Below are highlights from the NDW Morning Update Video for the morning of 9/21/2026. Access the video on the NDW Morning Update Video page. 

• U.S. equity indices are positive Monday (9/21) morning after mixed trading on Friday (9/18) that saw the Nasdaq-100 (NDX) and Nasdaq Composite (NASD) add 67 and 39 basis points. Last week’s trading witnessed most U.S. indices finish in negative territory - led to the downside by the Dow Jones Industrial Average (.DJIA) at  -1.7% - with the exceptions being NDX and NASD, which were up 94 and 72 basis points. After seeing some charts reverse higher following Thursday’s (9/17) trading, NDX was the only chart to see additional chart action Friday as it climbed above 29600 to form a triple top.
• The 10-week for NYSE stocks fell to 30% last week, marking the lowest level since April and suggesting less than 1/3^rd of the roughly 1800+ stocks in the NYSE universe trade above their 50-day moving average. Additionally, the short-term NYSE High Low Index (^NYSEHILO) fell into the lower 20s, highlighting a continued decrease in stocks making 52-week highs relative to those making 52-week highs and lows. The intermediate-term bullish percent for the NYSE universe (^BPNYSE) sits just one box above its 2026 chart low from March at 40%.
• While the U.S. Dollar (DX/Y) was roughly flat after Friday’s (9/18) trading, the default point and figure chart reversed back into Xs at 100.50. This places a higher bottom in the upper 90s on the chart and brings the index up to test the bearish resistance line. From here, a move above 102 would mark a second buy signal and flip the trend back to positive for the first time since early 2025.
• Crude Oil (CL/) fell more than 5% Friday (9/18), leading to a sell signal at $98 as the commodity fell to $95. Crude prices are down slightly pre-market Monday, trading in the lower $90s.
• Beyond a few notable earnings Wednesday (9/23) and Thursday (9/24) (a couple a highlighted below), investors will have their focus on U.S.-China meetings this week, highlighted by discussions scheduled between Presidents Trump and Xi Thursday.
  • Cintas (CTAS) – Reports 9/23 – The stock has been a 4 for 5’er since August this year after showing positive near-term peer relative strength. CTAS has maintained a buy signal and positive trend since July this year and recent action has seen the stock come down to test support at $196. Beyond current support, prior resistance in the mid $180s may be seen as additional support, while the bullish support line sits at $174.
  • Costco (COST) – Reports 9/24 – COST gave a third sell signal on 9/16 by breaking a double bottom at $896. This brings the 3 for 5’er down to test the bullish support line, which has been in place since February 2023 and would be violated with a move below $864. Additional support may be found at $848, the December 2025 chart low.

While markets have been steady over the last several months, participation within the market has not. Over 70% of large cap stocks traded on a buy signal around a month ago, as measured by the bullish percent for large caps (^BPLCAP), but that indicator has fallen by over 20%, as less than 50% of those stocks now trade on a buy signal. However, the decline in participation hasn’t come across the board. Isolating the participation of growth and value names, we can see that there’s been a clear culprit behind the recent slowdown.

A Growth Driven Participation Decline

The bullish percent for large cap growth stocks (^BPLCG) peaked at 74% in August, which was the highest it had climbed in over a year. Since then, the indicator reversed into a column of Os, moving significantly lower to its current levels just above 40%. Conversely, the bullish percent for large cap value stocks (^BPLCV) peaked at 68% in August and only just reversed back into a column of Os, with it currently at 62%. Said differently, a third of growth stocks have moved to a sell signal over the last month while only 6% of value stocks have done so. Consequently, the recent decline in participation has come almost exclusively from growth areas while value stocks have primarily remained steady. For those worried that participation in the market, especially growth names, is flashing yellow lights (as we mention here), then it could make sense to pivot more allocation over to value.

The Intersection of Value and Momentum

For investors considering that shift, the challenge becomes determining how to implement it. Momentum investors and value investors are often viewed as polar opposites. Momentum investors buy stocks that are appreciating (showing positive momentum), while value investors generally buy stocks with depleted (undervalued) prices. Each approach looks at different calculations to arrive at target stocks, but they often function on different time horizons.

Of course, momentum and value investing also have some similarities. Both investment approaches seek to hold stocks they expect to appreciate at some point in the future. Otherwise, what is the point of investing? When implemented successfully, both approaches have a repeatable process that can be used to identify target securities. We are partial to momentum investing here at Nasdaq Dorsey Wright since it is the backbone of our investment process. We understand (perhaps better than most) that focusing on momentum does not work every time, but it can work over time when implemented consistently. Value investing often functions the same way even though the approach is different. Some periods work well for value investing, and others do not.

Currently, value securities could provide exposure to areas of the market that have held up relatively well during the recent deterioration in participation, but investors do not necessarily need to abandon momentum altogether. In fact, one of the more interesting areas of the market today may be the intersection of those two factors, focusing on value stocks that are also demonstrating strong relative strength. Combining the two can offer a way to maintain exposure to stocks with improving price trends while tilting toward the portion of the market that has proven more resilient in recent weeks. Additionally, the success of value and momentum often occurs at different times, as these two return streams are also typically inversely correlated with one another (source: Value and Momentum Everywhere by Clifford Asness et al.). Historically, combining the two factors together has created a more consistent return profile over time, and it has the potential to do so again in the future, depending on market conditions.

Both Factors in Action

The First Trust Dorsey Wright Momentum & Value ETF (DVLU) seeks to follow a systematic process that combines aspects of both factors into a single approach tracking our Momentum Plus Value Index. That process takes a broad inventory of US large and mid-cap equities and compares them to the market using relative strength (momentum). Once we determine which stocks pass the initial RS screen, we then rank them based on a composite value score that accounts for price-to-earnings, price-to-sales, price-to-book, and price-to-cash flow. The 50 securities with the highest value score at each quarterly evaluation are selected as the index constituents.

This process has led to positive technical development from DVLU this year. Over the last year, DVLU has completed three consecutive buy signals and has traded firmly in a positive trend. While it pulled back in March of this year, the fund has risen more 16% since the start of April, outpacing the iShares S&P 500 Value ETF (IVE) by almost 7%. Recent action has seen the fund pull back slightly again, leaving it in slightly oversold territory with an OBOS reading around -50%. Despite that, it still sits in constructive territory with a fund score of 5.26, which is nearly a full point higher than the US Large Cap Value group on the ACGS page.

Disclosures:

This article is intended only for financial professional use only. Not Intended for retail investors.

Click here for more information from Invesco on the First Trust Nasdaq Dorsey Wright Momentum & Value ETF (DVLU): https://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=DVLU

Dorsey, Wright & Associates, LLC is owned by Nasdaq, Inc. and we have affiliates who also provide financial services, research, information, and act as Broker/Dealers to a wide variety of clients. Our affiliates use information we create to create indexes, which are then used to create Exchange Traded Funds. These things create a potential conflict of interest in that we may have an incentive to promote or use the products and services of our affiliates and business partners. A number of Dorsey Wright representatives are registered with and hold securities licenses with the affiliate broker dealers. In this capacity, they assist with marketing and distribution of Exchange Traded Products.

While we make every effort to be free of errors in this report, it contains data obtained from other sources. We believe these sources to be reliable, but we cannot guarantee their accuracy. Officers or employees of this firm may now or in the future have a position in the stocks mentioned in this report. Dorsey, Wright is a Registered Investment Advisor with the U.S. Securities & Exchange Commission. Copies of Form ADV Part II are available upon request.

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool, click here.

Call

Shell PLC (SHEL) Dec 18 $92.50 Call

Put

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Income

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