Situation Awareness: Cautious. The tape is caught in a pre-CPI holding pattern — S&P futures sit four points above fair value and Nasdaq futures +75 as oil eases back toward $82/bbl from earlier highs near $84 on a Bloomberg report that the U.S. and Iran are close to “some sort of arrangement.” Index price data is unavailable this morning, so we anchor to breadth and futures rather than specific SPY/QQQ levels. Yesterday’s session closed modestly lower (S&P -0.1%, Nasdaq -0.3%) as a 5.1% oil spike lifted yields and semis sold off into the bell. Trade mode: selective and watchful — this is a First Hour Pass tape ahead of tomorrow’s July CPI, the week’s marquee catalyst. Regime context — 60.48% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 242 bulls vs. 251 bears. The 5-day trend shows contracting participation, with % above 20 SMA collapsing from 240% to 164% and 40 SMA breadth slipping 4.2 points day-over-day, signaling momentum cooling beneath a resilient index surface.
SIP: B POWW AQST HIMS
- What’s working: the Continuation/2LYNCH scan is rich at 27 signals — healthy breadth despite the pullback — led by energy and materials names. Reversal scan is thin at 3; Delayed 9M is empty.
- Leading sectors (via signal clustering, market closed for live data): ENERGY (CHRD, PBF), METALS/MINING (STLD, TGB), FINANCE (APO, WT) are where the ATR and relative strength sit; the oil bid and precious-metals rally are the dominant themes.
- Key event: July CPI lands tomorrow (consensus 0.1%); CME FedWatch now prices a 51.7% chance of a September rate HIKE, up from 44.4% Friday but down from 67.2% a week ago.
- Market read: yesterday’s tape absorbed a violent oil move and a semi flush yet finished only fractionally lower — underlying strength, but leadership is narrowing. Respect the churn.
- DEP watchlist: no Delayed 9M signals today — nothing to force.
- SIPS: APO, CHRD, STLD lead the swing candidates from the Continuation scan.
Today’s Market Narrative
Futures point to a slightly higher open, with S&P 500 futures +4.00 and Nasdaq 100 futures +75.00 against fair value as of 8:33 ET. The improvement from the 6:00 ET read (S&P -6, Nasdaq +10) tracks one clean catalyst: crude backing off. Bloomberg reported Pakistan’s defense minister saying the U.S. and Iran are close to “some sort of an arrangement,” pulling WTI back toward $82/bbl after it touched roughly $84 earlier. That’s a welcome reprieve after Monday’s 5.1% oil surge to a $82.17 settle — the single biggest force weighing on the tape to start the week.
Yesterday told the story of a market that took a punch and stayed on its feet. The S&P 500 (-0.1%), Nasdaq Composite (-0.3%), and Dow (-0.1%) all finished modestly lower as the oil spike drove yields higher and hammered rate-sensitive corners — real estate (-1.2%) and utilities (-1.1%) were the worst groups, and the iShares U.S. Home Construction ETF fell 2.7%. The late fade came from semiconductors: the PHLX Semiconductor Index dropped 2.9% to a session low on profit-taking after last week’s rebound, with NVIDIA sliding 2.86% and Intel off 4.06%. Yet energy (+4.6%), health care (+1.5%), and materials (+0.7%) cushioned the blow, and software (IGV +2.3%) offset the chip weakness. That mixed-sector resilience is the tell — the index is near record highs even as leadership rotates hard.
This morning the semis are trying to steady, with NVIDIA quoted at 220.03 (+1.1%) after CEO Jensen Huang told CNBC the $500 billion AI infrastructure financing package makes NVIDIA compute an “investable asset.” Overnight was quiet and cautious: Hong Kong’s Hang Seng fell 1.1%, Shanghai -0.8%, and Japan’s Nikkei was closed for a holiday. One standout data point — South Korea’s exports in the first ten days of August jumped 45.3% year-over-year, with chip exports up a staggering 155.4%, reinforcing the AI-demand thesis that TSM‘s revenue confirmed. Europe is dead flat, everyone waiting on the same thing: tomorrow’s inflation prints.
Macro & Policy
The entire market is idling ahead of the July CPI report tomorrow (consensus 0.1%), which Briefing flags as “highly influential to the Fed‘s next policy move.” The unusual wrinkle here is direction: FedWatch is pricing a September rate HIKE at 51.7% odds, not a cut — a hawkish tilt that has cooled from 67.2% a week ago but firmed from Friday’s 44.4%. NEC Director Hassett said he’d favor holding or cutting if he sat on the FOMC, and the BOJ’s latest summary of opinions leaned hawkish, so the global rate picture is genuinely two-sided into the data.
Treasuries are set for a mixed, short-end-strength start. The 2-year yield sits at 4.23% (-1 bp), the 10-year at 4.71% (+1 bp), and the 30-year at 5.26% (+2 bps) — the long bond underperforming as Monday’s oil-driven repricing lingers. The 2-year is holding just above its 50-day moving average (4.186%). The U.S. Dollar Index is flat at 99.85, EUR/USD unchanged at 1.1536, USD/JPY steady at 159.23. Commodities carry the risk signal: gold +0.6% to $4,446/ozt (levels not seen since early June), copper +0.9% to $6.672/lb — a classic reflation-and-hedge combination. Watch the $58 billion 3-year note auction at 13:00 ET for demand read-through ahead of tomorrow’s 10-year sale.
The Big Picture remains constructive underneath the noise: the S&P is up 13.3% YTD while forward 12-month EPS estimates have climbed 24.5% to $383.98, compressing the forward P/E to 20.1x from 22.2x at year-start. Earnings — not multiple expansion — are doing the work, and that broadening strength is why the Russell 2000 is up 21.6% YTD, trouncing mega-caps. That’s the ballast keeping this cautious tape from tipping over.
Economic Calendar Today
- 6:00 ET — July NFIB Small Business Optimism (released): Actual 99.8 vs. 97.1 consensus, prior 97.4 — a solid beat and a small-business confidence tailwind.
- 10:00 ET — July Existing Home Sales: Consensus 4.07M | Prior 4.09M — housing-sensitivity matters given yesterday’s homebuilder drubbing.
- 13:00 ET — $58B 3-Year Treasury Note auction: First of three supply events this week; weak demand would pressure the front end into CPI.
- Earnings: Q2 season is winding down at 89% of the S&P reported (blended growth 50.9%) — corporate flow is light, ceding the stage to macro.
- The main event is tomorrow: July CPI (Wed) + $42B 10-yr auction, then PPI (Thu) and Retail Sales (Fri). Expect muted conviction until the print.
Earnings & Corporate News
The active movers are pre-market earnings reactions. Hims & Hers Health (HIMS 29.90, -5.9%) is lower despite topping estimates after trimming the upper end of its full-year outlook — a “beat-and-guide-down” that the market punishes, and one to watch for a reversal setup given its 43.8%-risk profile echoes the TTD pattern. Intel (INTC 96.33, -1.2%) upsized its common stock offering to $20 billion at $95/share, expanding the dilution overhang that dragged it 4.06% Monday. NVIDIA (NVDA 220.03, +1.1%) is bouncing on Huang’s AI-financing pitch after leading the late semi flush.
The structural earnings story stays intact. TSM reported July revenue of NT$467.58 billion, up 44.7% year-over-year and 5.6% sequentially, keeping it on track for its $44.6–45.8B Q3 guide, with advanced nodes (7nm and below) at 77% of wafer revenue and 2nm ramping — durable proof the AI capex cycle isn’t cracking. RadNet (RDNT +8%) delivered record Q2 revenue up 25% to $622.7M with Digital Health ARR doubling to $105.5M. And Berkshire’s weekend beat came with its first buyback since 2024 ($4.5B), a value-oriented vote of confidence.
On the analyst front, Apple (AAPL 308.26) remains under pressure after Jefferies cut it to Underperform from Hold — a downgrade cutting across the large-cap indices and a headwind for any mega-cap-led bounce.
WaveFinder Signal Summary
Scan environment is constructive-but-narrowing. The Continuation/2LYNCH book is rich at 27 signals — well above the 10+ threshold that signals healthy breadth — and it’s concentrated in the day’s leadership: energy (CHRD +5.5%, PBF +7.4%), metals (STLD +2.3%), mining (TGB +5.4%), and finance (APO +3.6%). AXSM +3.8% carries the highest RVOL at 2.0. That said, breadth beneath the surface is contracting fast: stocks above the 40-day SMA fell to 60.48% from 64.7%, and the 20-day breadth read cratered from 240% to 164% — momentum is bleeding even as the index holds.
The Reversal scan is thin (3 signals: B, TTD, TU) and Delayed 9M is empty, so there’s no forced trade on the long-momentum side. Barrick (B 40.88, -6.4%) is the notable SIP — down despite strong results (EPS +248% y/y) on a -5.63% gap, a pullback-in-an-uptrend to monitor rather than chase.
Today’s Watchlist
- CHRD — Energy 2LYNCH continuation, +5.5%, riding the oil bid; watch whether the Iran de-escalation headline caps the move.
- PBF — Strongest energy signal at +7.4% with 4.3 ATR%; refining leverage to crude near $82.
- APO — Finance continuation, +3.6% on clean RVOL; a rate-two-sided name into CPI.
- NVDA — 220.03 (+1.1%) pre-market bounce; the AI-financing narrative vs. Monday’s semi flush decides sector tone.
- HIMS — 29.90 (-5.9%) beat-and-guide-down; watch for a First Hour reversal or continuation lower.
- B — 40.88 (-6.4%) gold miner selling off on strong numbers; gold at $4,446 argues for a bounce setup.
Action Codes of the Day
- FHP (First Hour Pass) — With CPI tomorrow and 40-SMA breadth down to 60.48% from 64.7%, let the tape reveal its hand before committing; the 242/251 bull/bear split is a coin flip.
- CRT (Controlled Risk Taking) — The 27-signal Continuation book offers calculated long entries in energy/metals leadership (CHRD, PBF, STLD), but size down into event risk and hold stops tight.