THE BIG IDEA
Last week we came across a trader who had bought shares of a company in the finance sector and was, shall we say, not pleased with how it was going.
This trader also seemed to be blaming the company for the fact that the stock did not immediately go up after he had bought his shares. But that’s another story.
The thing is that there is nothing wrong with the specific company this trader chose to invest in. All similar competitors have stock charts looking pretty much the same.
Below we have Citigroup, Bank Of America, Goldman Sachs, Charles Schwab, Robinhood, Etoro, Webull, and SoFi.
There are two good reasons why all of these stocks have been heading down together.
One is that all of these companies are borrowers of money, and borrowing costs have been high and refusing to come down.
More interesting is a series of reports from influential sources that suggest using AI agents to engage in “cash sorting”. That means using an AI tool to automatically move your idle cash balances somewhere that pays more attractive interest rates. See, for example, this and this.
For banks and brokers, all that idle cash has historically been a cheap source of funding. Now there are concerns (for those businesses, not the depositors) that it might go away.
It affects Bank Of America, Robinhood, and all the others.
The moral of the story is that if you can’t understand why your stock is going down, look beyond that company. It could be due to factors affecting an entire industry.
SEEN ON THE INTERNETS
Nasty.
That was the one-word comment from Greg Rieben about the chart of the NASDAQ 100 that he posted on social media (and copied below).
Many of us were pleased to see the NASDAQ 100, or the QQQ ETF, finally break out of a summer-long base at the beginning of October.
Those types of breakouts don’t always work out. It couldn’t be that easy, could it? Sometimes the breakout fails, which leads to the Wall Street aphorism that “from failed moves come fast moves in the other direction”.
That’s what happened here.
It’s a stern reminder that we don’t have any guarantees, only probabilities.
NUMBERS ONLY
- 9.77% | The S&P 500 High Beta ETF (SPHB), holding the 100 most volatile stocks in the index, is down nearly 10% for the month so far. |
14 | Despite some rocky trading in some corners of the market last week, the S&P 500 had 14 of its members go up by double-digit percentages. |
- 17.57% | In a Mother Of All ‘Sell The News’ events, shares of Moderna (MRNA) fell by 17.57% on Thursday after positive results from its Phase 3 cancer treatment study were made public. The stock remains up 578% for the year. |
SWINGEX INDEX
As of market close on: 23 October 2026
Swingy says: Some turbulence, some flatulence. But in the end, the index is positive for the near future.
Learn more about how the Swingex Index works here.
WATCHER
Trade ideas highlighted here each week have a timeframe of 3 days to 3 weeks in mind. They are not recommendations to buy or sell. Swing traders should follow up with their own research.
ITRI (Itron): In the current environment, we are looking for small cap stocks that have been getting beaten up lately. Itron fits the definition well.
The shares jumped by 26% after a solid earnings report on July 28th. It has been a long, slow return back to where it started almost from the time of that report.
Last week ITRI finally started to show some signs of life, bottoming out at $82 and pushing up to $88 on slightly better than average volume. Those buyers helped the stock to escape its downward price channel.
Itron has its next earnings report scheduled for Tuesday morning. In the previous three quarters, the company surpassed estimates by 12%, 20%, and 23%.