Last Man Standing

Last Man Standing October 13, 2026

TECHNICAL STRATEGY Mag7 Holding Things Together, but For How Long? Jonathan Krinsky, CMT WHAT YOU SHOULD KNOW: ( After yesterday's lowest non-holiday SPY volume since 2003, we are seeing a bit more volume and volatility today, although SPX remains buffered by Mag7 which is up ~1%. Mag7 is the last cohort of stocks that are important to the SPX that hasn't shown any weakness. It's also the group that is the most widely owned right now. Always hard to pick a fight with new highs, but if this trend begins to reverse, that's likely what causes SPX to finally see some sustained weakness. Semis remain a weak link, but if we follow the 2000 analog which has provided an uncanny roadmap since the summer, SOX should find a temporary bottom over the next 24 hours, get one final rally before the selloff accelerates later into October. Software continues to show momentum and the IGV/ SMH ratio is above its 200 DMA for the first time in 16 months. Finally, we provide some updated thoughts on Utilities, Homebuilders, and Refiners. ■ Last Man Standing. Mag7 is the last cohort of stocks that are important to the SPX that hasn't shown any weakness. It's also the group that is the most widely owned right now for their perceived safety to rates and geopolitical risk. Always hard to pick a fight with new highs, but if this trend begins to reverse, that's likely what causes SPX to finally see some sustained weakness. ■ The SOX 2000 Analog Continues to Track in Uncanny Fashion. Again less about some voodoo that this is 2000 all over again, more about how boom/bust cycles follow similar patterns as it takes a long time for bulls to realize that something has changed. If we assume the analog holds, we should expect semis to put in a low over the next 24 hours, and get one final rally before the selloff accelerates later into October. This happens to coincide with tomorrow's CPI, which can often act as a catalyst. ■ Software vs. Semis Turning the Corner. For the first time in 16 months, the IGV/SMH ratio is above its 200 DMA. Getting the ratio above summer highs (.20) would also confirm a major inflection has been made with software likely to outperform semis over the coming months, consistent with our recent note: Software is the New Mo'. ■ Update on Utilities. It's been 13 trading days since XLU closed with a sub-22 RSI, which triggered our bullish tactical call. XLU has rallied 7% off lows, consistent with prior similar events. We would take profits there and look for a reset. ■ Homebuilders/REITs. Homebuilders (ITB) were down 2% the last two days while REITs (IYR) were up 2%. That's unusual for two groups that are often highly correlated. In fact since 2006, there have only been two prior times when IYR gained 2%+ over 2 days (each day up at least 50bps) and ITB lost -2% or more over same 2 days (each day -50bps or worse). 4/2/07 - ITB +13% over next 17 days, and 5/24/22 - ITB +11% over next 3 days. We don't love the early pop and fade, but as long as ITB above ~$83 we would keep a bullish tactical bias. ■ Update on Refiners. It's been about a month since our cautious view on refining stocks. The S&P 500 Oil & Gas Refining Index is up ~13% since then. So a mea culpa is warranted. However, like we saw with Semis in June, parabolic moves often go further than you think, but they don't end by going sideways. The further the rubber band stretches to the upside, the harder the snap-back is to the downside. With the index 63% above its 200 DMA, our view remains that extreme downside reversion is likely over the coming weeks and months.

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BTIG, LLC Jonathan Krinsky, CMT (