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VIX

Today is a good reminder that headlines are backward looking and why most of the market becomes bearish at the exact wrong time. Thursday VIX broke back to bearish TRADE TREND, which is forward looking, and today the market continues to rally.

MOVE

Bond volatility bounced near TREND and the low end of the RANGE, so this is not a risk-off rally across the board. As we mentioned last week, the question is whether the VIX is leading this shift in risk or lagging bond volatility and credit markets. Today U.S. equities strengthen as MOVE and HYG remain unchanged.

HYG

Friday was triple witching options expiration. We are now approaching a quarterly change out of Quad 4 into a quarterly Quad 2 to finish the year (growth and inflation accelerating). Keep a close eye on MOVE and HYG to see how they react into month’s end next week.

SPY

Did you panic at the low end of the RANGE in bullish TREND and sell all, or did you follow the fractal instructions and just reduce while holding on to your strongest longs? One approach makes decisions off headlines and fear. The other is a process.

IWM

Small caps do not have the same signal and, not surprisingly, it is the weakest index today.

SPHB

High beta failed below TREND and is also breaking out today.

Sector Signals

IGV

Software has been the strongest sector since flipping bullish August 6th. It never gave a reduce signal and is holding bullish TRADE TREND. If IGV was not your largest U.S. equity exposure, it means you either could not see the signal or you were not following the fractal instructions.

AAPL

Sectors like XLV and XLF were telling you to reduce on September 9th, and AAPL was at the low end of the RANGE and TREND. That was your rotation signal in real time.

XLF

Reduce September 9, hold September 18. This is why I use volatility-adjusted breaks. Friday was an overrun so far. After outperforming the market since June, when the Signal told me to enter.

Friday, September 18, 2026

XLV

Same thing in Healthcare. Reduce, not exit, after outperforming all summer.

XLE

Energy was the only sector on sale last week. It is down some today, but the question is whether you started allocating to it September 17 or August 7. The answer is a direct reflection of how well you are executing the process. This is the third opportunity, not the first.

What do you do here?

Follow the fractal math. Hold until it breaks TRADE, which means reduce is the next step in the process. Currently it is bullish TRADE TREND below the low end of the RANGE—that is a strong signal. If you entered on Thursday and all you can see is red P&L, that can distort what the signal is actually telling you. Remember: the signal does not care about your cost basis.

DRAM

AI is showing life as it held bullish TRADE and is now testing bearish TREND. This is not where you buy. Based on the process you should not be exposed to this rally, as it is still bearish TREND. That does not mean it is not an important signal to track. If AI flips back bullish, that is a significant headwind turned into a tailwind for the entire market going into quarterly Quad 2 to finish the year.

XLU

Not everything is rallying. The signal told you exactly where to be long and where to be short. This is obviously a short. Sell some down here.

XLY

With the market breaking out to bullish TRADE TREND, I am not looking to add sector shorts despite the signal in XLY. That is a personal preference and a good position to be in, as there have not been many new positions to add. It has been more about managing positions from strength from WHEN the signal told me to enter. Longs like IGV, XLV, XLF (June–August) and shorts like XLU (early August). You do not have to force anything. If you are not that exposed here, it means you have not been following the fractal instructions in real time. If that is the case, being in cash and waiting for the next instruction is the play. As of right now XLE is the only sector in a position to add, but again that should not be new either.

Macro Markets

That is the U.S. equity overview. Macro saw a big shift in the DXY signal, and the biggest winner has been crypto (the signal absolutely nailed this move).

DXY

Going into the Fed hike, DXY was coming off a double failure of TRADE with room to run to TREND.

Wednesday, Sept 16, 2026

The dollar has been straight up since. What was not expected is that U.S. equities and crypto would rally with it. BUT that is why you follow the individual instructions of the ticker, because correlations change. It was a reason not to get aggressive, but individual signals also told you not to exit and even to buy the dip, like in Bitcoin, despite the dollar.

BTC

Same day as the Fed rate hike, this is what the fractal instructions said to do.

Wednesday, Sept 16, 2026

Also note this was not the first signal. Fractal math told you to enter back in August. This was the second signal telling you to buy the dip at the first pullback to the low end of the RANGE after flipping bullish TRADE TREND.

Friday, August 14th, 2026

Notice these are not guarantees. You need to learn to make moves in real time knowing exactly where the signal changes, which means you can act without bagholding. But make no mistake: there were signals to buy at 63k in August and 75k last week. Now it is at 86k. If all this seems confusing, it probably means you are trying to participate in the market without the full fractal math (waiting for me or Keith to tell you what to do) or you have not spent enough time with the signal (it takes time to master). These are not confusing rules. The problem is having to guess because you do not have the full fractal math.

GLD

Just because Bitcoin is ripping with the dollar does not mean the rest of macro is immune to this dollar move. The gold signal is weakening as TRADE climbs above the RANGE and TREND sits in the middle, not below. You already should have reduced on the TRADE break and now should be ready to cut entire metal exposure if TREND fails. Again, these are hard rules. The hard part is overcoming normal human emotions in real time. The only way I was able to do that was time with the full fractal math.

COLO

Bullish TRADE TREND in the DXY also creates problems for global equities. You can start to see here that COLO is beginning to weaken as TRADE climbs inside the middle of the RANGE. That does not mean to do anything yet, but knowing the DXY signal paired with this is preparing yourself for a heavy REDUCE if TRADE breaks—before it happens—so if it happens you are ready to execute. Again, impossible to do if you cannot see the full fractal math (Similar Set Signal is the only product on the market that gives you this ability).

TLT

Yes, the Fed hiked, and there are a lot of opinions on what that will do to bonds. The math says bearish TRADE TREND near the top end of the RANGE, and we are heading into a Quad 2 (inflation accelerating) based on math and economic rate of change. This is another place to get short TLT. But note it is not WHEN the market told you to enter—that was back in July. It does not mean you should act now, but it does mean your cost basis should be much higher than current prices.

Oil

Oil is bullish TRADE TREND at the low end of the RANGE, hence why XLE is still a good play. I would not double up exposures, and XLE gets whipped around less on oil headlines, but to each their own. I just review the signals for you daily here.

COM

Bullish TRADE TREND at the low end of the RANGE Friday. Today it is bouncing. It is not magic. It is highly accurate fractal math.

Friday, September 18, 2026

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