Hey everyone, welcome back to the U.S. stock analysis channel, I'm lorder. It's Tuesday evening, October 6, 2026, Eastern Time. Today, three of the four major indices closed higher, with only the Russell falling. The S&P finally posted a record closing high. The one blemish: volume is starting to dry up. The Nasdaq 100 closed at a record high for the third straight session. S&P components were mostly higher, with only one of the eleven sectors—healthcare—finishing in the red. Utilities were the standout performer, up nearly 3%, boosted by news of the CEG-Google power deal.

The market is moving higher, but shrinking volume suggests momentum may be fading. With the Q3 earnings season about to kick off, attention is shifting from the extreme earnings growth of a handful of AI leaders to whether the median S&P 500 company—where EPS growth is expected at just 9%—can beat expectations. That will be the key to whether the market can keep climbing. For some semiconductor names that have already run up sharply, be wary that valuations may have priced in the good news ahead of time.

Let's start with utilities. We talked earlier about the short position in XLU, and at the time there were a lot of shorts, which set up conditions for a short squeeze. Today looks like a similar squeeze—a big bullish candle on high volume, gapping up with almost no wicks. I'll flag this again: this is not an improvement in fundamentals. Utilities are still utilities; nothing has changed on that front. How far a squeeze like this can run is anyone's guess. If you had a position parked here from before, keep an eye out for topping patterns above and take profits while you can. On the technical side, the 42.4 level above hasn't been cleared yet, and there's a cluster of strong resistance there, with pressure extending all the way up to 46.8.

Next, the main event—starting next Thursday, Q3 earnings season begins. The market really needs some fresh catalyst right now, in either direction. And October is already a high-volatility month. Add earnings season on top of the midterm elections, and volatility could increase further.

Marvell (MRVL): Jumped nearly 6% on a big upward revision to its revenue outlook. Strong resistance above sits at 318. A break above that would point to new highs, but if it fails, watch for topping patterns. The valuation has been revised up by roughly $40 to $50, and if the stock trades above $300, it may already be pricing in more than a year of growth. The short-term move is being driven too fast by the news, and it's approaching the upper end of fair value—chasing here carries significant risk.

AMD: Closed at a fresh recent high, with the trend pointing up. The stock has already run to roughly the 2028 forward valuation level around 700, pricing in about a year and a half of growth ahead of schedule. Given the expected earnings surge in Q4 2027, existing holders can stay in, but the short-term move has been too fast. A simple way to gauge trend strength: whether the stock keeps posting fresh closing highs.

ISRG: Trading in a range with strong resistance above and solid support below. Fair value is within 450, 470 above is already a solid target, and anything above 500 is overvalued. The strategy here is to hold the current position and consider adding if it pulls back below 311.

CEG: Surged 12% on the power agreement with Google, touching a high of 309 intraday. But the sector's move is more about short covering—a squeeze. A break above 328 is needed to confirm a larger uptrend. For those who got in at lower levels, I'd suggest taking profits. There is some fundamental improvement—the new agreement is clearly a positive for long-term orders—but that doesn't apply to every company in the space. Treating the sector's rally as a squeeze won't leave you too exposed.

October tends to be volatile, and with earnings season plus the midterm elections, market volatility could pick up.

Q3 earnings growth is heavily dependent on a small number of AI and semiconductor leaders—Micron and Nvidia alone account for more than a third of the growth. These companies' extreme growth is already heavily priced into the market, so stocks may show a muted reaction to positive news.

Semiconductor industry gross margins are currently above 70%, far above the historical norm of around 55%. That high-margin environment is not sustainable and carries the risk of a cyclical pullback.

The recent rally in utilities is driven mainly by event news and short covering, not a broad fundamental turnaround in the sector, so the durability of the move is questionable.

For non-AI stocks, while median-company earnings could offer catch-up opportunities, earnings expectations have already been revised down, leaving room for disappointment.

That's all for today. It's a quiet tape, so I'll keep the show short. See you tomorrow at the same time.