The Market Is Weaker Than It Looks — Here’s Why
The market is showing increasing signs of weakness beneath the surface, despite major indexes remaining relatively resilient. The TSX 60 could return to a weekly sell signal, financials are weakening sharply, gold is close to a weekly sell signal, and the Russell 2000 remains on a weekly sell signal. Market breadth is particularly concerning, with fewer than 20% of TSX stocks above their 50-day moving average and financials in the S&P 500 at just over 2%. A small group of large-cap technology stocks continues to mask broader weakness.
Investors should watch the upcoming employment numbers closely because strong economic data could increase expectations for higher interest rates, while weak data could support stocks. The FlyPaper Channel remains an important technical reference: stocks above it can continue to be bought on dips, while stocks below it often encounter selling pressure on rallies. The key message is to look beyond headline indexes and monitor breadth, moving averages, buy and sell signals, and sector leadership for a clearer picture of market health.
Stephen Whiteside
Friday, October 2, 2026
