Closing SA — 2026-08-13

Situation Awareness: Cautious. A softer-than-expected July PPI (0.0% headline vs. 0.1% consensus, core 0.2% vs. 0.3%) followed Wednesday’s tame CPI and pushed the S&P 500 to fresh record territory, crossing 7,800 for the first time and closing +0.65% at 7798.99, with the Nasdaq +0.81% at 26824.05 and the Dow eking out +0.13% at 53839.99; SPY/QQQ/IWM technical levels are (data unavailable) today, so we lean on the index prints from the briefing. Trade mode for tomorrow: selective and constructive — stay long leaders but respect the afternoon rotation out of semis into software. The defining context was disinflation quieting September rate-hike odds (34.6% now vs. 40.6% pre-PPI, 55% a week ago), softer oil (WTI -2.6% to $81.06), and lower yields (10-yr 4.64%). Regime context — 61.19% of stocks closed above their 40-day SMA (vs. 60.7% prior day, regime held at Cautious), and the 4% Bull/Bear gauge shows 266 bulls vs. 139 bears. The 5-day trend pushed to record highs, signaling constructive but narrowing momentum as breadth held rather than expanded.

SIP: WDAY NFLX SNDK COHR

• What’s working: Continuation (2LYNCH) fired 25 signals, D9M 14, Reversal Bullish 8, Darvas Box 31 — trend-following software and financials dominated the tape.
• Leading sectors: Technology +1.28%, Communication Services +0.97%, Energy +0.53%; leading themes: Specialty Steel Alloys +6.38%, Database Software +5.54%, Medical Software +4.52%.
• Key event: Workday (WDAY) surged +17.78% on Reuters report Silver Lake is in talks to acquire it, sparking a 3.1% jump in the IGV software ETF and a midday rotation out of semis.
• Regime threading: morning SA called Cautious (60.7%), closing is Cautious (61.2%) — held, as breadth stayed flat even while the index hit records, a sign of narrow leadership.
• DEP watchlist: FIG, CSGP, TTD, ADBE, CRM for tomorrow’s continuation setups.
• SIPS: CRM, ADBE, FDX from the Continuation scan as swing candidates.