WaveRider Morning Dose — Pre-Market Preparation for 2026-03-04
Briefing Morning Report
The dominant macro theme heading into Wednesday’s open is the intensifying U.S. military conflict with Iran, and markets are navigating that uncertainty with a split personality. S&P 500 futures are essentially flat at -4 points (6,821), Nasdaq futures are modestly green at +11 (24,767), while the Dow lags at -53 (48,507). Tuesday’s session was a textbook geopolitical whipsaw — sharp early selling, a midday recovery driven by Trump’s announcement that the U.S. Development Finance Corporation would backstop insurance for Persian Gulf shippers, then a soft close. The partial fix calmed the panic but didn’t resolve the underlying disruption. Bloomberg called it exactly that — a partial fix. Iranian operatives reportedly reaching out to the CIA to discuss ceasefire terms adds a diplomatic wild card that could move markets sharply either direction today.
The commodity picture tells you everything about where money is rotating. Crude oil is at $75.02 (+$0.45), gold has surged to $5,182.90 (+$59.20), silver is at $85.80 (+$2.33), and copper sits at $5.91 (+$0.08). Gold and silver flows are being disrupted by the conflict per the Financial Times — yet prices are ripping. That’s a supply squeeze narrative, not just a fear trade. Treasury Secretary Bessent flagged that Section 122 global tariffs will likely be raised to 15% this week, adding another layer of inflationary pressure. Cleveland Fed‘s Hammack pushed back on any near-term rate cuts, calling for rates unchanged “for an extended period.” The rate-cut trade is firmly off the table in this environment.
On the earnings front, CrowdStrike (CRWD $392.88, +0.4%) reported last night — beat EPS by $0.02, revenues in line, Q1 and FY27 guidance in line. Solid but not spectacular; the stock’s modest pre-market gain reflects that. Ross Stores (ROST $210.30, +6.4%) was the standout, beating EPS by $0.10, topping revenues, and authorizing a new buyback while hiking the dividend — a clean trifecta for value-oriented retail. Abercrombie & Fitch (ANF) beat Q4 but guided Q1 EPS and revenues below consensus, which is the setup traders need to watch at the open. AutoZone (AZO $3,637.17, -5.99% gap) reported worse-than-expected Q2 results on both revenue and margin — that gap deserves respect as potential continuation.
Market Health
The breadth picture is deeply concerning and shouldn’t be minimized. As of yesterday’s close, the 4% sentiment reading sits at just 4% — Very Bearish, with the 40-day SMA also in Bearish territory. The raw count is stark: 123 bulls vs. 578 bears on the 4% measure. Even the 20% measure, which smooths out short-term noise, shows 72 bulls vs. 55 bears — a ratio that’s been deteriorating. The 9-month count is perhaps the most alarming data point: 23 bulls vs. 89 bears, confirming this isn’t just a one-week wobble. We are in a sustained distribution phase that precedes meaningful downside if geopolitical pressures persist.
Sector rotation is shouting the defensive/geopolitical playbook. Energy (RSPG at 4.67, 93rd percentile) and Utilities (RSPU at 4.17, 93rd percentile) are the two standout leaders — both near multi-month highs on their relative strength measures. Everything else is in retreat. Technology (RSPT at -0.53, 3rd percentile) and Consumer Discretionary (RSPD at -0.38, 0th percentile — an all-time low in the dataset) are at the absolute bottom of their ranges. Health Care (RSPH at -1.19, 0th percentile) is also hitting fresh lows. Industrials fell sharply yesterday (-1.42% daily change) despite the war-driven defense narrative, suggesting that broad cyclical selling is overriding any sector-specific tailwinds. The message is clear: energy and utilities are the only confirmed institutional rotations right now.
Strategy Signals
The 2LYNCH continuation scan generated 136 signals, but quality control matters here — we’re fishing in a bearish breadth environment. The cleanest setups with institutional backing are APP ($438.89, +1.4%, RVOL 0.7, INST), CRM ($196.05, +1.6%, RVOL 0.8, INST), and DDOG ($111.77, +0.6%, INST). All three are software names showing relative strength against a weak tech tape — that kind of divergence in a sector at the 3rd percentile is worth noting. CRM shows a 2LYNCH setup with institutional backing and negative ATR multiple (-2.7%), meaning it’s still within its recent range and not extended. With earnings risk passing for most names, these setups favor CRT — controlled risk taking with defined stops. EQIX ($972.01, +0.6%, RVOL 1.1, INST) in Real Estate is also building a base with institutional support, potentially benefiting from the data center/AI infrastructure narrative that’s partially insulated from the Iran trade.
The D9M scan is where the war trade lives most explicitly. FRO ($37.14, -6.3%, RVOL 2.5) and NAT ($5.78, -3.0%, RVOL 2.1) are tanker names getting hammered as Persian Gulf shipping insurance collapses — but the D9M signal on these suggests they may be approaching exhaustion levels worth watching for a reversal once the insurance situation clarifies. BATL ($27.68, +134.6%, RVOL 5.3) is an extraordinary mover in Energy — a 97.2 ATR multiple tells you this is pure momentum/squeeze territory, not a planned entry. PLTR ($147.22, +1.4%, RVOL 1.1, INST) remains one of the cleaner D9M setups with institutional support — defense/AI intersection names like Palantir should see continued bid in a geopolitical escalation environment. This is a T3A play — think three days ahead on what an Iran escalation/de-escalation means for defense-adjacent software.
The Reversal scan (1,021 signals — an elevated count) reflects the breadth damage. KORU ($403.06, -31.1%, RVOL 8.2) is a South Korea leveraged ETF — the Kospi’s -12.1% overnight collapse is the driver here, and KORU is the instrument absorbing that pain. This isn’t a casual trade. NRG ($162.06, -7.7%, RVOL 5.0, INST, UTILITY) stands out as a potential BTFD setup — institutional-backed utility name with a 47.8% risk score getting hit on elevated volume, potentially creating a dislocation. The 20% Study shows CRCA ($51.03, ADR 30%, RVOL 1.96) and DLLL ($28.02, +263% off 52W low, RVOL 2.64) as the high-velocity names worth monitoring for intraday momentum plays, though the war-disrupted tape demands strict discipline.
Today’s Watchlist
- ROST ($210.30, +6.4%) — Clean earnings catalyst: beat on EPS by $0.10, revenue beat, new buyback, dividend hike. Defensive retail with pricing power is exactly what this market rewards right now. Watch for 2LYNCH continuation above yesterday’s gap-up open if it holds morning support. Action: CRT
- PLTR ($147.22, +1.4%) — Defense-adjacent AI software at the intersection of two dominant macro themes. D9M signal with INST backing, negative ATR multiple (-1.5%) suggesting room to run. Iran conflict = more government surveillance/defense software spend. Action: T3A
- CRM ($196.05, +1.6%, INST) — 2LYNCH setup in software showing relative strength against a sector at its 3-year low percentile. Institutional backing provides the floor. Tight risk with stop below recent base. Action: 2LYNCH / FFM
- AZO ($3,637.17, -5.99% gap) — Missed Q2 on revenue AND margin. The SIP note flags “worse-than-expected” with a clean negative gap. This is a potential short continuation if it fails to reclaim the prior day’s close in the first hour. Risk is defined by the gap fill level. Action: CRT
- NRG ($162.06, -7.7%, RVOL 5.0, INST) — Institutional utility getting hit hard on big volume. Reversal signal at 47.8% risk score. If the Iran situation shows any diplomatic progress today (CIA talks), utility names with defensive characteristics could snap back sharply. Watch for volume confirmation on any bounce. Action: BTFD
Action Codes of the Day
T3A — Think 3 Days Ahead: The CIA-Iran dialogue reported by the NYT is the wildcard that could flip this tape in either direction within 72 hours. Position sizing and scenario planning around a diplomatic resolution (risk-on rip) vs. escalation (energy/gold surge, equity selloff) is the single most important mental exercise today. Every trade needs a geopolitical scenario attached to it.
ABC — Always Be in Control: With market sentiment at a 4% Very Bearish reading, 578 bears vs. 123 bulls on the 4% measure, and two major indices at 0th percentile sector strength, this is not a tape that rewards aggression. Reduced size, pre-defined stops, and no chasing gap-ups into a volatile open. The war premium in crude and gold is real, but whipsaws are also real — as Tuesday’s intraday reversal demonstrated. Control the controllables today.