Stage 2 Uptrend, Calm Inflation: My Weekly Playbook

October 5, 2025 - Update

MACRO

The most interesting data point: inflation forecasts for September are 3%, in line with the official August reading, and 2.9% for October—slightly better. What’s notable is that inflation isn’t getting out of control. This is good because it makes the Fed’s job easier when deciding whether it can keep cutting rates.

GDP forecasts stay around 2.4% for Q3 and Q4 2025, while earnings are solid and analysts are slightly increasing their estimates.

Credit is available, so the overall backdrop remains constructive for stocks over the mid-term.

INDEX

The week closed +1.1% for the S&P 500. Below is the analysis based on Stage Analysis using AI:

Where we are (Stage)
Stage 2 (Advancing). Price is above a rising 10-, 20-, 30-, and 40-week MA with a string of higher highs/lows. Trend is intact and healthy.

Condition of the move
Momentum strong but a bit hot. Weekly RSI ≈ 70 and MACD positive—trend power is there, but it’s getting stretched.

Extension: Price sits a few percent above the 10-week MA; normal to see a pause or a dip toward that average.

Key weekly levels to watch (approx.)

• First support (10-week MA): A tag here would be a routine Stage-2 pullback.

• Stronger support / breakout shelf (20-week MA): A weekly close below here would signal a Stage-2 consolidation risk (Stage-3 watch).

• Major trend line (40-week MA): Only below this—with MAs flattening—would the primary uptrend be in doubt.

Next few weeks — implications

• Base case: Sideways or a −2% to −5% dip toward the 10-week, then attempts higher. That’s normal within Stage 2.

• Bull extension: If new highs continue without testing the 10-week, expect short, sharp shakeouts—don’t chase extended names.

• Caution case: A weekly close below the 10-week that isn’t reclaimed the following week often pulls toward the 20-week. Multiple down weeks on rising volume would raise Stage-3 risk.

How to act (investor playbook)

• Stay risk-on while price is above a rising 30/40-week.

• Prefer adds in leading stocks on pullbacks to their 10-week with support, not into extensions.

Bottom line: Primary uptrend (Stage 2) remains in control. Expect brief digestion; treat dips to the 10-week as where you want to buy leaders, and let the 20-week be your trend guardrail.

PORTFOLIOS

10X MOMENTUM PORTFOLIO

My new KRYS position is performing well at +9% in two weeks.

This week I am doing the following:

• Issuing a BUY STOP for 16 shares of KRYS if it touches $184. If triggered, my stop-loss will stay at $159. This would complete my full position in the stock. Healthcare and biotech had a strong week last week—let’s see if the trend continues.

• Issuing a BUY STOP for 15 shares of MU (Micron Technology, Inc.) if it touches $191. If triggered, my stop-loss will be at $151. This is a strong semiconductor company riding the AI boom and still has gas in the tank. MU is part of my 2025 stock picks and is up about +120% YTD.

Here is the snapshot for this portfolio since inception (about 2.5 years ago):

10X UNDERPRICED GROWTH PORTFOLIO

I was stopped out of my combined SN (SharkNinja, Inc.) position for a −2% loss. Unfortunately, the entire Consumer Discretionary sector keeps underperforming.

Here is what the portfolio looks like:

INVZ is working well at +20% in three weeks, while REAX is underperforming and getting closer to its stop-loss. I am making some purchases this week: