long as the
50-day SMA stays above the 200-day SMA. Look for resistance near 198. Support
sits around the recent lows above 178, 166, and 156-160. Fundamentally, there
is no evidence of a slowdown in the strong demand for technology.
Overinvestment concerns that have been persistent since the June peaks appear to
be easing following extremely strong earnings and forward guidance. Energy Sector SPDR (XLE) rose to an all-time high on
9/10/2026, confirming bullish momentum. Longer-term, the rising 50-day SMA
remains bullish as long as it holds above the rising 200-day SMA. Look for
resistance around 66 and support above 61, 57, and 52. Short-term performance
heavily depends on changing geopolitical developments involving Iran, which
offer considerable risk of higher oil prices in the weeks ahead of the mid-term
election on 11/3/2026.
Our Colby INNOVATION
Portfolio has delivered a 34.29% total return this year, more than 2.4 times
the performance of the NASDAQ Composite (13.90%) and the S&P 500® (13.14%).
A short-term, profit-taking, corrective wave in June and July reversed in
August on the back of outstanding earnings reports and extremely strong
earnings guidance for the foreseeable future. Demand for innovative technology
is expected to exceed supply for years ahead. The most dynamic INNOVATION
stocks appear well positioned to continue their bullish major trends.
All of our clients have made positive returns over the past 15 years while taking substantially less risk. We offer complete transparency, anytime access to your funds, and low fees. Your assets are secure, insured, and you keep control over your money. For details email info@colbyassetmanagement.com or call 646-652-6879.
This Technical Analysis is made possible by use of MetaStock software. Try it at no risk for 30 days. (Check out the new and improved version 19.) Click this link to save 7%–9% on MetaStock® software.
