Situation Awareness: Cautious. Risk-off open shaping up as the global semiconductor selloff rolls into a third session and U.S.–Iran strikes push WTI crude toward $81/bbl. S&P futures sit 80 points below fair value and Nasdaq futures a brutal 562 points under fair value, with SK Hynix, Netflix and the mega-cap growth complex leading the bleed while defensives, staples and health care hold the line. Index levels are unavailable this morning (SPY/QQQ/IWM data not provided), so lean on breadth and futures for the read. Trade mode: selective and defensive — let the first hour show its hand before committing capital into a gapped-down tape. Today’s context is a tug-of-war: constructive breadth and a solid Housing Starts beat versus a narrow, ugly chip-led decline and China “AI deflation” fears out of the World AI Conference. Regime context — 68.55% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 230 bulls vs. 454 bears. The 5-day trend turned up on breadth (20-SMA participation rose from 23% to 31%, 40-SMA from 64.6% to 68.55%), but futures signal that improvement is about to be tested hard at the open.
SIP: DSGR ATAI SKHY IQST
- What’s working: Continuation/2LYNCH scan is rich with 44 signals — healthy underlying breadth despite the index tape. Reversal scan is nearly empty (1 signal: ANET), and Delayed 9M is dry (no signals).
- Leading sectors: live Trending Sector and Theme data unavailable (market closed); Sector Volatility ATR data was also empty this morning. Read breadth off the 40-SMA gauge instead — participation expanded +4.0pp day-over-day.
- Key event: U.S. continues to strike Iran; WTI crude +2.2% to $80.68/bbl — energy is the one clear macro tailwind. June Housing Starts jumped 19% to 1.427M, beating the 1.328M consensus.
- Market read: yesterday’s tape was a two-track market — S&P -0.5%, Nasdaq -1.5%, but Equal Weight +1.0% and staples +2.9%. Rotation is intact; the problem is concentrated mega-cap and chip damage that dictates the index print.
- DEP watchlist: no D9M signals today — nothing qualifying on the Delayed 9M scan, itself a caution flag on fresh momentum breakouts.
- SIPS: TFII (+7.1%), MCK (+5.7%), ODFL (+5.3%) — continuation names showing relative strength away from tech.