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Briefing Morning Report
U.S. equity futures are signaling a muted open this morning after NVIDIA’s highly-anticipated earnings landed with a beat-and-raise that initially sparked after-hours enthusiasm, but has since cooled to modest gains. NVDA sits at $198.60, up just 1.5% in pre-market after CEO Jensen Huang delivered reassuring commentary about AI’s impact on software companies—a direct counter to Monday’s sharp selloff in that group. While NVIDIA’s data center revenue surged 75% year-over-year to a record $62.3 billion, the market’s subdued reaction suggests traders are either digesting the magnitude of expectations already priced in or waiting for confirmation that the AI infrastructure build-out can sustain this pace. Salesforce (CRM $185.90, -3.1%) offers the counterpoint, dropping on cautious guidance despite beating estimates, reminding us that ABC—Always Be in Control matters when volatility spikes around binary events.
Overseas, we saw mixed action in Asia-Pacific with Japan’s Nikkei (+0.3%) and South Korea’s Kospi (+3.7%) hitting fresh records, while Hong Kong’s Hang Seng (-1.4%) dragged on China concerns. European indices are modestly higher, led by France’s CAC 40 (+0.9%), while geopolitical crosscurrents remain active with U.S.-Iran nuclear negotiations resuming today—though the Wall Street Journal reports the two sides remain “far apart.” In the commodity complex, crude oil is down $1.24 to $64.18, and gold retreated $25.40 to $5,200.80, suggesting some risk-on positioning despite the futures flatness. The earnings parade continues with over 30 reports this morning, creating a stock-picker’s market where individual catalysts matter more than broad index direction.
Market Health
The internal market structure shows a Very Bullish 4% sentiment reading with Bull 4% at 321 versus Bear 4% at just 124—a decisive 2.6:1 ratio that confirms yesterday’s solid rally had legitimate breadth behind it. More importantly, 76% of stocks are trading above their 20-day moving average, up sharply from recent readings and consistent with a market finding its footing after the February shakeout. The 40-day picture is less convincing at 56.46%, indicating we’re still working through an intermediate correction, but the short-term momentum shift is undeniable. The Bull 20% reading at 76 versus Bear 20% at 39 suggests new positions are working, which is exactly what you want to see when deploying capital on 2LYNCH continuation setups.
Sector rotation tells a clear story: Technology (RSPT) surged to 1.52, rising from 0.98 yesterday and now in the 86th percentile of its three-month range—this is PLASTICS in action as tech reasserts leadership. The 1.74% daily gain shows conviction, not just drift. Consumer Discretionary (RSPD), however, collapsed to 0.32 from 0.93, falling to the 3rd percentile and down 2.16% yesterday, suggesting rotation out of economically sensitive names. Energy (RSPG) remains elevated at 3.01 (75th percentile), though it’s falling from 3.77, indicating profit-taking after a strong run. The standout is Utilities (RSPU) at 4.00 in the 95th percentile—defensive positioning that seems incongruous with the bullish breadth readings, possibly reflecting bond market concerns. Financials (RSPF) at -0.49 (14th percentile) and Communications (RSPC) at -0.22 continue to lag, reinforcing that this is a narrow tech-led advance, not a broad-based bull market resumption.
Strategy Signals
The 2LYNCH continuation scan delivered 44 signals with quality institutional names leading the charge. AMAT at $394.95 (+4.5%, 1.1x RVOL) shows the semiconductor equipment story remains intact despite NVDA‘s lukewarm reception—this is a 70.1% risk setup with 7.0% ATR multiple, suggesting room to run if tech stays bid. ISRG at $506.17 (+2.5%) continues its surgical robotics dominance with a 93.5% risk profile, while RDDT at $149.67 (+5.3%) demonstrates that high-quality internet names with institutional backing can still work in this environment. JBL at $277.57 (+4.3%, 1.3x RVOL) in electronics manufacturing represents the infrastructure build-out trade beyond just chips. The key here is that all top signals show institutional sponsorship (INST tag), meaning smart money is validating these moves—this aligns with CRT—Controlled Risk Taking where institutional confirmation reduces speculative risk.
The D9M (momentum breakout) scan produced 100 signals with some spectacular movers: LRMR exploded 61.3% on 18.4x relative volume—too extended to chase but validates the methodology. More actionable are AXTI at $40.97 (+16.8%, 1.4x RVOL) in semiconductors and GLW at $160.43 (+5.8%, 1.3x RVOL, INST) in electronics, both showing double-digit ATR multiples suggesting genuine shifts in sentiment. ZETA at $17.85 (+5.1%, 1.7x RVOL) in software represents the AI software recovery Huang referenced, now up 120.1% from its risk level. The D9M signals are firing in clusters around tech infrastructure—semiconductors, electronics, software—confirming that yesterday’s rally wasn’t random noise but a sector-driven event with follow-through potential.
The Reversal scan flagged 236 signals, many with elevated relative volume suggesting capitulation or major position shifts. GDDY at $79.12 (-14.3%, 4.4x RVOL, INST) in software is bleeding on 129.6% risk—likely a delayed reaction to guidance concerns in the broader software space post-Salesforce. MELI at $1,767.71 (-8.1%, 4.4x RVOL, INST) in Latin American e-commerce shows how quickly momentum can reverse when institutional holders head for the exits. These aren’t buy signals yet—they need stabilization—but they’re on the radar for potential FFM—Find Free Money setups if they form tight consolidations near support. The 20% Study shows several leveraged ETFs (CRMX, APLZ, WULX) extended beyond normal ranges, which typically precedes either violent continuation or sharp mean reversion—trade accordingly with tight stops.
Today’s Watchlist
- NVDA $198.60 — Watching for follow-through above $200 on the beat-and-raise; failure to sustain pre-market gains would be a warning signal for the entire tech complex.
- AMAT $394.95 — 2LYNCH continuation with institutional backing and 7.0% ATR multiple; if semis hold, this leads the equipment sector higher.
- CRM $185.90 — Dropped 3.1% on cautious guidance; watching for stabilization around $185 as a potential reversal setup if software sentiment improves.
- ISRG $506.17 — Medical robotics leader showing 2LYNCH characteristics with 93.5% risk profile; healthcare showing relative strength as defensive rotation kicks in.
- ZETA $17.85 — AI software name up 120% from risk level on D9M scan; validates Huang’s thesis that AI helps rather than hurts software companies.
Action Codes of the Day
2LYNCH — Continuation Breakout: With 44 signals firing, many in institutional tech names showing relative volume expansion, the continuation setup is the highest-probability play today. AMAT, ISRG, RDDT all demonstrate the pattern—prior uptrend, consolidation, volume confirmation on breakout. This is the core strategy when breadth is strong (76% above 20-day MA) but futures are muted, allowing you to pick individual winners rather than chase indices.
PLASTICS — Sector Winners: Technology sector strength (RSPT at 86th percentile, +1.74% daily) combined with 2LYNCH signals concentrated in HC and Tech validates that the sectors producing the biggest winners remain intact. Healthcare (RSPH) at -0.63 is lagging but showing stabilization with names like ISRG working, while tech dominance via NVDA, AMAT, and software names confirms where capital is flowing. When in doubt, fish where the fish are biting.
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