Situation Awareness: Cautious. The major averages set fresh record highs driven by a narrow AI-led rally that overcame a sharp surge in oil prices and geopolitical tension with Iran. Trade mode for tomorrow: selective and defensive, focusing on AI infrastructure leaders while avoiding rate-sensitive sectors. Today’s defining context was the divergence between record-breaking tech valuations and broad market weakness, as oil prices jumped 5.5% on Iran-U.S. negotiation breakdowns. Regime context — 49.16% of stocks closed above their 40-day SMA (vs 56.1% prior day, regime held at Cautious), and the 4% Bull/Bear gauge shows 265 bulls vs. 140 bears. The 5-day trend turned up 3 of 5 days, signaling early recovery momentum despite underlying breadth deterioration.
SIP: NVDA MSFT DELL TMHC MGM
- Winning strategies: 2LYNCH (18 signals), D9M (13 signals), Reversal Bullish (7 signals) — continuation patterns outperformed as momentum held in tech.
- Leading sectors: Technology (+2.85%), Communication Services (+1.69%), Basic Materials (+1.12%); leading themes: Computer Hardware/Peripherals (+8.15%), Property REIT (+7.1%), Specialty Enterprise (+5.32%).
- Key event: NVIDIA and Microsoft announced a partnership for on-device AI agents, while WTI crude surged to $92.19 on Iran tensions.
- Regime threading: morning SA called Cautious (56.1%), closing is Cautious (49.2%) — held steady as tech strength masked broader market fatigue.
- DEP watchlist: TSM ($436.03), LRCX ($317.20), ZM ($111.61), MP ($69.32), NIO ($5.98).
- SIPS: BBNX ($12.81), PONY ($10.80), LRCX ($317.20), TSM ($436.03), NEXA ($16.13).
Market Breadth — 2026-06-01
| Sentiment 4% | Bullish | 40SMA | Bearish |
| Bull 4% | 265 | Bear 4% | 140 |
| % > 20 SMA | 123% | % > 40 SMA | 49.16% |
| Bull 9M | 51 | Bear 9M | 15 |