Midday Wave #48 Bearish

Midday Wave #48: The Great Divergence: When Trends Lie – Monday 5/18/2026

May 18, 2026 2:35

Tickers Mentioned

DHX FFIV OIH BSX ONTO OKTA HIVE LITE ROLR RSPT

Episode Summary

Sentiment has collapsed to bearish levels despite an improving intermediate trend, creating a dangerous divergence. Host and Analyst break down the 27-point breadth crash, identify defensive sectors like Energy, and provide a critical afternoon pivot strategy for traders.

Key Takeaways

20-day SMA breadth collapsed 27 percentage points to 29%
DHX surges 7.5% with 3.3 RVOL in Internet sector
Energy sector leads with OIH up 2.9% to $453.12
Very Bearish sentiment at 4% despite 40-day SMA gain
FFIV and OIH show strongest continuation signals today

Midday Wave Update: May 18, 2026

Midday Situation Check

Very Bearish regime — Sentiment at 4% with 49.06% of stocks above the 40-day SMA, a 1.8 percentage point increase from yesterday, while only 29% remain above the 20-day SMA, a sharp 27 percentage point drop.

Market Recap — Session So Far

Market breadth is diverging as short-term momentum collapses while intermediate trends show slight resilience, with index prices currently unavailable for specific levels.

Breadth shows 163 bulls versus 371 bears on the 4% signal, indicating a heavy bearish skew despite the 40-day SMA improvement.
The 20-day SMA participation has plummeted to 29% from 56% yesterday, signaling a rapid deterioration in short-term trend health.
Volume and price action are dominated by defensive rotation, with Energy and Financials showing relative strength while Consumer Discretionary falls.

Momentum Watch — Breakout Continuation & SIP

DHX leads the session with a 7.5% gain and 3.3 RVOL, trading at $3.88 in the Internet sector.
FFIV shows strong continuation with a 4.6% move to $379.30, supported by 0.6 RVOL in the Internet sector.
New SIP entry HIVE is up on subsidiary news, trading at $2.69 with a 0.57 RVOL in the Finance-Crypto sector.
OKTA sees a price target raise, pushing the stock to $82.77 with a 0.87 RVOL in the Software sector.

Strategy Check — Continuation, SIP & 20% Study

OIH is the strongest ETF signal, up 2.9% to $453.12 with 0.8 RVOL, riding the rising Energy sector trend.
SIP flow highlights BSX gaining on buyback news at $52.68, while ONTO faces pressure from a convertible notes offering at $271.77.
The 20% Study from May 15 shows LITE at $970.70 with 1.59 rel volume, sitting between demand and supply zones in Telecom.
ROLR remains a key watch from the 20% study at $5.54, currently testing near demand levels in the Leisure sector.

Quick Takes & Wrap-Up

DHX: Watch $3.88 closely; a break above could confirm the 7.5% breakout momentum for the afternoon.
FFIV: Monitor $379.30 for sustained volume; failure here may signal a fade of the 4.6% intraday gain.
Overall bias remains cautious as the 27pp drop in 20-day SMA breadth outweighs the slight 40-day SMA recovery.

Welcome to WaveRider Midday Wave, your mid-session market intelligence. Let's dive in. How can sentiment collapse to 4% while the 40-day moving average actually improves? It's wild, right? The answer lies in a massive drop in short-term participation. Exactly. We're talking a 27-point drop. 27 points? That flips the whole regime. It does. We just shifted to very bearish. So the trend is up, but the mood is crushed? Basically. The 40-day SMA is up a point and a half. To 49.06%. Right, but only 29% are above the 20-day. That's a 27-percentage-point crash. Huge. And look at the breadth. 163 bulls versus 371 bears. Yeah, it's like a car accelerating on the highway while slamming the brakes. That visual is... That's the disconnect. Precisely. The intermediate trend is green, the short term is red. So which sectors are actually defying this sell-off? While we're seeing a defensive rotation. Energy and financials? Rising. Consumer discretionary is falling hard. Okay so are morning breakout plans still valid Honestly probably not for the broad market But there are islands of strength Oh definitely Look at DHX DHX is up 7 Yeah, 3.3 relative volume at $3.88. That's a lot of volume for a stock that size. And FFIV is moving 4.5%. At $3.79. Exactly. Plus a new entry in Hive at $2.69. New news drove that? Subsidiary news. And light and roller are holding demand zones. Light is near 970. Right, but volume is the only thing keeping them afloat. So what's the afternoon adjustment here? You have to pivot. Abandon the morning continuation plans? Yes, completely. And focus on resistance levels for the close. Exactly. Watch the defensive leaders like energy. Because the 27-point breath drop outweighs the trend recovery. It does. It invalidates the intermediate trend. So traders need to pivot to defense immediately. Agreed. Wait for the close before re-entering longs. Review your risk exposure right now. And wait. The great divergence is real and the break is on. Stay safe out there. Thanks for listening to WaveRider Midday Wave. That's all for today's episode of WaveRider Midday Wave, your mid-session market intelligence. See you next time.

Next Day Prep #271 Neutral

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Midday Wave Update: May 18, 2026

Midday Situation Check

Market Recap — Session So Far

Momentum Watch — Breakout Continuation & SIP

Strategy Check — Continuation, SIP & 20% Study

Quick Takes & Wrap-Up

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