October was another strong month for stocks, with major indexes continuing their advance. Both price and trend structure remain positive, with the Nasdaq 100 and S&P 500 holding above key moving averages and within established uptrending channels.However, not everything beneath the surface is ideal. While the broader trend remains bullish, market breadth continues to be poor, momentum is diverging negatively with major indexes, and those indexes are extended to the upside. Overall, the technical evidence continues to favor the bulls, but the combination of stretched momentum and weakening breadth suggests that the odds of a healthy, short-term pullback are elevated. For now, the trend remains up, and as long as the major indexes hold above support, the longer-term path of least resistance remains higher.Nasdaq 100 - Still Bullish, But Due for a PauseThe Nasdaq 100 (QQQ ETF) remains in a strong uptrend that began in May. The chart below shows the index trading within a rising channel, with support coming from both the lower boundary of that channel and its 50-day moving average. The index is currently near the upper edge of that channel, which has served as a zone of rising resistance.In the lower panel, RSI (Relative Strength Index) shows a negative divergence. This indicates that while prices have moved higher since mid-September, momentum has weakened. This type of divergence can sometimes precede short-term pauses or pullbacks.Overall, the trend remains bullish as long as the index trades above its 50-day moving average and within its rising channel. A decisive move below either of those support levels, however, would suggest that the market’s character is changing and that a deeper correction could follow. For now, the uptrend remains intact, but conditions warrant some near-term caution.Risk-On Leadership Confirms Bullish Market ToneThe second chart compares five key risk-on sectors and industry groups against the defensive Consumer Staples sector (XLP). All five have continued to trend higher, showing strong relative strength and confirming that investors are favoring growth and risk-oriented areas of the market.This type of broad risk-on participation is what typically drives healthy bull markets. It’s also important to note that these same areas commonly weaken before major corrections as money begins rotating into defensive sectors. Since we are not seeing that kind of rotation now, it reinforces the view that the longer-term trend remains bullish.Market Breadth NarrowsThe third chart tracks the percentage of S&P 500 stocks trading above their 50-day moving averages. While the index itself has continued to climb over the past month, market breadth has weakened. Currently, only 41% of the stocks in the index remain above their 50-day averages. Fewer individual stocks are participating in the market’s advance.Contracting breadth is something worth monitoring. For now, the major trend remains bullish, but continued narrowing participation would warrant a more cautious stance moving forward.Client Account UpdateEquity allocations were partially reduced in late October as we took profits in several strong performers, including GDX, XME, OKLO, and RGTI. Each of these positions began to show signs of short-term weakness after substantial gains, so trimming exposure helped lock in profits while reducing potential downside risk.For now, most of the proceeds from those sales remain in cash. The market is extended in the short term, and holding a larger-than-usual cash position provides both flexibility and protection should a normal pullback occur. Once market conditions improve, I will look to redeploy that cash strategically into stocks showing renewed strength.I have also added a partial hedge through index short positions to help offset any short-term market weakness that could impact our existing holdings. Meanwhile, our core positions continue to behave well, and I plan to add to them selectively when technical setups and risk/reward conditions become more favorable.