Market Update Preview
Last week the argument was simple: we're overpriced relative to flows (not the biggest concern on its own), the Flow Monitor had flipped to two warnings after the September tax drain, and 7,900 was going to be a ceiling. Then yesterday morning the inflation print landed — a surprise to the upside — right as we were about to eke out new all-time highs, and it tanked markets in the short run. The consolidation-with-a-pullback call is playing out almost exactly as laid out.
So the question now is whether this is all the selling we get, or whether there's another leg lower before the real breakout. I walk through my read on that, the levels that bound it, and the specific short-term indicator that makes me think we get one more dip before November delivers the push through. I also explain why this inflation surprise was expected inside the framework, how the Fed is likely to respond in two weeks, and why bonds caught the bounce we were looking for.
Then the longer-term caveats — and there are a few this week worth your attention. Tax receipts may be signaling something the Fed will care about a lot. Bank credit still isn't doing what I expected. And one chart I'd call "potentially concerning if you showed it to me with no context." None of it changes the trajectory yet, but it sharpens the timeline for when it might. Full breakdown below.
(Note: Below is a full summary of the Market Update Video for 10/15/2026, click here to watch the video update)
