Joel Elconin - Deteriorating Market Breadth, Bond Yield Risks, and The Rosh Hashanah Trade
The KE Report Sep 10, 2026 10:23
Summary
Broad market breadth is deteriorating as the equal-weight S&P 500 (RSP) breaks below its 50-day moving average while the cap-weighted index tests the same level.
The 'Sell Rosh Hashanah, Buy Yom Kippur' seasonal trade arrives as September-October volatility and a 10-year Treasury yield nearing 5% pressure equities.
Crude oil breaks above $100 a barrel but energy equities stay flat, signaling profit-taking and a divergence from underlying commodity strength.
Mega-cap tech and dividend defensives such as Apple, NVDA, KO, T, and VZ hold relative strength as investors rotate away from oil-exposed names.
Joel Elconin's takeaways
- Top takeaway Argues market breadth is deteriorating into the September expiration: the S&P has gone sideways-to-down since early August, the equal-weight RSP has broken its 50-day, and the S&P cash is testing its 50-day around 797 while the futures rollover adds volatility.
- Frames the timing with the 'Sell Rosh Hashanah, Buy Yom Kippur' seasonality — with the Jewish New Year starting Friday, the 10-day window has historically been mixed, and he treats it as a caution rather than a hard signal.
- Warns that the 10-year Treasury yield is back near 5% and that 'Bond Vigilantes' are pushing back on the Fed and Treasury, on top of lingering geopolitical risk (Ukraine, Russia, Iran) and an 'unrealistic' 2% inflation target.
- Says the biggest ignored risk is oil breaking out above $100/bbl — USO at new highs, crude up roughly 6% intraday — with disruption around Hormuz also lifting wheat and other commodities that the market has been treating as offset by the AI trade.
- Highlights energy as the only sector that can monetize higher oil (XLE back at its all-time high, CVX approaching all-time highs), but reads the day's flat action in energy names as profit-taking after a multi-day run rather than a thesis change.