RUT2837.552 $DJI

The sequence this week matters more than any single line on a chart. Easing oil and yields gave the market room to rally on Monday, and AI leadership carried ES, NQ and NDX to new highs on Tuesday. Then the midweek surge in yields tested that rally. The indices recovered into Friday, but the recovery did not bring the rest of the market with them. That is the distinction between my tactical call and my macro view. The NQ long captured the move I expected; the remainder was stopped out when the retracement extended. I still expect NDX to extend its highs and SPX to print one of its own. RUT continued to weaken, and DJI keeps underperforming SPX. Businesses outside AI remain more exposed to the war's input-cost and financing pressures. September's flash PMI showed both strong activity and the steepest rise in input costs in nearly four years. The economy can look strong in the headline while the cost shock keeps building underneath it.

This is why I keep coming back to NVDA, SOXX and KOSPI. If the AI complex keeps carrying the indices while RUT and DJI fall further behind, another index high would only sharpen the divergence. My view remains that the rally can run into a major swing high in the coming weeks, followed by sizeable declines in the months after.