Made Hands Intact

My default view each year around Labor Day is to implore readers and Members to exercise extreme patience for up to a week (some years even a bit more than that) in order for the market to regain its feel of the "full squad" back at their trading desks after summer trading. 

However, this year saw Labor Day fall about as late as it possibly can, being the first Monday of September and all. We have also seen one of the more historic runs of low broad market volatility coupled with dispersion and correlations in the basement, despite the Iran War, sticky high inflation/rates, gasoline/diesel shooting higher as well as food input costs. 

As a result, I would not be shocked to see higher volumes come in as this week unfolds, particularly with the PPI/CPI inflation data scheduled for Thursday and Friday morning. 

On that note, as you can see on the second chart, below, which is the updated daily timeframe for rates on the 10-Year Note, we have a coiled pattern intact right around the key 4.8% level (48 on this chart). This chart is bullish on all timeframes and continues to suggest rates are headed higher with or without a hawkish Fed, which is perhaps the most ominous aspect about the setup. 

Another intact pattern, despite recent rally and rotation hope, is the bearish head and shoulders top on the monthly chart for the software sector, first below. 

Each software rally has brought in hopeful bottom callers for since October 2025, to little avail. This time may be different, but the rally continues to unwind lower I favor this bearish interpretation into one of the most bearish seasonal times of the year in the coming weeks.