Morning Dose #230 Neutral

Morning Dose #230: Zero Percent: Exhaustion, Not Capitulation – Monday 3/16/2026

March 16, 2026 7:10

Tickers Mentioned

META NVDA DLTR CSTM KYIV PLYX EMAT CITR XLE TLT

Episode Summary

With zero percent of stocks above their 40-day moving average, the hosts break down why this is exhaustion rather than capitulation — and what that distinction means for how you trade today. The macro chain from Iran to oil to the death of 2026 rate cut expectations is mapped through sector rotation, with CSTM, META, and NVDA as the key names to watch heading into Fed Wednesday.

Key Takeaways

Futures gap up as Iran coalition news calms oil fears
Zero percent above 40-day average signals extreme oversold conditions
Energy leads while healthcare and financials lag badly
Fed decision Wednesday with rate cut hopes diminished
Signal generation muted across all major strategies

SA: Cautious. Markets attempting relief bounce from oversold conditions amid Iran conflict volatility. Defensive positioning with selective long exposure. Focus on energy leadership and bond proxy strength while avoiding extended cyclicals.

SIP: META ABOS CSTM KYIV

EG SA:

Regime context: 0% above SMA40 signals severe oversold condition, but Bull 4% at zero vs Bear 4% at zero suggests no clear directional bias forming yet
What’s working: No major strategy signals firing – Continuation scan empty, D9M quiet, 20% Study shows 10 names but mostly ETFs and damaged names
Sector leadership: Energy (RSPG +4.75%) clear winner, Utilities (RSPU +3.13%) defensive bid; Healthcare (RSPH -2.74%) and Financials (RSPF -2.04%) worst
Key event: Trump administration forming Strait of Hormuz coalition, Energy Secretary Wright sees war ending “in weeks” – oil down -1.6% to $97
Market read: S&P futures +51 points suggesting 0.8% gap up after last week’s -1.6% decline, attempting bounce from 2026 lows
DEP watchlist: Limited quality setups – focus on oversold bounce candidates rather than breakout plays
SIPS: META layoff news creating opportunity, CSTM with $300M buyback, energy names on any oil stabilization

Briefing Morning Report

Markets are positioned for a relief bounce this morning after last week’s broad-based selloff, with S&P futures up 51 points as geopolitical developments provide the primary catalyst. The key narrative shift centers on Trump administration efforts to forge an international coalition for Strait of Hormuz escorts, with Energy Secretary Chris Wright projecting the Iran conflict will “certainly come to an end in the next few weeks.” This has helped crude oil pull back -1.6% to $97.09 from overnight tests of $100, providing some relief to inflation concerns that hammered equities last week.

The Federal Reserve’s Wednesday decision looms large, though no rate changes are expected. However, recent oil price surge has significantly diminished market expectations for rate cuts in 2026, with futures no longer confident of even a single 25bp reduction. Corporate catalysts include META planning large AI-cost layoffs and NVDA set to introduce new inference chips at this week’s GTC event. Meanwhile, DLTR beat earnings but guided in-line, showing the consumer discretionary pressure from higher energy costs.

Market Health

Breadth indicators paint a picture of severe technical damage with potential for oversold bounces. The 4% sentiment sits neutral at 0% Bull vs 0% Bear, while the more telling 40SMA metric shows 0% of stocks above their 40-day averages – an extremely oversold reading. The 20SMA metric at just 14% above confirms the broad-based selling pressure, though this level often marks short-term bounce zones. Market breadth of 14 Bull vs 18 Bear on the 20% study shows modest bearish tilt but nothing extreme.

Sector rotation remains clear with defensive positioning dominating. Energy continues its leadership at +4.75% on the ATR-M measure, while Utilities at +3.13% reflects bond proxy demand amid rate uncertainty. The carnage in Healthcare (-2.74%) and Financials (-2.04%) shows growth and rate-sensitive sectors under maximum pressure. Consumer Discretionary at -1.96% reflects the spending concerns from higher energy costs, with homebuilders particularly pressured as mortgage rates climb.

Strategy Signals

Signal generation remains muted across all major strategies, reflecting the challenging technical environment. The 2LYNCH continuation scan shows zero signals, indicating no quality breakout setups in the current volatility. The D9M reversal scan is similarly quiet with no signals, suggesting oversold conditions haven’t yet reached capitulation extremes that typically generate high-probability bounce plays.

The 20% Study highlights 10 names, but the quality is mixed with several ETFs (MUD, CRWU, SMU, SNXX, USGG, WDCX) and damaged individual names like PLYX (-87% from highs) and EMAT (-68% from highs). This composition suggests systematic selling rather than stock-specific opportunities. The few individual names showing strength like CITR (up 2.68 ATR multiples) merit attention but require tight risk management given the broad market headwinds.

Today’s Watchlist

META – Layoff news creates opportunity if broad market bounces, strong AI positioning
CSTM – $300M buyback announcement provides downside support, steel exposure
NVDA – GTC event this week with new AI inference chip launch catalyst
XLE/Energy names – Oil pullback creates entry if geopolitical tensions ease further
TLT/Utilities – Defensive plays if relief bounce fails to sustain

Action Codes of the Day

CRT (Controlled Risk Taking): Oversold bounce attempt with 0% above SMA40 requires disciplined position sizing and tight stops.

T3A (Think 3 Days Ahead): Fed Wednesday, Trump-Xi summit uncertainty, and ongoing Iran developments create multiple catalysts requiring forward planning.

Welcome to WaveRider Morning Dose. Everything you need before the bell. Let's dive in. Good morning, traders. Zero. That's the number this morning. Zero percent of stocks above their 40-day moving average. We haven't seen a washout like this in a long time. Futures are trying to bounce. The question is, do you trust it? Let's get you ready. Yeah, that zero percent reading is, I mean, it's something I've rarely seen. It's wild, right? It's incredible. SA is calling cautious this morning. And honestly, when you see 0% of stocks above their 40-day SMA, that's rubber band territory. Right. Like only 14% are above the 20-day. And here's the thing that really caught my eye. Bull 4% and Bear 4% are both sitting at zero. Oh, wow. Wait, both at zero? Both at zero. And that's not capitulation. It's exhaustion. When bull and bear are both at zero, the market hasn't picked a direction yet. Capitulation has a direction. This doesn't. Yeah. Huh. So we're waiting for a direction to form, not just a... A floor, exactly. And S&P futures are up 51 points this morning, trying to gap up after last week's minus 1.6% decline to 2026 lows. Right, right. Okay, so we're getting a bounce attempt. But given what's happening with Iran and oil overnight, What does this futures bounce actually mean? Well, I mean, the whole thing traces back to one chain. Iran conflict led to this Strait of Hormuz international escort coalition forming. Which is a de-escalation sign. Right. And the energy secretary is projecting the Iran conflict ends, quote, in weeks Markets taking that seriously enough to sell oil Mm Here the thing Crudes at down 1 after testing overnight But here my analogy Oil at pulling back from is like a fever dropping from 103 to 101. You feel slightly better, but you're still sick. Oh, that's good. And you're right. 97 still hurts. It does. And that $97 oil has killed rate cut expectations for 2026, which is showing up directly in the sector rankings. Yeah. Oh, man. Oil pulling back from $100, a de-escalation signal on Iran, and yet the rate cut hopes for 2026 are gone. Let's see exactly where the money is moving and where it's running from. So look, the rate cut collapse is the lens for everything you're about to hear. Futures are no longer pricing in even a single 25 basis point cut for 2026. Not even... Not even one. That is a seismic shift from just weeks ago. And it's rewriting the sector rankings in real time. Energy RSPG leading at plus 4.75 percent, direct beneficiary of the oil environment even as crude pulls back. Energy utilities RSPU at plus 3.13 percent, classic defensive and bond proxy bid. Wait, energy and utilities leading at the same time? That's not a growth story. That's a shelter story. That's exactly it. And the laggard list is the other side of that trade. Healthcare, RSPH, worst at minus 2.74%. You know what? Healthcare, that surprises me a little. I'd have guessed… Yeah, healthcare is getting hit on policy noise on top of the macro. Financials, RSPF at minus 2 as the yield curve reprices against cut expectations Consumer discretionary at minus 1 as higher energy costs squeeze wallets and the 20 study confirms it 14 bull names versus 18 bear names No broad accumulation happening. So it's like the sectors are basically voting on the Fed right now in real time. Real time. So basically that's exactly what's happening. No cuts, no growth, find cover. Yeah, totally. Defensive leadership, empty breath, and a bounce nobody fully trusts yet. That's exactly the kind of environment where having a precise playbook matters most. Let's get into the specific names and levels. Setup quality is thin this morning, and honestly, when the market is this washed out, the scans reflected. Zero continuation signals, zero reversal signals. Scans are empty, and that itself is the... The signal. That is the signal. Be selective, not aggressive. The metal detector is telling you the beach has been picked over. I like that. Look, but there are a handful of names worth watching. Meta, layoff news creating a potential bounce opportunity. Strong AI positioning provides fundamental support. Watch for stabilization above recent lows. Mm-hmm. SCSTM, $300 million buyback announcement provides a corporate buying floor. Corporate insiders buying when the market won't. Yeah. And NVDA. GTC event this week with new AI inference chip launch. Wait, GTC is this week? This week Event catalyst in a beaten down name But and this is the part traders miss pre positioning only makes sense with a defined exit Watch for sell the news risk if the stock doesn hold gains post Also flagging energy names and XLE on any oil stabilization around Hmm Of those three which one has the cleanest risk right now given the regime Look if I being honest SCSTM The buyback gives you a corporate floor that the other two don't have. In a cautious regime, that's the kind of asymmetry you want. Okay, so SCSTM is your conviction call. Yeah. Action codes for today, CRT mode. Basically, you're driving in fog. Keep moving, but slow down and keep your lights on. Position sizing down, tight stops, non-negotiable. And T3A, think three days ahead. Fed Wednesday dot plot and statement language is the next major fork in the road. Fed Wednesday, that's going to be a different show entirely. Iran developments and Trump-She trade headlines are secondary but live risks. Two scenarios today. Scenario A, the gap up holds above overnight highs. Scale selectively into meta, NVDA, and energy with defined risk. Let the market prove the bounce. And scenario B? Scenario B, the gap up fades or we open lower. Same signal either way. The bounce is not holding. Shift to utilities and cash. No new longs until breath stabilizes. And, and this is the part traders miss, don't chase the fade either. Just step back. The bounce has to earn your trust before you commit. Exactly. Fed Wednesday is the next real test. We'll know a lot more then. 0% above the 40-day? Empty scans. Fed in three days? The bounce has to earn it. Tight stops, selective entries. Keep your eyes on Wednesday. Good luck out there, traders. Oh, man. Stay sharp. Sure. That's all for today's episode of Wave Rider Morning Dose. Everything you need before the bell. See you next time.