October 17, 2026

Weekly Papa List (October 12 – October 16) | A week of heavy selling pressure on tech stocks

Hello, this is Smartphone Investment Papa. I will look back at the US market this week (October 12 – October 16) based on observations from the US stock automated analysis system I operate.

Selling pressure weighed heavily on tech-heavy indices in a short period, and they even hit new recent lows by the weekend.
Even in such market conditions, there are stocks that maintained their value on the system. Is this a sign of “strength,” or is it just that they “haven’t collapsed yet”?

Overall Market Sentiment

This week in the US stock market, while tech and small-cap stocks were sold off, funds tended to flow into defensive and energy stocks.

For the week, the S&P 500 fell about 1.9% and the Nasdaq Composite fell about 4.5%, both marking their largest declines since June. Meanwhile, the Dow Jones Industrial Average rose slightly. It seems less like a broad sell-off and more like a week where the destination of funds shifted significantly.

The background to this was the convergence of three concerns in the same week.

Prices: September consumer prices rose 3.7% year-on-year, exceeding expectations, and producer prices also saw significant growth
Interest rates and crude oil: Long-term interest rates remained at high levels following the previous week, and crude oil hovered around $100 per barrel due to risks such as maritime transport in the Middle East
AI investment funding: Caution grew regarding companies expanding AI data centers through borrowing, leading to widespread selling of semiconductor stocks

Looking at it through my system, the market sentiment is leaning quite heavily toward the cautious side.

The direction of the financial environment has remained away from a loosening trend for about the past month, and this week was no different. It cannot be said that the environment is conducive to money flowing into the market.

The major indices also remain sluggish. The S&P 500 has been attempting a rebound for over a month from its mid-September lows, but there is no confirmation. The tech-heavy indices hit new recent lows over the weekend, and the attempts at a rebound have essentially been reset.

The clear difference from the previous week is the selling pressure. While selling in major indices had calmed down last week, this week it clearly exceeded the caution threshold for tech-heavy indices, and institutional investors’ profit-taking moves concentrated in a short period. The S&P 500 remains just one step away from the caution threshold.

Market breadth remains weak, continuing from the previous week. On a weekly average, stocks hitting new year-to-date lows outnumbered those hitting new highs by more than four to one. There was only one day in the week when advancing stocks outnumbered declining stocks, and there was not a single day judged as having a market environment conducive to taking risks.

The needle that moved the most this week is the group of representative stocks in strong sectors. The number of stocks in an uptrend, which was mostly flat last week, has been cut almost in half since the beginning of this week. Conversely, the number of stocks that have entered a downtrend has increased several-fold.

Even in areas that were leading the market, the number of stocks capable of maintaining their trend is thinning. I interpret this as a sign that the deterioration in market sentiment has begun to reach inside the strong sectors. There are almost no stocks that look like they are about to start moving. The only slight relief is that the buying momentum for this group of representative stocks barely managed to remain buyer-dominant.

By size, all large, mid, and small-cap stocks fell, including large-cap stocks that had risen the previous week. Small-cap stocks were sold the most. Mid-cap stocks fell only slightly less than large-cap stocks, and it is not the case that funds spread into mid-cap stocks. Looking at it over a period of several months, small and mid-cap stocks remain significantly underperforming large-cap stocks.

As for the IPO space, although the ratio of rising stocks recovered compared to the previous week, recent price movements were negative. I see the market’s risk tolerance as not yet being in a stage of expansion.

Follow-up on last week’s stocks

Here is the subsequent movement of the 6 stocks observed in the previous issue.

Moderna (MRNA): Its prominence in the system remained flat. Although it tested higher levels mid-week, it was pushed back significantly by the weekend, ending slightly lower than in the previous issue.
Iovance Biotherapeutics (IOVA): Its prominence retreated slightly. After consolidating just below its highs, it saw its price drop over the weekend.
Everpure (P): Its prominence retreated. Amidst intensifying selling in semiconductor and AI-related stocks, it declined throughout the week.
Quantum (QMCO): It has been removed from the system’s aggregation list. The stock price trended downward throughout the week, with a significant drop over the weekend.
AVITA Medical (RCEL): Both its prominence and stock price remained largely flat.
CareDx (CDNA): Its prominence retreated slightly. It tested higher levels mid-week, but was pushed back over the weekend as market sentiment deteriorated.

We also look at the changes in the observation list. Removed this week were two storage-related hardware stocks and one medical device stock. In their place, two oil refining stocks and one apparel stock were added.

As of last week, computer hardware had already begun to lose momentum as a sector. This week, that trend continued, leaving behind refining, which benefits from high crude oil prices, and consumer-related stocks with unique catalysts. The shift in the lineup from technology-oriented to resource and individual-catalyst-oriented reflects the change in capital flow this week.

Sector Trends

Healthcare is “strong but mature”

In terms of system sector scores, healthcare continued to rank at the top, following last week. Diagnostics and research-related stocks have remained at the top for over a month, and medical devices and supplies have also been there for a long time.

However, both fell out of the system’s continuity criteria this week. The momentum of medical devices and supplies has been falling day by day. While strength remains, it appears the peak is passing.

Copper is gaining momentum, while oil refining is stalling

Copper, which has remained at the top since last week, continued to gain momentum this week. Oil refining and marketing have also been at the top for a long time, but have been stalling over the past few days, and there has been a change in the momentum of the sector as a whole.

Refining company profits are determined by the price spread between purchasing crude oil and selling fuel. Due to concerns over refining capacity in the Middle East and Russia, fuel supply and demand are tight, keeping this spread high. In the July-September quarter, refining stocks led the rise in energy stocks.

The tailwind continues, but the growth in momentum has slowed due to the reaction to the significant rise. We view this as a stage of “maturity” rather than “continuity.”

Sectors moving outside the top ranks

Outside the top ranks, industrial wholesale and lodging have consecutively gained momentum. On the other hand, financial data and exchange-related stocks are stalling. General insurance, which newly entered the top ranks last week, also saw a change in its overall sector momentum this week.

These are all strengths and weaknesses viewed through relative scores, and do not mean the sector as a whole has risen or fallen.

Biotechnology and price resilience

Among the stocks that remained resilient, biotechnology showed significant depth. The content varies, ranging from mRNA technology and cell therapy to drug delivery technology.

What they have in common is that their valuations are more easily influenced by clinical data and the progress of approvals and sales than by the economy or interest rates. I see it as a natural progression that sectors valued for their unique catalysts were less likely to collapse during a week when the macro environment was a headwind.

Only one apparel stock remained. This is a case where the business restructuring of an individual company was valued, rather than a trend across the entire industry.

“Underlying changes” before they appear in price

Apart from the strength that has already appeared in price, there are areas I am observing as underlying changes. These are cases where multiple stocks in the same industry have moved upward from a state of stable price action. This week, there were three major clusters.

Defensive-leaning: Utilities, beverages, household goods, waste management, and commercial real estate
Healthcare/Insurance: Medical devices, health insurance, and non-life insurance
Industry/Resources: Industrial machinery, construction materials, aerospace/defense, and oil and gas development

Many of these have not yet reached the top of the industry score rankings. They are categorized as industries where, although it has not yet appeared significantly in price, the number of stocks meeting the criteria has increased this week.

Industrial wholesale appears in both the momentum of industry scores and underlying changes, with two observations overlapping. Movements toward defensive sectors were visible last week as well, but with tech stocks being sold off this week, these underlying changes in such modest areas were confirmed once again. I am recording this as material for finding where capital is seeking refuge.

Stocks to watch

This week, we are in a phase where caution is necessary regarding market conditions, making it an environment where stock selection is difficult to execute effectively. The following are simply stocks that appeared relatively strong.

Even so, I have not narrowed down the number of items. I believe that the stocks that will become the center of the next market rally are likely to emerge from those that showed resilience during poor market conditions. I am recording this as a watchlist.

Moderna (MRNA) | A stock reflecting the “weight of expectations” before data release

This is a biotech company whose main revenue sources are mRNA vaccines for COVID-19, influenza, and others. However, the current focus of its valuation has shifted to personalized cancer treatments being developed in collaboration with Merck.

This stock remained on the observation list from last week, and its prominence in the system was flat. The reason it remained this week is that it was resistant to collapse even under market headwinds.

The late-stage clinical trial for post-operative melanoma patients has already met its primary endpoint in an interim analysis. Detailed data is scheduled to be presented at the European Society for Medical Oncology (ESMO) on October 24.

The stock price tested the upside in the middle of the week, but by the end of the week, it saw a decline that stood out even among large-cap stocks. It was a situation where both caution ahead of the data release and deteriorating market conditions weighed on it simultaneously.

Given the high level of attention, it is undeniable that expectations are running ahead. Depending on the content of the detailed data, there is a possibility that the news will be “priced in,” and I am also mindful that it is easily pushed back when market conditions deteriorate.

Iovance Biotherapeutics (IOVA) | A stock viewed not by “expectations” but by “sales performance”

We are selling “Amtagvi” in the U.S. for advanced melanoma, a cell therapy that increases and returns the patient’s own tumor-derived immune cells to the body. As it is a small-cap stock, please be aware that price movements tend to be volatile due to short-term capital.

Even within the biotech sector, its position is different from Moderna, which is awaiting data announcements. Iovance is a company evaluated at the “track record stage,” where it is already selling products. It raised its annual sales outlook in late September, and major brokerage firms raised their target prices this week.

On the other hand, its prominence in the system has retreated from the previous week. There were days in early October when it fell significantly after the outlook was raised, and it also saw a decline at the end of this week.

It is still a loss-making company, and the focus is on whether sales growth can be confirmed in the earnings report in early November. Keep in mind that it is easily dragged down by the deterioration of market conditions.

Marathon Petroleum (MPC) | A stock that reflects the “mainstream” of the refining flow

It is one of the largest independent refining companies in the U.S. It is characterized by stable earnings from midstream businesses such as pipelines and aggressive share buybacks.

This is a stock that newly entered the observation target this week, and the improvement in its prominence in the system was among the largest of the observed stocks. This also overlaps with changes in the momentum of the entire industry.

It rose the most among the three major refiners in the July-September quarter. Multiple major brokerage firms also raised their target prices this week. Its large scale and generous shareholder returns make it a presence that is easily noticed by the market.

However, it has already risen significantly. If expectations are too priced in for the upcoming earnings report, there is a possibility that it will be a “sell the news” event. We will also keep an eye on the fact that the industry’s momentum is showing signs of stalling.

Comparison category: CVR Energy (CVI) | “Local/Small-cap” even in the same refining sector

This is another refining stock that entered this week. It owns refineries in the central U.S. and also operates a nitrogen fertilizer business through a subsidiary. As a small-cap stock, price movements tend to be volatile due to short-term capital.

Its prominence in the system strengthened from the previous week, and it hit a 52-week high this week. While the previous earnings report exceeded market expectations, some brokerage firms have maintained cautious investment ratings even while raising target prices. It is a state where improvements in performance and caution against overvaluation are intersecting.

Refining margins can shrink suddenly. Please be aware that because it has risen significantly in a short period, the reaction is also likely to be large.

CareDx (CDNA) | A stock where industry strength and unique factors overlap

Its main business is a diagnostic service that continuously checks for rejection in patients who have received organ transplants through blood tests. As a small-cap stock, please be aware that price movements tend to be volatile.

In addition to the strong performance mentioned last week, the uncertainty surrounding public health insurance reimbursement, which had been a burden for a long time, was resolved in a favorable way. Following this, multiple brokerage firms raised their target prices, and it hit a year-to-date high in early October.

The diagnostics and research-related sector has long been in the top tier of industry scores, and this is an observation example where industry strength and company-specific factors overlap.

However, this week, the industry fell out of the system’s continuous criteria, and the stock’s own prominence also retreated slightly. It has an earnings announcement coming up on October 29, so we are also aware that price movements tend to be large around the announcement.

Vince Holding (VNCE) | A restructuring stock with the volatility typical of small-cap stocks

It develops the U.S. apparel brand “Vince,” with wholesale and direct-managed stores/e-commerce as its two pillars. Its market capitalization is significantly smaller than other observed stocks, and price movements tend to be quite volatile due to short-term capital.

Among the new entries this week, this stock showed the strongest increase in system prominence. In August, it acquired the business operations of the Canadian brand ‘OVO,’ and in its September earnings report, it showed revenue growth and upwardly revised its full-year outlook. The stock price has multiplied several times over the past year.

However, there are many points to note. Recent profits include a one-time factor from tariff refunds. The full-scale store rollout for the new brand will not begin until 2027 or later. I am also mindful that due to low liquidity, price movements can easily reverse sharply if market sentiment deteriorates.

Summary

According to my system, this week saw heavy selling pressure on tech stocks, and across the broader market, the number of stocks testing lower levels significantly outweighed those hitting new highs. Even among representative stocks in strong sectors, fewer are maintaining an upward trend, so I am viewing the market this week with a focus on defense. My answer to the question at the beginning is: ‘The resilience in price is still at the stage of ‘just not having collapsed yet,’ and it is too early to call it strength.’ Even so, I believe there is value in recording the stocks that did not collapse during such a phase.

Compared to the previous week, the lineup of observations has clearly changed. AI-related hardware such as storage has dropped out, while oil refining and biotech/diagnostics, which are evaluated based on specific catalysts, remain. I have the impression that the relative strength of areas less susceptible to macro headwinds was easier to see this week.

However, even in those remaining areas, momentum is beginning to stall in refining and medical equipment. Selection is progressing even within strong sectors, and caution remains necessary regarding price movements driven by expectations.

The overall market is not in a climate that is easy to attack. The direction of the financial environment remains away from a loosening trend, and major indices have not gained confirmation of a rebound. The stocks mentioned this week are not trading candidates, but observation materials for monitoring market trends. Please make your own investment decisions.

While I call this a weekly report, I update it primarily during weeks when there are significant movements. Next time, I will continue to observe in the order of the overall market, sector strength/weakness, and individual stocks.

This weekly memo is based on the output of a US stock automated analysis system that I run entirely on my smartphone. For those interested in how the system is built or my daily operational flow, I have compiled them in a serialized magazine.

Find out what kind of person is writing this here

The earnings and news content in this article are organized based on company announcements and reports from sources such as Reuters and Barron’s.
This article is a market observation memo and does not recommend the buying or selling of specific stocks. Please make investment decisions at your own risk.
This text was written and edited using generative AI (Claude) based on my observation data and instructions.