Situation Awareness: Bullish, expanding. Mega-cap tech momentum and a coordinated relief trade in oil are driving the tape into record territory — the S&P 500 closed above 7,600 for the first time since June 2 and the DJIA notched an all-time closing high, with futures pointing higher again (S&P +25 @ 7,653; Dow +559 @ 53,893; Nasdaq +303 @ 29,194). Index prices and SMA levels are data unavailable this morning, so lean on futures and the 7,600 pivot as the reference. Trade mode: constructive and offensive on breakouts, but respect that leadership is still concentrated at the top. The dominant force is a one-two punch of strong earnings (CAT +11%, PLTR +15%) and easing geopolitics as a drafted U.S.–Iran framework knocks crude lower. Regime context — 61.29% of stocks trade above their 40-day SMA (up a sharp +6.7pp day-over-day), and the 4% Bull/Bear gauge shows 544 bulls vs. just 77 bears. The 5-day trend turned decisively up, with breadth above the 20-SMA jumping to 66% from 47% — early-cycle broadening beneath the mega-cap surface.
SIP: LIFE DORM SUPN ENSC
- What’s working: the Continuation/2LYNCH scan is rich with 26 signals — good breadth for breakout entries. Reversal is thin (2: SLB, AVGO). Delayed 9M is empty.
- Leading sectors (prior session): communication services +4.3%, consumer discretionary +2.7%, information technology +1.6%; energy lagged at -1.5%. Live sector/theme and ATR data are unavailable with the market closed.
- Key event: reports from Qatar that language has been drafted for a U.S.–Iran peace deal; Bessent says “there is a chance” of a Strait of Hormuz reopening deal today or tomorrow.
- Market read: yesterday’s session showed a healthy internal — semis reversed from a -3% open to finish +1.1%, equal-weight S&P rose 1.0%, Russell 2000 +1.7%. That participation says the rally isn’t purely mega-cap; dips are being bought.
- DEP watchlist: no Delayed 9M signals fired — stay patient on that book.
- SIPS: NBIS, IRTC, TLN — cleanest continuation setups with above-average RVOL.
Today’s Market Narrative
August is picking up right where late July left off. Equity futures point higher after a session that saw all three major averages gain more than 1% — the S&P 500 up 1.5% to close above 7,600 for the first time since June 2, the Nasdaq Composite +2.1%, and the Dow +1.3% to a record close. This morning’s tape is being carried by two clean catalysts: a wave of strong earnings and a fresh leg lower in oil on Iran de-escalation headlines. S&P futures sit +25 at 7,653, Dow futures +559 at 53,893, and Nasdaq futures +303 at 29,194.
The earnings buzz is loud. Caterpillar (CAT 921.57, +11.0%) blew past EPS by $1.95 and beat on revenue — a heavyweight industrial print that validates the cyclical bid. Palantir (PLTR 144.50, +15.0%) delivered a beat-and-raise, guiding Q3 and FY26 revenue above consensus, and drew a Deutsche Bank upgrade to Buy with a $200 target. McDonald’s (MCD 270.00, +1.8%) beat by $0.06 with global comps up 1.3%. The one wrinkle at the top: Alphabet (GOOG 368.01, -1.2%) is softer after the FT reported a $150 billion infrastructure finance program to supply chips to Anthropic — a capex-heavy commitment the market is digesting.
Yesterday’s internals matter for how you trade today. The Magnificent Seven did the heavy lifting again — six of seven finished higher, Amazon crossed a $3 trillion market cap (AMZN +4.58%), Meta +6.02%, Microsoft +4.93%, Alphabet +4.44% — but the breadth underneath was encouraging. The PHLX Semiconductor Index staged a sharp reversal from an early -3% hole to close +1.1%, software (IGV) ripped 3.0%, and eight of eleven sectors advanced. That’s the kind of tape where you can press breakouts rather than fade them.
Overseas is confirming the risk-on tone. European indices trade higher with Italy’s MIB at a fresh record (+1.2%); Asia was mostly firmer with South Korea’s Kospi +1.6% and Australia’s ASX +1.5%. The one thing to keep on the radar is the yen: USD/JPY sits near 157.5 after coordinated U.S.–Japan intervention last Friday dragged it off a 40-year low — Bessent said officials “will not hesitate” to intervene again.
Macro & Policy
The bond market is quietly supportive. Treasuries are extending Monday’s bounce off July’s lows, with yields lower across the curve: the 2-yr at 4.21% (-4 bps), 5-yr 4.36% (-4 bps), 10-yr 4.66% (-3 bps), and the 30-yr at 5.22% (-1 bp). Lower oil and lower yields together are exactly the cocktail equity bulls want — it eases the inflation/rate overhang that pressured stocks in July.
The geopolitical driver is Iran. President Trump called off a planned strike, and reports out of Qatar say language has been drafted for a potential U.S.–Iran deal, with the administration pushing Iran toward an Oman agreement on Strait of Hormuz shipping traffic today. Crude is retreating again after briefly poking above its 50-day moving average (81.68), with WTI down to 78.73. The energy sector was yesterday’s laggard (-1.5%) and Trump’s jawboning of oil companies to lower gasoline prices adds pressure — reflected in the Reversal scan flagging SLB.
The bigger structural risk to keep in the back pocket is the yen carry trade. Briefing’s Big Picture has been flagging the yen’s 40-year low as a setup for a potential carry-unwind of the type that briefly crushed global equities in August 2024. With Japan’s MOF now actively intervening — and speculation it did so again Monday — any surprise BOJ move could spark sharp, short-lived volatility. It’s a market risk, not a systemic one, but it’s the trapdoor under an otherwise clean bullish tape.
Economic Calendar Today
- 8:30 ET — June Trade Balance (already released): deficit narrowed to $73.3B vs. -$73.0B consensus and -$77.6B prior. Imports fell more than exports, but the Q2 real goods deficit still runs ~18% above Q1 — a net drag on Q2 GDP. Neutral for equities.
- 10:00 ET — June Factory Orders: consensus +0.2% vs. prior -1.3%. A bounce expected after May’s slump.
- 10:00 ET — June JOLTS Job Openings: prior 7.594M. A labor-market tell ahead of Friday’s July Employment Report, which is the week’s real macro event.
- Earnings today: heavy morning slate already out (CAT, MCD, PFE, MRK, DUK, KMB, ADM, AME, ROK); afternoon brings AMD, AMGN, ANET, GILD, BKNG, DVN, EMR, PINS, WYNN, MPC.
- No Fed speakers of note; a light data day keeps earnings in the driver’s seat.
Earnings & Corporate News
The earnings reactions are broad and mostly constructive. Beyond the CAT/PLTR/MCD headliners, the beat list runs deep: Rockwell (ROK) beat by $0.11 and raised FY26; Zebra (ZBRA) crushed by $1.99 and guided above; onsemi (ON +7%) beat and is gapping up; Ametek (AME) raised guidance; DuPont (DD) guided FY26 EPS above. On the pre-market movers, Resideo’s ADI spin-off (REZI +44%) leads the tape, followed by AMRC +31.6%, Ethos Technologies (LIFE +20%), Blackblaze (BLZE +20%), and PLTR +16%. The downside gappers are earnings-specific: CLPT -17.4%, POWL -11.7% (missed on both lines), ICHR -9%, SPOT -5.4%, and WAT -3.7%.
M&A and capital-markets activity are humming — a sign of confident corporate boardrooms. Prologis (PLD -2.2% on its equity raise) is buying SEGRO in a $18.8B deal; Williams (WMB) is acquiring Momentum Midstream for up to $5.5B; Bending Spoons is taking Airtable private for $1.285B; and Brady closed its $1.4B buy of Honeywell’s PSS business.
On the ratings front, the standout is Apple — double-downgraded to Hold at both DZ Bank ($310) and China Renaissance ($280), a notable divergence from the mega-cap momentum. JPMorgan cut Nike to Underweight ($40) and PVH to Underweight. On the bullish side, five houses initiated SK Hynix with Buy/Outperform ratings (targets up to $300), keeping the memory/AI-hardware theme front and center.
WaveFinder Signal Summary
The scan environment is rich, not dry — 26 Continuation/2LYNCH signals is healthy breadth that supports pressing breakouts rather than sitting on hands. The cleanest setups combine strong momentum with volume: NBIS ($212.58, +11.6%, RVOL 1.3) in internet, IRTC ($124.66, +6.4%, RVOL 1.3) in medical, and TLN ($344.49, +3.1%, RVOL 1.2) in utilities. Metals and mining names KALU and SCCO round out the continuation book, echoing CAT‘s industrial strength.
Breadth is expanding, not contracting — 61.29% of stocks above the 40-SMA vs. 54.59% the prior session (+6.7pp), and 66% above the 20-SMA vs. 47% (+19pp). That two-day surge is the tell: participation is broadening beneath the mega-cap tape. The Reversal scan stays thin (SLB, AVGO), and Delayed 9M is empty — no need to chase fading names when the primary trend is up.
Today’s Watchlist
- PLTR — Beat-and-raise, DB upgrade to Buy ($200), gapping +16%. 2LYNCH continuation off the earnings catalyst; watch for hold above the gap.
- CAT — +11% on a $1.95 EPS beat; industrial bellwether confirming the cyclical bid. Momentum entry on any orderly pullback.
- NBIS — Continuation/2LYNCH leader at $212.58 (+11.6%, RVOL 1.3); AI-infrastructure theme with volume behind it.
- LIFE — SIP standout, +10.6% from open on a beat and raised guidance; low float (12.35M) with elevated short interest (15.3%) — squeeze potential.
- ON — Semis reversal theme; beat and gapping +7%. Play the sector’s momentum from yesterday’s sharp intraday recovery.
- SLB — Reversal scan flag as oil sinks on Iran de-escalation; a short/avoid tell for energy longs.
Action Codes of the Day
- 2LYNCH — With 26 continuation signals firing and breadth expanding to 61.29% above the 40-SMA, this is a breakout tape. Press momentum leaders like NBIS (+11.6%) and PLTR (+16%) that are extending on volume.
- FFM — Find Free Money: with Bull 4% at 544 vs. Bear 77 and low-risk continuation setups available, favor tight-risk entries that work from the open — target names like IRTC and TLN where the trend and volume align.