Weekend Update & Market Outlook 9/27/26

Prefer to watch? Here's this weekend's video update.

The Week in Review

On Wednesday the Treasury tried to sell $70 billion of 5-year notes and the market pushed back harder than it has in almost a decade. Stocks went up anyway. That gap is the story.

SPX finished at 7,743.41, up 1.22% on the week and now just 55 points from its August record. The Nasdaq-100 rose about 3% and set a record high on Tuesday.

Underneath that, Wednesday brought the week's genuinely important event. The Treasury auctioned $70 billion of 5-year notes. It priced at 5.033%, tailing by 3.1 basis points — the second-largest tail on record for that maturity — with the weakest demand since 2018.

For context: the same auction on August 26 cleared at 4.393%. That is 64 basis points higher in a single month on one $70 billion tranche. A tail means buyers demanded a steeper discount than pre-auction trading implied. In plain terms, the market did not want the paper at the offered price.

The 5-year yield crossed 5% for the first time since 2007. The 10-year followed to roughly 5.15%, up about 15 basis points on the week and also a nineteen-year high.

Two things kept equities afloat. Oil fell roughly $10 from the prior Friday, settling at $92.41, after Saudi Arabia moved to reopen its East-West pipeline and President Trump described U.S.–Iran talks as “very good” with another meeting scheduled. And the data held up — core capital goods orders rose 1.6% in August, a healthy read on business investment, even as headline durable goods came in unchanged.

Monday delivered the best session since early August on Meta's new Muse agent lifting the AI trade. Friday, Akamai rose 3% on a multiyear deal with Anthropic. Treasury Secretary Bessent said the U.S. and China extended their trade truce by two months.

Weekly Market Scorecard — Week Ending September 25, 2026

The Nasdaq-100 outpaced the Composite, rising roughly 3% and setting a record high on Tuesday. Yields: 5-year 5.033% at auction, crossing 5% for the first time since 2007; 10-year roughly 5.15%. Crude settled at $92.41.

The One Group Not Participating

The Russell 2000 fell 0.55% to 2,844.32 — a sixth consecutive down week — while the Nasdaq-100 set records.

That divergence has been running since Jackson Hole and it is widening, not closing. The reconciliation is duration. Large-cap technology with net cash can absorb 5% rates and may even benefit, because competitors financed with floating-rate debt cannot. The index isn't disagreeing with the bond market. It has decided who survives it.

SPX / SPY

7,743.41 on the close. Resistance is 7,798.99 — the August 13 record, only 55 points overhead. Above that it's open air: 7,850, then 8,000. Support is 7,700, then 7,650, then the 50-day near 7,615. The index has pulled comfortably clear of the 50-day it was fighting a week ago.

QQQ

Around 744, up roughly 3% — the strongest of the three, and the Nasdaq-100 hit a record Tuesday. The Nasdaq Composite closed at 27,068.72. This is where the balance-sheet advantage shows up most clearly.

IWM

Around 283, down roughly 0.55%, with the Russell 2000 at 2,844.32. Sixth straight down week. Small caps carry the most floating-rate debt, so they feel a 5% five-year directly — and they have the most to gain if yields ever come back in.

The Week Ahead

Bias: Constructive on large-cap tech, negative on anything rate-sensitive.

Wednesday brings August PCE, and core is forecast to accelerate — headline +0.4% monthly and core +0.3%, both up from +0.2% in July. This is the Fed's preferred inflation gauge and the first reading since they hiked. Acceleration here is the hawkish case made concrete, landing into a bond market that just failed an auction.

Friday brings the September jobs report. Consensus looks for +100,000, down from August's 162,000, with unemployment rising to 4.2% from 4.1%. That's the one release that could give the Fed room to pause.

Watch the combination. Accelerating inflation alongside softening employment is the pairing that leaves a central bank with no comfortable option. Micron and Nike also report, and ISM Manufacturing lands Thursday. The next Fed meeting is October 28.

A Note on the Flyagonal

Here's the honest picture as of this week, covering 101 trades from August 2025 through September 21, 2026.

• Win rate: 87% (88 wins of 101 trades)
• Total return: 70.9% on a $6,500 capital basis
• Average days in trade: 7.0
• Needed no mid-trade adjustment: 62% (63 of 101)

The strategy remains solidly up over the period. It has also given back a meaningful portion of its peak — the cumulative curve topped out above $8,000 in the spring and has worked lower since. I'd rather show you the whole curve than just the good half of it.

As I've mentioned, I'm spending the next couple of months using AI extensively to deconstruct the strategy and run backtesting — understanding what has changed in this environment and where the approach can be improved. Any findings from that work get published directly inside the Flyagonal course, at no additional cost, for everyone who already owns it.

While these are live results, past performance does not guarantee results. Trading options involves significant risk and is not suitable for all investors.

Have a great weekend. See you next weekend.

Your options trading coach,
Steve Ganz