AJB Capital

The cap-weight reading on the S&P is +1.2 this morning, down from +22 Monday. Equal weight is -91. The daily pulse went negative on every index, the S&P, the Nasdaq and the Russell.

Two sectors are still positive. Healthcare at +8 and technology at +5. Financials are -35, with one name breaking out against 36 breaking down. Consumer cyclical -24, industrials -17, real estate and utilities both negative with zero breakouts between them.

Rates are driving the damage. The 10-year is 5.15% and the 30-year is 5.44%, the highest since 2004. Wednesday's five-year auction priced at 5.03%, with the second-largest tail on record and the weakest demand since 2018, and flash PMIs came in at 57 and 58.7, with input costs at a four-year high. Seven-year paper gets sold this afternoon. The MOVE index is at 95, its highest since April. October hike odds are 73%. Mortgage rates just hit a one-year high.

Oil is feeding that rather than offsetting it. Brent closed up 3.9% Wednesday on the same day Saudi Ara

Three central banks raised rates inside of eight days, and the market went up. That tells you what's actually driving this tape, and it isn't the Fed. It's the price of oil.

Yesterday JPMorgan's commodity desk, the one the rest of the Street reads, put out a note saying it no longer has a baseline view on oil. First time since the war started. Their words: "We simply don't know how to model the endgame." Every threshold they assumed would force a deal has been crossed. $100 crude didn't do it. $5 gasoline didn't. Four percent inflation and a 10-year over 5% didn't. Ten million barrels a day are disrupted and there's no exit in sight.

Their fair value on Brent is $90. It trades at $106. That's $16 of fear in every barrel, and fear is the one input that can leave overnight. The State Department approved visas yesterday for Iran's president and foreign minister to attend the UN meeting in New York next week. That's the first door either side has opened in months.

So both tails are live. A he

We come in under a full red signal. The S&P is -20 on cap weight and -64 on equal weight. The Nasdaq is -5 and -16. The Russell is -40 and -53 and has been red for a week. Every one of those is a confirmed bearish reading. Nothing on the board is green except energy and health care, and energy is the only one with real breakouts.

Two things happened over the weekend.

Saudi Arabia shut the East-West pipeline after drone strikes on the pumping station Friday. That line runs from the Gulf coast to the Red Sea, and with Hormuz closed it was the only way to get Saudi crude out. It was carrying about 5 million barrels a day. There's no other route. Brent gapped up at the Sunday open and is above $107 this morning. The Oman meeting on reopening the strait was postponed with no new date.

Then Dario Amodei at Anthropic published an essay Saturday calling for the industry to slow the pace of AI development. Sam Altman and Elon Musk both said they agree with him. The AI trade got sold on it. Nasdaq