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Navigating the Era of Cautious Optimization · The SPY Trader

• 0:00
  Hello everyone and welcome to another episode of Spy Trader!
• 0:03
  I am your host, Sunny Portfolio, bringing you the latest updates from the trading floor as we navigate these interesting times together.
• 0:10
  It is 2:30 pm on Monday, October 19th, 2026, here on the Pacific coast, and we are just two weeks away from the 2026 Midterm Elections.
• 0:18
  As we get closer to November 3rd, we are definitely seeing that classic preelection waitandsee volatility, but do not let that rattle you.
• 0:26
  We are currently in an era I like to call Cautious Optimization.
• 0:30
  The market is moving past the pure hype of the AI Integration years and is now looking for real, concrete earnings.
• 0:37
  Right now, the S&P 500, tracked by SPY and VOO, is showing a solid yeartodate gain of about 9.2 percent.
• 0:44
  The techheavy Nasdaq100, or QQQ, is still leading the pack at 13.5 percent.
• 0:50
  This is largely thanks to the Federal Reserve holding interest rates steady at 3.75 to 4 percent for the third meeting in a row.
• 0:58
  With inflation stabilized at 2.1 percent, we are seeing a much more predictable environment.
• 1:03
  In fact, the yield curve has finally uninverted, which has been a nice tailwind for the Financial Select Sector SPDR Fund, also known as XLF.
• 1:12
  In the world of tech, it is all about Edge AI now.
• 1:15
  We got news this morning that Apple, ticker AAPL, is seeing recordbreaking preorders for the Vision Pro 3 and iPhone 18.
• 1:23
  Their new NeuralOS processes data entirely ondevice, which is a game changer for privacy.
• 1:29
  This news has kept the technology sector, or XLK, as our top performer this month.
• 1:34
  We are also watching Nvidia, NVDA, as they move into Sovereign AI, helping nations build their own localized models.
• 1:41
  Not to be outdone, Healthcare is our second strongest sector.
• 1:45
  Last week, clinical data showed that GLP1 drugs from Eli Lilly and Novo Nordisk might significantly reduce the incidence of Alzheimer’s.
• 1:52
  This news has propelled the Health Care Select Sector SPDR Fund, XLV, to outperform the general market over the last 90 days.
• 2:00
  For those of you looking for steady income, the Vanguard Real Estate ETF, VNQ, is seeing a recovery in data centers and logistics, offering a 4.5 percent dividend yield that looks pretty attractive right now.
• 2:12
  So, what is the game plan for your portfolio?
• 2:15
  For a core, allweather strategy, I recommend a barbell approach using the Vanguard Total Stock Market ETF, or VTI.
• 2:23
  It gives you exposure to smaller companies that are finally catching up now that borrowing costs are stable.
• 2:29
  You might pair that with the iShares Core U.S. Aggregate Bond ETF, AGG, for some stability.
• 2:34
  If you want to lean into growth and that Edge AI cycle, Apple and Microsoft are the standout stock examples, while the Invesco QQQ Trust remains the most efficient way to capture highmargin software growth.
• 2:46
  If you are worried about a slowdown in 2027, take a look at longterm bonds through TLT, the iShares 20 plus Year Treasury Bond ETF.
• 2:54
  It is a great hedge if the Fed starts cutting rates next year.
• 2:58
  Finally, if the political noise in the U.S. is getting to be too much, consider diversifying internationally with the Vanguard FTSE Emerging Markets ETF, VWO, which focuses on growth in Southeast Asia.
• 3:09
  Looking ahead, keep your eyes peeled for earnings reports from Tesla and Amazon later this week.
• 3:14
  Those numbers will tell us if these high tech valuations are actually backed by realworld AI revenue.
• 3:20
  If they miss the mark, we could see a quick 3 to 5 percent correction in the Nasdaq before the election.
• 3:26
  That is all for this update!
• 3:28
  Stay calm, stay diversified, and I will see you back here in a few hours.
• 3:32
  Happy trading!