Situation Awareness: Cautious. The market is attempting a technical bounce following the worst session of the week, defined by a sharp tech-led reversal yesterday that lacked broader market support. Trade mode: Selective and defensive. The tape is reacting to a complex mix of geopolitical escalation in the Middle East and lingering concerns over equity supply for AI funding. Regime context — 50.82% of stocks trade above their 40-day SMA, a contraction from yesterday’s 52.34%, and the 4% Bull/Bear gauge shows 0 bulls vs. 0 bears, indicating a neutral but fragile sentiment floor. The 5-day trend shows a consistent down sequence over the last two sessions, confirming downward momentum in the technology sector despite today’s futures lift.
SIP: SMCI ORCL CHWY CBRL
- What’s working: Continuation signals are sparse with only 7 high-quality setups, suggesting a lack of broad participation; the Reversal scan is equally dry with just 1 signal.
- Leading sectors: Software and Semiconductors are showing pre-market strength despite yesterday’s sell-off; Consumer Staples and Energy are defensive laggards holding up due to oil volatility; Transportation is under pressure from rising fuel costs.
- Key event: U.S. military strikes on Iranian defenses and radar sites near the Strait of Hormuz, with Iran retaliating against Kuwait, Bahrain, and Jordan.
- Market read: Yesterday’s tape was defined by a midday reversal in tech names without broader support, sending the Nasdaq down 2.0% and the S&P 500 down 1.6%. The market is now trying to find a bid despite the geopolitical headline risk.
- DEP watchlist: MRK (Reversal signal), VRNS, CASY (2LYNCH setup).
- SIPS: ODFL, JBHT, TRGP (Continuation candidates in volatile sectors).