Situation Awareness: Cautious. Futures currently point to a mixed open, with S&P futures 25 points below fair value and Nasdaq futures 160 points below fair value after an earlier positive lean faded, driven by a significant surge in WTI crude oil prices (+6.6%) amid renewed Middle East hostilities and geopolitical tensions. Trade mode: selective and defensive. Today’s specific context — investors are keenly awaiting the FOMC’s policy decision at 2:00 p.m. ET and Fed Chair Kevin Warsh’s press conference, with the market assigning a 64.2% probability of rates remaining unchanged, while a hawkish surprise from Citadel Securities puts everyone on alert. Regime context — 63.58% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 315 bulls vs. 369 bears. The 5-day trend shows an increasing number of stocks above their 40-day SMA but a higher number of 4% downside moves yesterday.
SIP: TER KLAC STX KO
- What’s working: The post-earnings catalyst for several stocks like TER, STX, and KO drove significant moves. The Continuation scan shows 18 signals, indicating some decent breadth in momentum plays, and Reversal also has 23 signals for potential bounces.
- Leading sectors: Energy is front and center due to oil; Technology, particularly semiconductors, faces continued pressure; Healthcare and Consumer Staples showed strength yesterday. Trend data for today is unavailable as the market is closed, but yesterday’s activity showed Health Care (+2.4%) and Consumer Staples (+2.0%) leading, while Information Technology fell 1.2%.
- Key event — The FOMC policy decision and press conference at 2:00 PM ET is the day’s primary market-moving event.
- Market read: Yesterday saw broad earnings-driven strength across many sectors offsetting continued semiconductor weakness and falling oil prices. Today, that narrative shifts dramatically with oil’s surge, increasing geopolitical risk, and the looming FOMC decision. The rotation trade favoring the equal-weighted S&P 500 (up 12.3% YTD vs. market-cap-weighted S&P 500 up 8.3% YTD) is facing another challenge.
- DEP watchlist: No signals for Delayed 9M today.
- SIPS: WAT, MELI, NUE