Below are highlights from the NDW Morning Update Video for the morning of 10/16. Access the video on the NDW Morning Update Video page. 

• Markets were mostly higher on Thursdays, with the S&P 500 rising around a third of a percent. Meanwhile, breadth was strongly positive on the day, with the S&P 500 Equal Weight Index (SPXEWI) rising 1.36%.
• Crude oil continues to push higher, rising another 3% on the day. On the more consistent two-point chart, the commodity moved back to a buy signal for the first time since the start of September. Crude is now up around 44% from its lowest level in July.
• Due in part to the rebound in crude and other commodities, the energy major sector SPDR fund was able to regain long-term market strength this week, moving to an RS buy signal against SPXEWI for the first time since March of 2025. XLE also completed a second consecutive buy signal on its trend chart, with it currently holding a near-perfect fund score of 5.91.
• Small caps have taken a hit over the last several weeks, especially relative to large cap areas of the market. The iShares Russell 2000 ETF (IWM) lost near-term market relative strength earlier this week, reversing into a column of Os against SPXEWI. IWM also has a sub-3.0 fund score of 2.28, which is its lowest level since August of last year.
• Tesla (TSLA) unveiled their Tesla Roadster 2.0 during an event on Wednesday evening, during which they showed a version of the car that was able to flip in the air fully on its own. Investor reaction was positive, with TSLA shares up around 3% during overnight trading. That said, it remains more of hold than anything as a 3 for 5’er, with it currently right above its bullish support line.

Bank earnings have been mixed this week with J.P. Morgan Chase (JPM) kicking things off with a notable miss for the first time in three years. Bank of America (BAC) and Wells Fargo (WFC) also drew ire after reporting earnings misses, while Goldman Sachs (GS) had a blowout Q3. While banks have taken a step back along with the broader market since the beginning of September, this week’s earnings brought additional chart action with some testing notable near-term support. Below are highlights from a few of the aforementioned banks this week.

Although still maintaining a buy signal on the default trend chart, Bank of America (BAC) has fallen precipitously from its August 2026 high at $65. Since reversing into Os, BAC has fallen to test support at $50 and the bullish support line. A move to $49 would shift BAC to a sell signal, while the bullish support line would be violated with a move below $48. Beyond support in the mid-to-upper $40s, support can be found in the mid $30s. Along with action on the trend chart, the market RS chart against the S&P 500 Equal Weight Index (SPXEWI) sits within one box of reversing down into Os. This leaves BAC with two potential technical attributes at risk if the stock sees additional downside action.

Prior to earnings this week, Wells Fargo (WFC) dropped to a 2 technical attribute rating after moving into a negative trend in the latter part of September. Action earlier this month brought WFC into the upper $70s, above the May 2026 chart low, but has since consolidated within the lower $80s and recent support in the upper $70s. Beyond support in the upper and lower $70s, investors have to look back to the April 2025 chart lows around $60.

Though Goldman Sachs (GS) reported a notable blowout on earnings, this week’s trading brought about a third sell signal at $864 since peaking in July. Prior to this week’s break, GS witnessed the market RS chart against the S&P 500 Equal Weight Index (SPXEWI) reverse into Os in mid-September, while the peer RS chart reversed into Os to kick off October. While GS maintains a 3 technical attribute rating, recent action has brought GS the closest its the bullish support line since shifting back into a positive trend in mid-2025. While current support sits at $800 and $784, a drop to $792 from here would violate the bullish support line and drop GS down to a 2 for 5’er for the first time since 2022.

While there are a number of other bank stocks that could be discussed, the State Street SPDR S&P Bank (KBE) and Regional Bank (KRE) ETFs offer notable perspectives. Along with other funds, both ETFs fell to a sell signals in September and recent action has brought each to test near-term support. KBE fell to $62 on the default trend chart earlier this month and support beyond current chart levels resides at the bullish support line at $58. Recent downside has also brought the market RS chart of KBE versus the S&P 500 Equal Weight Index (SPXEWI) to within one box of reversing down into Os. Further trend or RS chart deterioration would bring KBE’s fund score below the acceptable 3 threshold for the first time since 2025.

KRE on the other hand has already seen the trend chart shift in a negative trend in the late stages of September, while recent action has seen the chart drop below $70. Along with this week’s reversal lower to test near-term support at $68, the market RS chart reversed into a column of Os after having been in a column of Xs since December 2025. While the fund score of KRE is slightly higher than KBE’s fund score at 3.44, additional deterioration could bring the fund score below 3 for the first time since 2025.

Though KRE and KBE still maintain fund scores north of 3, the broader Financial-Banks group on the Asset Class Group Scores has seen its score drop below 3. For the last 12 months, the group has seen brief drops below 3 before rallying back above the acceptable threshold. April 2025 was the last time the group’s score fell below 3 for longer than a few trading days, while the last notable period of score weakness for the Financial-Banks group was from early 2022 to late 2023.

While many of the highlights today zeroed in on banks on the cusp of technical deterioration with which stocks and ETFs within the subsector reside, it is worth noting that most already sit within oversold territory and drops into highly or extremely oversold territory would be the tipping point. Investors should monitor near-term support closely and be prepared with a plan if support is taken out and further technical deterioration ensues.

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