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Market Awareness

Situation Awareness — 2026-11-06

By WaveRider AI1 min read

Situation Awareness: Cautious. The AI-infrastructure unwind has become a market-wide de-risking event. Thursday’s S&P 500 (-4.4%), Nasdaq (-5.5%) and DJIA (-3.4%) losses were the worst since April 2025 and pushed the Nasdaq into correction. SPY at $733.00 is sitting on its 20-day low ($732.95) and just above its SMA200 ($730.37). QQQ at $647.05 is well below its SMA200 ($680.84) with RSI at 26.9. Trade mode: selective and defensive, with small size and confirmation required. A bounce attempt is underway, but the October payrolls report at 8:30 ET lands with a 75% priced probability of a December rate hike, and that will decide whether the bounce holds. Regime context: 52.56% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 137 bulls vs. 1270 bears. The two sessions of breadth data available show a sharp break: the 40 SMA reading fell 10.0pp in one day and the 20 SMA reading collapsed from 95% to 64%. That is a fresh momentum breakdown, not yet a sustained downtrend.

SIP: HTZ PENG NXH

  • What’s working: very little. Continuation/2LYNCH produced only 2 signals, Reversal produced 3 and Delayed 9M produced none. That is a dry scan environment.
  • Leading sectors and themes: trending sector and theme data is unavailable (market closed), and Sector Volatility ATR data returned empty. No sector leadership read is possible from WaveFinder this morning.
  • Key event: October Nonfarm Payrolls at 8:30 ET. Consensus is 65K vs. 29K prior, and the December hike odds sit at 75%.
  • Market read: Thursday’s selling spread from semis into mega-cap growth, software, industrials and consumer names, and all 11 sectors finished lower. Futures have faded from +25 to +4 on the S&P, so expect a fragile, two-sided open.
  • DEP watchlist: no Delayed 9M signals today.
  • SIPS: VRSK, CASY