Situation Awareness: Bearish. Friday closed higher across the board — S&P 500 +0.5%, Nasdaq +0.5%, DJIA +0.9%, Russell 2000 +0.1% — as a 2.7% crude oil collapse to $92.17 and encouraging U.S.-Iran Strait of Hormuz talks broadened a rally that mega-caps and semiconductors led all week; SPY/QQQ/IWM technical levels are (data unavailable) today, so we lean on breadth and the briefing narrative. Trade mode for tomorrow: selective and defensive — respect the narrow leadership and elevated yields even as the tape looks green at the headline. The defining context was a “resilient headline, rotting core” market: the cap-weighted S&P is up on the month while the equal-weight is down 3.8%, the Russell is down 4.0%, and eight of eleven sectors are lower on the month. Regime context — 20.89% of stocks closed above their 40-day SMA (vs 20.4% prior day, regime held at Bearish), and the 4% Bull/Bear gauge shows 105 bulls vs. 105 bears. The 5-day trend shows a modest bounce in the mega-cap indexes but a deteriorating short-term breadth reading (% above 20 SMA fell from 42% to 35%), confirming leadership is narrowing, not broadening.
SIP: MSFT AKAM COST META
- What’s working: continuation setups dominated — 2LYNCH: 21 signals (chip-heavy: ADI, CRDO, LRCX, TXN, MPWR), D9M: 5 (CRDO, ON, SMCI, DKNG), 9M Catalyst: 6 (CRDO, MCHP, ON, QCOM, PYPL, SMCI), Reversal Bullish: 0.
- Leading sectors: Basic Materials +0.39%, Industrials +0.39%, Consumer Cyclical +0.27%; leading themes: Heavy Construction +8.89%, Steel Producers +3.49%, Air Freight +2.29%.
- Key event: crude’s $2.51 reversal on Iran’s 7-day Hormuz reopening offer flipped the tape green intraday and let all five major averages finish higher and positive for the week.
- Regime threading: morning SA called Bearish (20.4%), closing is Bearish (20.9%) — held; the marginal uptick in 40-SMA breadth is noise against a 7pp drop in 20-SMA breadth.
- DEP watchlist: CRDO $210.86, ON $77.18, SMCI $43.26, QCOM $202.04, MCHP $78.64.
- SIPS: LRCX $315.33, TXN $277.96, TT $454.36 from the Continuation scan.
Market Breadth — 2026-09-25
| Sentiment 4% | Neutral | 40SMA | Oversold |
| Bull 4% | 105 | Bear 4% | 105 |
| % > 20 SMA | 35% | % > 40 SMA | 20.89% |
| Bull 9M | 13 | Bear 9M | 6 |