Closing SA — 2026-08-12

Situation Awareness: Cautious. An in-line July CPI cleared the week’s biggest macro hurdle and reignited the AI momentum trade — the Nasdaq (+0.54% to 26,609.51) and S&P 500 (+0.26% to 7,748.50) closed higher while the Dow finished flat (-0.04% to 53,770.27); the PHLX Semiconductor Index jumped 2.5% on blowout post-earnings moves. SPY/QQQ/IWM technical levels are (data unavailable) today, so index MA positioning cannot be confirmed. Trade mode for tomorrow: selective and constructive — lean into semis/AI strength but respect mega-cap dispersion and the PPI print at 8:30 ET. The tape was defined by a narrow, two-speed market: chips and AI infrastructure ripped while non-semi mega-caps (META -3.38%, AMZN -1.83%, TSLA -1.59%) sagged. Regime context — 57.8% of stocks closed above their 40-day SMA (vs 60.1% prior day, regime held at Cautious), and the 4% Bull/Bear gauge shows 231 bulls vs. 115 bears. The 5-day trend shows breadth cooling day-over-day even as headline indices rose, a divergence that keeps the regime firmly Cautious rather than Bullish.

SIP: SMCI CRWV LITE DELL HPE

• What’s working: Continuation breakouts (2LYNCH: 24 signals), Darvas Box: 32, Reversal Bullish: 7, D9M: 4, 9M Catalyst: 2 — trend-continuation and box breakouts dominated the tape.
• Leading sectors: Energy (+0.43%), Real Estate (+0.27%), Healthcare (+0.15%); leading themes: Consumer Electronics (+7.09%), Generic Drugs (+3.67%), Managed Care (+3.15%).
• Key event: In-line July CPI (headline +0.1%, core +0.2%) cut September rate-hike odds to ~40% and re-energized AI/semiconductor names.
• Regime threading: morning SA called Cautious (60.1%), closing is Cautious (57.8%) — held, as breadth softened but stayed comfortably in the 40-65% band.
• DEP watchlist: SMCI $37.58, HPE $58.79, DLR $197.09, MDLZ $62.17 — the D9M cohort skews toward AI-hardware momentum.
• SIPS (Continuation swing candidates): FOUR $43.89, DRI $227.72, HUM $388.71, LGN $68.64.