Situation Awareness: Cautious-to-constructive. The S&P 500 is set to open just above its baseline after notching fresh record highs last week and extending its weekly winning streak to three, but this is a low-catalyst week where index-level SPY/QQQ/IWM technical data is unavailable — so lean on futures and breadth rather than precise levels. S&P 500 futures sit +11 at 7,816 and Nasdaq futures +164 at 30,305, while Dow futures lag at -102/53,705 as mega-cap divergence persists. Trade mode: selective and watchful — let the tape confirm before pressing, with earnings-driven single names doing the work over index bets. Today’s context is defined by geopolitics (U.S.-Iran ceasefire expires today, Strait of Hormuz traffic near zero) and a barren U.S. data slate. Regime context — 64.46% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 204 bulls vs. 133 bears. The 5-day trend held firm into Friday’s record highs but breadth cooled, with the % above 20 SMA reading dropping sharply to 75% from 105%, signaling near-term momentum is flattening even as the longer-term structure holds.
SIP: GLOB GEMI VERI KULR
- What’s working: the Continuation/2LYNCH scan is moderately rich at 17 signals — respectable breadth. AAOI (+15.5%), KOPN (+13.9%), and AMD (+6.5%) lead the momentum names. Reversal scan is dry (1 signal: GM).
- Sector/volatility read (market closed — no live trending data): from Friday’s tape, ENERGY was the standout with the S&P energy sector +7.3% on the week; CHIPS strength shows in scan signals (AMD, KOPN); TELECOM active via AAOI. Weakest zones were consumer discretionary (-2.0%) and communication services (-1.0%) on mega-cap drag.
- Key event: U.S.-Iran ceasefire expires today with tanker traffic through the Strait of Hormuz “exceptionally low” — the dominant geopolitical swing factor for oil and risk.
- Market read: Friday was a quiet consolidation session after record highs — small/mid caps (Russell 2000 +1.1% week) outperformed mega-caps, pointing to broadening participation, a healthy backdrop but one that demands stock selection over index chasing.
- DEP watchlist: no Delayed 9M signals today — watchlist deferred to continuation leaders.
- SIPS: AAOI, AMD, ARW from the Continuation scan as swing candidates.
Today’s Market Narrative
Equity futures point to a mostly higher open as the market opens a week that may be relatively devoid of catalysts. The S&P 500 is poised to start just above its baseline after last week’s quiet-but-productive grind to new record highs and a third straight weekly gain. S&P 500 futures are up 11 points at 7,816 and Nasdaq futures are up 164 at 30,305, but the Dow lags with futures off 102 at 53,705 — a continuation of the mega-cap-versus-broad-market split that has defined this tape. Under the surface, last week told the real story: the Russell 2000 and S&P MidCap 400 each gained 1.1% and hit record highs, decisively outperforming the S&P 500’s 0.4% and the Nasdaq’s 0.1%, while the Dow slipped 0.6%.
The overnight session skewed positive across Asia despite soft data. China’s Shanghai Composite jumped 1.4% and Hong Kong’s Hang Seng added 1.3% even as July industrial production (4.5% vs. 5.0% expected) and retail sales (0.6% vs. 1.5% expected) both disappointed. Japan’s Nikkei rose 0.7% though flash Q2 GDP came in at just 0.3% q/q versus 0.5% expected, dragged by flat private consumption and weak capex. South Korea’s markets were closed for a holiday. Europe is trading near flat lines, with Italy’s MIB (+0.4%) leading on strength in STMicroelectronics, Ferrari, and banks.
The dominant force today is not economic data — the U.S. calendar is thin and none of today’s releases typically move markets. Instead, it’s geopolitics and the residual pull of oil. Crude is essentially flat near $82.55 with the U.S.-Iran ceasefire set to expire today; CNBC reports only five vessels passed through the Strait of Hormuz on Saturday. Stocks weathered a roughly 5.5% weekly climb in WTI last week, cushioned by tame inflation data that eased Fed-tightening fears. That resilience is the key tell — the market has absorbed the oil shock without breaking stride.
Corporate headlines are carrying the narrative in the absence of macro drivers. Memory names are bid premarket after Commerce Secretary Lutnick said the administration doesn’t want Apple buying Chinese memory chips. Alibaba (BABA +2.5% to 126.88) is looking to sell its Lingxi Games unit for over $2 billion and touts 3 billion AI model downloads. NVIDIA (NVDA +0.7% to 226.74) is in the news on multiple fronts — downsizing its guarantee on a $250 billion Ohio data center, planning the “most advanced open-source AI model,” and in talks to invest $3 billion in SB Energy.
Macro & Policy
The Fed backdrop turned friendlier last week and remains the primary support beam under equities. July CPI matched expectations (headline +0.1%, core +0.2%) and Thursday’s PPI came in slightly soft, together easing concerns that the Fed will need to hike in September. Friday’s weak retail sales print (-0.6% vs. +0.2% expected; control group -0.4%) reinforced the softening-activity narrative and will likely pressure Q3 GDP forecasts lower. That’s a market-friendly mix — cooling inflation plus decelerating growth keeps the tightening threat at bay.
The bond market’s response, however, has been notably muted, and that’s the wrinkle worth watching. Treasuries are set for a mostly flat start after Friday’s retreat. The 10-year yield sits at 4.69%, down just a basis point, while the 2-year holds at 4.17% and the 30-year at 5.27%. Strikingly, long-term yields did NOT break to new lows despite market-friendly inflation news — the 10-year actually rose four basis points on the week to 4.70%. Supply, deficit, and oil-price concerns are all in the mix keeping the long end sticky, and that elevated back end capped the market’s ability to fully capitalize on the soft data.
Geopolitically, the risk register is crowded: the Iran ceasefire expires today, Israel launched strikes against Lebanon, and the U.S. is preparing a new Iranian sanctions package. Separately, 50% tariffs on Canadian cement, wine, and hockey sticks take effect Wednesday as talks continue, and President Trump scaled back joint U.S.-South Korea military exercises. The Dollar Index is down 0.2% at 99.46, with EUR/USD +0.2% at 1.1592 and USD/JPY steady at 159.25. Gold is firm, +$18.70 at 4,456, and copper is up 1.1% — a reflationary tint in the metals.
Economic Calendar Today
- 08:30 ET: Empire State Manufacturing (Aug) — Consensus 11.0 | Prior 15.6 — A regional factory gauge; a soft print reinforces the cooling-activity story but rarely moves the tape on its own.
- 10:00 ET: NAHB Housing Market Index (Aug) — Consensus 34 | Prior 34 — Homebuilder sentiment; relevant given renewed focus on housing/rate sensitivity, but consensus is flat.
- 16:00 ET: Net Long-Term TIC Flows (Jun) — Prior $232.7B — After-hours foreign-flows data; not a market mover.
- Earnings today: Morning — none. Afternoon — FN reports after the bell. A very light start to earnings week.
- No Fed speakers or Treasury auctions of note scheduled. With a barren slate, expect narrow ranges and low conviction — a classic FHP/COUGAR environment where forcing trades is punished.
Earnings & Corporate News
The heavyweight earnings action is ahead, not behind — this is retailer week. Home Depot (HD) reports Tuesday, followed by a wall of names Wednesday: Lowe’s (LOW), Target (TGT), TJX (TJX), Estée Lauder (EL), and Analog Devices (ADI). Walmart (WMT), Deere (DE), and Alibaba (BABA) headline Thursday, with Ross Stores (ROST) after the bell. Given Friday’s weak retail sales, these prints will be scrutinized hard for the health of the consumer — the setup is a live T3A opportunity to position ahead of the read.
Analyst desks are active. Apple was upgraded to Buy from Neutral at Rothschild & Co Redburn with a $400 target — a meaningful call given AAPL (307.15, +0.4%) sits at the heart of the memory-chip policy story. Astera Labs (ALAB) was lifted to Outperform at Northland (tgt $350), Okta (OKTA) to Overweight at Wells Fargo (tgt $180), and Mobileye (MBLY) to Buy at Berenberg. On the downgrade side, Workday (WDAY) took a double hit — cut at both BTIG and Deutsche Bank (tgt $220) — and SentinelOne (S), Netskope (NTSK), and Shopify (SHOP, tgt $170) were all trimmed.
M&A and drug-trial catalysts are driving the premarket gappers. OABI is up 18.9% after signing an ion-channel deal with Eli Lilly and raising cash guidance; ARGX is +10.4% after its Phase 3 ALKIVIA myositis trial met its primary endpoint (with partners Zai Lab and HCM, the latter +5.2%). On the deal front, Madison Air is buying ebm-papst for $5.4 billion, TTM Technologies (TTMI +2.8%) is acquiring Epiq Solutions for ~$1.1 billion, and Diana Shipping (DSX +8%) withdrew its Genco bid. Intel (INTC +2.4%) got a vote of confidence as CEO Lip-Bu Tan bought ~$10 million in stock at $95. Watch the SIP casualties on the downside — Globant (GLOB) gapped -7% on a guidance cut, and Gemini (GEMI) fell on mixed Q2 results.
WaveFinder Signal Summary
The scan environment is moderately constructive. The Continuation/2LYNCH scan produced 17 signals — solid breadth that supports selective long entries — while the Reversal scan is essentially empty at just one name (GM). The standouts are momentum leaders: AAOI ripping +15.5% on 1.6 RVOL (TELECOM), KOPN +13.9% (CHIPS), and AMD +6.5% (CHIPS) at $514.39 with a clean 2LYNCH continuation setup. HCC (+4.0%, ENERGY) and ARW (+2.3%, ELECTRNCS) round out the tradeable names.
Breadth is holding but flattening. The % of stocks above the 40-day SMA is essentially flat at 64.46% versus 64.37% the prior session (+0.1pp) — stable longer-term participation. But the shorter-term % above 20 SMA dropped hard to 75% from 105%, and Bull 4% breakouts fell to 204 from 321. That’s the signature of a market catching its breath after record highs: the trend is intact but momentum is decelerating, arguing for patience over aggression today.
Today’s Watchlist
- AMD — 2LYNCH continuation at $514.39, +6.5%; leading the CHIPS complex, a clean momentum long if the semis hold their bid.
- AAOI — Explosive +15.5% on 1.6 RVOL; TELECOM/optical momentum name — watch for continuation but respect the 121.8% risk profile.
- BABA — +2.5% to 126.88 on the $2B Lingxi Games sale and 3B AI downloads; reports Thursday, a T3A pre-positioning candidate.
- AAPL — 307.15, +0.4%; Rothschild upgrade to Buy (tgt $400) plus the China memory-chip policy tailwind — the mega-cap to watch.
- NVDA — 226.74, +0.7%; multiple catalysts (open-source AI model, SB Energy stake) offset the Ohio data-center downsizing — bellwether for AI-trade conviction.
- HCC — $98.20, +4.0%; ENERGY continuation signal riding the sector’s 7.3% weekly surge as oil stays firm near $82.
Action Codes of the Day
COUGAR — Patience play. With a catalyst-light week, a thin U.S. data slate, and breadth momentum cooling (% above 20 SMA down to 75% from 105%), wait for the right pitch rather than forcing marginal setups.
T3A — Think 3 days ahead. The real week is retailer earnings — HD Tuesday, then TGT/LOW/TJX Wednesday and WMT Thursday — positioning ahead of the consumer read against Friday’s soft -0.6% retail sales is where the edge lies.