Technical Analysis
The September 28 session pulled large-cap technology lower. QQQ fell 1.07% to 736.53, the Nasdaq-100 declined 1.08% to 30,276.81, SPY lost 0.74% to 765.61 and the S&P 500 fell 0.77% to 7,683.69. Equal-weight indexes also declined: RSP −0.65% and QQEW −1.25%.
QQQ nevertheless remained above all principal averages: 2.03% above its 20-day (721.88), 3.23% above its 50-day (713.48) and 10.57% above its 200-day, with both the 20-day and 50-day averages still rising. RSI(14) eased to 58.5. SPY closed essentially on its 20-day average (765.16), leaving its short-term trend neutral.
Participation deteriorated. Only 46.53% of Nasdaq-100 members and 27.23% of S&P 500 members trade above their 50-day averages; NYSE decliners outnumbered advancers 1,332 to 508, with 142 new lows against 10 new highs. Over 20 sessions, equal-weight QQEW lagged QQQ by 4.94%.
Main technical conclusion: the QQQ uptrend is intact on all three horizons, but it is carried by a narrow group and is not confirmed by breadth. Support sits at the 730–731.63 cluster; resistance at the 748.35–748.65 record zone.
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Fundamental Analysis
Rates drove the September 28 session. The 10-year Treasury yield rose 7 bp to 5.24%, its highest level since 2007, and the 30-year reached 5.56%, the highest since 2004. The 2-year rose 11 bp to 4.92% and the 10-year real yield climbed to 2.90%; with the 10-year breakeven unchanged at 2.34%, the move was almost entirely real.
Fed funds futures now price +52 bp over the next three meetings, up from +44 bp a week earlier, including roughly a 71% probability of a 25 bp hike on October 28. Governor Cook linked persistent inflation pressure to AI-driven demand and higher oil prices.
The S&P 500 forward earnings yield of 5.21% (forward P/E 19.2) now sits 0.03 pp below the 10-year yield, eliminating the nominal equity risk premium. Front-month Brent settled at $105.28 after the U.S. rejected Iran's ceasefire proposal, and high-yield spreads widened 25 bp over the week to 293 bp. Forward EPS revisions (+1.4% over four weeks) remain the principal offset.
Main fundamental conclusion: the scorecard totals −8 of ±14, an unfavorable backdrop in which rising real rates and tighter Fed pricing outweigh resilient earnings momentum.
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Volatility
Regime. Volatility rose as equities declined on September 28. VIX gained 1.20 points to 16.07, VIX9D 1.63 points to 14.39, VVIX 3.18 points to 91.02 and VXN 1.26 points to 22.13, widening the Nasdaq premium over the broad market to 6.06 points.
Short versus long volatility. The curve remained in contango: VIX/VIX3M rose to 0.882, within the Normal band, and October VX futures gained only 0.20 points, indicating that the market treats the move as short-dated.
Nasdaq volatility. QQQ 30-day implied volatility stands at 19.17% against 16.02% realized over 20 sessions, a premium of 3.15 points, although 10-session realized volatility (18.75%) is closing the gap. The October 2 weekly expiry, which captures the payrolls report, trades at 20.38% versus 18.45% for the October 16 monthly; the weekly straddle implies ±1.70%.
Principal warning. On our model, QQQ closed 0.36% below the zero-gamma level of 739.19, with net GEX of −$2.23 billion per 1% move. Gamma is transitional: a close below 735.49 would place the market in negative gamma, while a close above 742.89 would turn it positive. Put wall 730 and call wall 760 are model estimates, not observed positions.
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