Technical Analysis
Nasdaq extended its gains on October 1 as a morning sell-off was bought. QQQ rose 0.31% to 742.03 and the Nasdaq-100 gained 0.31% to 30,501.56, while SPY added 0.18% to 763.99 and the S&P 500 0.19% to 7,666.45. QQQ dipped to 736.25 as long yields spiked, then closed 0.79% above the session low.
QQQ remains above all principal averages: 2.18% above its 20-day (726.18), 3.68% above its 50-day (715.66) and 11.10% above its 200-day, with both shorter averages rising. RSI(14) stands at 61.5. A new swing low at 731.63 lifts the structural floor. SPY reclaimed its 50-day (763.07), returning its medium-term trend to bullish.
Participation was mixed. S&P 500 breadth improved from a low base — 22.95% of members above their 50-day (prior 20.96%) — and equal-weight RSP rose 0.47%. In the Nasdaq-100 the share fell to 44.55%, and eight of the ten largest names declined; the day's gain came from outside the megacaps.
Main technical conclusion: the QQQ uptrend is intact on all three horizons, with higher lows but without breadth confirmation on the medium term. The 744.67–745.10 double top is the nearest resistance ahead of the 748.35–748.65 record zone; support sits at 739.46–740.77, including modeled zero gamma, and then at the 727.81–731.63 zone.
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Fundamental Analysis
The Treasury curve shifted lower on October 1 after the 10-year yield touched its highest level since 2002 intraday. At the close the 2-year yield was down 10 bp at 4.78% and the 10-year down 5 bp at 5.24%, with 2s10s wider at 46 bp; the 10-year real yield eased to 2.88%.
The decline reflected Fed rhetoric rather than data. Kashkari said he has no strong view on October while still projecting further hikes, and Jefferson said policymakers may need more time; odds of an October hike stood near 24% (as reported by Newsquawk). ISM Manufacturing slipped to 54.5 against 55.0 expected, but its prices index jumped to 77.9, claims stayed below 200,000, and oil rallied in media reports after China suspended fuel exports.
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. High-yield spreads widened to 312 bp, up 47 bp over 20 sessions. Forward EPS revisions (+1.40% over four weeks) remain the principal offset ahead of FactSet's October 2 update.
Main fundamental conclusion: the scorecard holds at −5 of ±14 on six of seven components, a moderately unfavorable backdrop. Two components sit at their thresholds — the equity risk premium and the five-session change in the 10-year — so lower yields could lift the score, while real rates, credit and oil continue to outweigh resilient earnings momentum.
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Volatility
Regime. Volatility steepened rather than rose on October 1. VIX closed at 16.39 (+0.05) and VXN at 22.51 (+0.05), leaving the Nasdaq premium over the broad market unchanged at 6.12 points, while VIX9D fell 0.20 to 14.00 and VIX3M rose 0.21 to 18.58.
Short versus long volatility. The curve remained in contango: VIX/VIX3M eased to 0.882, within the Normal band, and VIX9D/VIX to 0.854. October VX futures settled at 18.101 (+0.233), more than the move in spot — the market is not pricing an imminent shock but keeps paying for protection one to three months out.
Nasdaq volatility. QQQ 30-day implied volatility rose to 19.74% while 10-day realized fell to 16.41%; the premium over 20-day realized widened to 4.63 points. Skew stabilized at +4.79 points after the prior session's steepening, and the 10Δ put cheapened 0.24 points. The October 2 payrolls series trades at 21.90% and its straddle implies ±0.92%.
Principal warning. On our model, net GEX fell to +$0.76 billion per 1% move and zero gamma rose to 740.77, only 0.17% below the close. The profile is more asymmetric than a day earlier: a 1% decline would take modeled GEX to −$3.37 billion, so a close below 737.07 would place the market in negative gamma, while a close above 744.47 would turn it positive. Put wall 730 and call wall 760 are model estimates, not observed positions.
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