Situation Awareness: Cautious. Tech-led melt-up meets a policy checkpoint — Thursday’s tape was a narrow, semiconductor-and-software affair (Nasdaq +1.6%, S&P 500 +0.7%, DJIA +0.2%) with info tech the ONLY S&P sector to close green (+3.4%), and now futures are giving some of it back ahead of the day’s marquee event. S&P futures sit roughly 6-13 points below fair value with Nasdaq futures off 71-108 points as the market waits on Fed Chair Kevin Warsh’s 10:00 ET Jackson Hole keynote — his first major address outside an FOMC presser. Trade mode: selective and watchful, respect the event risk and let the 10:00 speech clear before committing size. The dominant force is rates, not earnings: the CME FedWatch tool assigns a 36% probability to a 25-bp HIKE at September’s FOMC, a stunning reversal from January when two cuts were priced. Regime context — 52.61% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 259 bulls vs. 112 bears. The 5-day trend is mixed: short-term breadth turned up sharply (20-SMA participation +9pp to 46%) while the 40-SMA reading slipped -2.7pp, signaling a bounce riding on narrow leadership rather than broad conviction.
SIP: GAP AFRM
- What’s working: Continuation/2LYNCH scan is rich with 21 signals — healthy breadth of individual setups even as the index tape narrows. Reversal scan is thin at 4 names; Delayed 9M produced no fresh signals despite 34 names on the Bull 9M list.
- Leading sectors (live market closed — using signal concentration): ENERGY (CHRD, OBE) and BUSINESS SERVICES (RDVT, FDS) dominate the continuation tape; AEROSPACE/DEFENSE (AVAV, RKLB) shows repeat presence across both continuation and reversal scans.
- Key event: Fed Chair Warsh’s 10:00 ET Jackson Hole keynote is the single biggest catalyst on the calendar — with a September hike near one-in-three, any hawkish tilt hits duration and richly-valued tech hardest.
- Market read: Thursday’s advance was almost entirely tech-driven — the S&P 500 Equal Weighted Index fell 0.3% even as the cap-weighted index rose. That divergence is a warning: breadth is thin, and a hawkish Warsh could pull the rug from the only sector holding the tape up.
- DEP watchlist: No fresh Delayed 9M signals today — stand down on episodic-pivot entries and wait for the scan to reload.
- SIPS: CHRD ($145.99, +4.2%), AVAV ($152.28, +3.7%), RDVT ($72.00, +3.6%) lead the continuation swing candidates.