Situation Awareness: Cautious. Mega-cap tech shrugged off a hotter-than-expected PPI report to push the S&P 500 and Nasdaq to fresh record highs, while rate-sensitive sectors lagged as Treasury yields rose. Trade mode for tomorrow: Selective and defensive, focusing on high-conviction mega-cap leaders while avoiding rate-sensitive laggards. The market’s defining context was the “buy the dip” mentality in AI and semiconductors overriding inflation fears. Regime context — 50.66% of stocks closed above their 40-day SMA (vs 58.9% prior day, regime held at Cautious), and the 4% Bull/Bear gauge shows 196 bulls vs. 206 bears. The 5-day trend shows a recovery from Tuesday’s sell-off, confirming that the broader uptrend remains intact despite narrow participation.
SIP: ON NVDA GOOG META F TSEM BABA
- Winning strategies: 2LYNCH: 14 signals, D9M: 14 signals, Reversal Bullish: 7 signals — continuation patterns in tech dominated.
- Leading sectors: Communication Services (+2.7%), Technology (+1.0%), Health Care (+0.7%); leading themes: Auto Manufacturers (+3.69%), Solar Energy (+3.68%), Commercial Loans (+2.75%).
- Key event: April PPI surged 1.4% (consensus 0.4%), yet mega-cap tech rallied, with NVIDIA leading on China trade news.
- Regime threading: morning SA called Cautious (58.9%), closing is Cautious (50.7%) — held as buyers stepped in on inflation data, but breadth narrowed significantly.
- DEP watchlist: F, BABA, TSEM, ON, NVDA — all showing strong momentum or reversal setups.
- SIPS: BTDR, ARGX, HEI — continuation candidates with institutional support.
Market Breadth — 2026-05-13
| Sentiment 4% | Neutral | 40SMA | Bearish |
| Bull 4% | 196 | Bear 4% | 206 |
| % > 20 SMA | 80% | % > 40 SMA | 50.66% |
| Bull 9M | 28 | Bear 9M | 20 |