Summer Wrap-Up: Post Labor Day View: Light Volume, Heavy Rotation - Part II

 I gave a way a lot in yesterday's update -  Summer Wrap-Up: Post Labor Day View: Light Volume, Heavy Rotation (Part I) - covering 8 sectors + the $VIX.  That was before yesterday's mid-morning breakout on the $VIX, along with several more important observations:  

Firstly a couple quick corrections:    

1. I was right about the sell-off starting in Europe, but Claude (AI) flagged my tweet calling HSBC "Chinese owned". I still had questions: 

Riddle me this: Why does a London based bank (according to ai) have a "Hongkong and Shanghai Banking Corporation (HSBC) logo"? 🧐

— Veteran Market Timer (@3Xtraders) September 9, 2026

Gemini (google AI) confirms:  "HSBC is a London-based bank with a Hong Kong and Shanghai logo because of its colonial history and global corporate restructuring. 

Although HSBC is headquartered in London today, it was originally founded in Hong Kong and Shanghai in 1865." 

I did not know corporate logos were a thing back in 1865, but I also did NOT know, Hong Kong was legally and practically a British colony for over 150 years. And that concludes today's history lesson.

2. I claimed financials and biotech were still leading the bull market, but that was last week's news. In fact healthcare & Biotech, is getting absolutely pummeled, and financials are on a 3 day losing streak. I'm still getting caught up after last week's road trip - try to keep up with me. I actually sounded the warning last week saying: How long can rotation trades continue to fuel the broader rally? Not much longer, I'm afraid [link to the August 22nd blog]. 

Meanwhile Morgan Stanley's "broadening out rotation trade" is, swiftly thrown under the bus @ #CNBC 🤣 @MorganStanley pic.twitter.com/MsAQP48GdC

— Veteran Market Timer (@3Xtraders) September 9, 2026

On to for more important things 

$SOXL - called out yesterday:   $SOX was sold at the 50 day SMA. You should already know that. If I had to guess I'd say it could break out, but don't ignore the algos.  

More *Broadening Rotations [Unwinds] = More Broken Charts  

In hindsight while they were levitating the market using the usual magic act (driving MAGS - including the only stocks that really matter ($NVDA, $AAPL, MSFT) higher, they were quietly unwinding the software-maggedon squeeze. Just as the msm told you the coast was clear?  

You'd have to be living under a rock not to catch the August short squeezes, but what may have flown under your radar (pun intended) is the great unwind in Aerospace (including Wall Street darling $GE - the one to watch) - and Airlines. 

$GE - trend technically broken, but seeing some machine buying at the 200 day SMA. 

Are stocks selling off in a panic? No. Just another - sleight of hand - rotation. 

BUT EUROPE IS IN DEEP TROUBLE: 

This isn't an opinion - it's based on the recent flight to hard assets in Europe, and the fact that the $FEZ (the European banking sector) just had the rug pulled below the 50 day sma. 

Breaking: ECB just rated a quarter point as expected. Here in the US we're still watching the 50 day on the $SPX, and a Federal reserve that reports next week. 

$VIX level to watch is the 50 day moving average - right where yesterday's breakout occurred. 

CNBC is seen fanning the flames:   

$VIX "fear guage" being touted at #CNBC.

— Veteran Market Timer (@3Xtraders) September 10, 2026 

 

 As I pointed out yesterday: it's a complicated market and more bifurcated than ever. I obviously can't micromanage 15 things at once, so all I can tell you is to watch the moving averages, and follow my timeline. Good luck

*Broadening rotation refers to a made up term - Morgan Stanley - which we covered in a previous blog [linked] - section title - The Rotation Hustle, Confirmed By Morgan Stanley's Own Word Salad Chef - Mike Wilson  

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