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Briefing Morning Report
Futures are climbing into Tuesday’s open, with the S&P 500 futures up 22 points at 6,925—just shy of the critical 50-day moving average at 6,895.87. This comes after Monday’s solid recovery session that clawed back most of the prior day’s weakness. Global markets provided strong tailwinds overnight, with Japan’s Nikkei surging +2.2% to fresh records and South Korea’s Kospi adding +1.9%, while European markets extended their own record-breaking runs. The State of the Union address yesterday provided a stable backdrop, and Treasury Secretary Bessent’s comments that the 15% global tariff “won’t be permanent” helped ease concerns, even as China’s Ministry of Commerce threatened countermeasures.
Today’s headline event is NVIDIA’s earnings after the close—the market’s most anticipated report this quarter. Software stocks rebounded yesterday on bargain hunting after Monday’s selloff, with Anthropic’s Claude Cowork plugin news providing a catalyst. However, some cracks appeared in pre-market action: HP Inc (HPQ) dropped -5.7% on weak guidance, Lowe’s (LOW) fell -3.6% on cautious FY27 outlook, and Workday (WDAY) plunged -9.7% despite a beat. Oracle (ORCL) bucked the trend with a +2.4% gain on an Oppenheimer upgrade. The earnings calendar remains heavy with Salesforce (CRM) also reporting after the bell, setting up a critical test for the software sector’s recent bounce.
The macro backdrop shows moderating inflation globally—Eurozone CPI came in at 1.7% year-over-year (vs 1.9% prior), and core CPI at 2.2%—while Australia’s hotter-than-expected 3.8% CPI reading sparked speculation of three rate hikes from the RBA. Treasury yields are stable, crude oil is up $0.51 at $66.14, and precious metals are surging with gold at $5,201.90 (+$25.60) and silver at $91.06 (+$2.93). This flight to safety in metals alongside equity strength suggests investors are positioning for volatility around tonight’s NVIDIA print while maintaining constructive exposure.
Market Health
Market breadth painted a decisively bullish picture on Monday, with the 4% Sentiment indicator reaching “Very Bullish” territory as Bull 4% clocked in at 360 versus just 95 bears. This represents a dramatic shift from the defensive posture seen earlier in the week. The percentage of stocks above their 20-day moving average surged to 69%, while 59.73% now trade above their 40-day MA—both healthy expansion signals. The 20% breadth study (Bull 20%: 69, Bear 20%: 33) confirms this broad participation, though it’s worth noting we’re not yet at extreme overbought levels that would trigger caution. The 9-month breadth (Bull 9M: 36, Bear 9M: 9) shows a 4:1 ratio favoring bulls on the longer-term trend, supporting the BTFD thesis that dips remain buyable in this Fed-supported environment.
Sector rotation tells a compelling story of economic confidence returning. Technology (RSPT) bounced back with a +1.26% daily gain, rising to 0.98 on the momentum scale and hitting the 73rd percentile—a solid 2LYNCH continuation environment. Industrials (RSPN) remain the standout leader at 3.49 (76th percentile), while Energy (RSPG) holds strong at 3.77 (81st percentile) despite crude’s range-bound action. The defensive pivot is notable: Utilities (RSPU) have rocketed to 4.18 (98th percentile), signaling either rate-cut expectations or hedging behavior. Meanwhile, Financials (RSPF) have weakened sharply to -1.07 (3rd percentile) and Communication Services (RSPC) sits at -0.62 (24th percentile), reflecting tariff uncertainty and the Monday software selloff. Consumer Discretionary (RSPD) at 0.93 remains flat, suggesting caution on the consumer despite strong employment. This sector mix—cyclicals and defensives both strong—indicates a market preparing for an inflection point, likely around tonight’s NVIDIA catalyst.
Strategy Signals
The 2LYNCH continuation scanner has delivered 166 signals, with aerospace and mining names dominating the top ranks—both classic late-cycle plays. FTAI Aviation (FTAI) leads with a powerful +6.9% move on 1.3x relative volume, showing the 5.2 ATR%-M that defines explosive continuation setups. Forum Energy (FET) surged +5.9% on 2.0x volume in the energy complex, while Coca-Cola Consolidated (COKE) jumped +5.3% in consumer staples—proof that PLASTICS sectors aren’t the only game in town. The aerospace cluster (CRS at +1.9%, CW at +1.9%, both with institutional backing) reflects defense budget optimism and reshoring themes. Notably, mining stocks like Coeur Mining (CDE, +1.4%) and Century Aluminum (CENX, +3.2%) are showing up, correlating with precious metals’ surge to new highs. These continuation signals work best when you let winners run—ABC means not overthinking these technical breakouts when breadth confirms the move.
The D9M (9-month breakout) scanner flagged 167 signals, highlighting deep-value reversals and distressed turnarounds. PayPal (PYPL) rocketed +6.7% on 1.7x volume with institutional ownership, finally breaking its multi-month base after restructuring progress. Corning (GLW) gained +4.4% with a massive 10.6% ATR%-M and institutional support—a MAGNA53 candidate if it gaps on news. The mining theme persists here too: First Majestic Silver (FSM), Kinross Gold (KGC), Silvercorp Metals (SVM), and First Majestic (AG) all appear, riding the $5,200 gold wave. The standout oddball is AXTI, which exploded +23.4% on 1.4x volume with 153.8% risk—a chip-adjacent play that likely caught algorithms off-guard. For D9M setups, CRT (Controlled Risk Taking) is essential: these are higher-beta names emerging from technical purgatory, so position sizing must account for the 80-150% ATR risk profiles.
Reversal signals numbered 267, but the quality is mixed—insurance and ETF noise dominate. The actionable standout is Zoominfo (ZD), which crashed -10.3% on 7.4x volume, creating potential FFM (Find Free Money) opportunity if support holds at the $25 level with tight risk. Otherwise, this scan reflects portfolio rotation churn rather than clean entries. The 20% Study surfaced niche opportunities in levered ETFs (PYPG, BEX) and aerospace micro-cap FJET—all speculative plays outside the core WaveRider methodology. Today’s signal set is clear: stick with 2LYNCH continuations in aerospace/energy/materials, cherry-pick D9M institutional reversals in fintech and metals, and avoid the reversal noise unless you see sub-2.5% risk setups.
Today’s Watchlist
- NVDA — The axis mundi of this market; earnings after close will set February’s tone for all of tech, watch $194 pre-market base
- CRM — Salesforce reports after close; software sector’s fate hinges on guidance after Monday’s Anthropic-fueled bounce
- FTAI — Aerospace leader with +6.9% 2LYNCH continuation signal, 1.3x RVol, institutionally owned—let this one run
- PYPL — D9M breakout +6.7% on restructuring progress, institutional ownership confirms accumulation, watch $47.50 pivot
- GLW — Corning’s +4.4% D9M move with 10.6 ATR%-M and INST tag suggests major positioning ahead of display cycle turn
Action Codes of the Day
- 2LYNCH — 166 continuation signals with aerospace (FTAI, CRS, CW) and energy (FET) leading; breadth at 69% confirms follow-through environment
- T3A — Think 3 Days Ahead: NVDA earnings tonight will dictate Wednesday-Friday flow; position before the print or wait for the dust to settle
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