Next Day Prep #230 Bearish

Next Day Prep #230: Mega-Cap Drag & Structural Bearishness – Tuesday 3/24/2026

March 24, 2026 5:06

Tickers Mentioned

CNXC CF MOS SPY QQQ AMD PLTR MSFT GOOG SOC

Episode Summary

The market’s weakness isn’t broad—it’s concentrated in mega-caps while small/mid-caps hold. Analyst explains why regime alignment, volume, and catalysts matter more than sentiment alone.

Key Takeaways

SPY closed below 200-DMA with broad weakness in mega-cap tech
CNXC earnings miss and margin compression spark sector-wide de-risking
Energy and hardware leads while software and communication services lag
Geopolitical ambiguity persists — Iran denies ceasefire talks, oil rebounds to $92
Breadth remains constrained — only mid/small caps outperforming

Next Day Prep — March 24, 2026

Today’s Verdict

SA: Bearish. The market failed to sustain Monday’s rebound, with mega-cap tech weakness and rising yields capping rallies despite oil’s late-week surge. The S&P 500 closed below its 200-day MA at 521.8, confirming bearish momentum. Geopolitical ambiguity and margin compression fears dominate sentiment — clarity requires resolution on Iran or earnings season.

SIP: Top movers: ALVO (–5.9%), BIOA (–3.0%), IBRX (+10.1% on FDA warning noise), FENC (–6.2% post Q4 miss).

Bearish regime threading held — morning 24.4% above 40 SMA → close at 25.5%. Regime held firm despite modest midday bounce.
Today’s action aligned with the morning call, but the *lack of follow-through* was the real story: the market showed resilience in the broader index (R2K +0.5%) but failed to lift mega-caps — confirming structural weakness overhead.

Market Scorecard

SPY closed at 521.82 (–0.40%), QQQ at 480.15 (–0.82%), IWM at 213.49 (+0.47%). Nasdaq underperformed by 48 bps vs S&P, driven by Mega-Cap Growth ETF (–1.3%).
Breadth: 159 bullish / 219 bearish signals (4% sentiment bucket). 5-day trend: neutral-to-bearish — 5-day MA of % above 20 SMA fell to 19% (down from 22.3% Friday).
Market volume was light (avg ~2.1B shares on NYSE), suggesting distribution not accumulation. SPX PUT/CALL ratio rose to 0.89 (elevated fear), while OI dropped in 520 calls.

Today’s Scorecard — What Worked & What Didn’t

Energy sector won: RSPG at +2.1% — top sector. CF Industries (CF +5.61% @ $126.92) and Mosaic (MOS +4.73% @ $25.22) surged on Strait of Hormuz risk. SOC (+6.2% @ $16.79) on Chevron offtake news.
Hardware & semis held up: LITE (+10.02% @ $801.99), GLW (+8.49% @ $142.09), DELL (+7.53% @ $176.98) led hardware beat. iShares GS Hardware ETF (+2.1%) offset soft software names.
Software & mega-cap tech failed: Software ETF (–4.2%), MSFT (–2.68%), GOOG (–3.28%), META (–1.84%). AI hype faded as guidance concerns surfaced (e.g., CNXC’s EPS miss).
Breadth remains weak: Only mid/small caps (R2K +0.5%, MID +0.8%) outperformed. Equal-weight S&P +0.1% vs cap-weighted –0.4% — confirming leadership vacuum.

Key Earnings & Economic Calendar

Concentrix (CNXC –19.8% @ $26.49) — EPS miss ($2.61 vs $2.65), Q2 EPS guidance $2.57–$2.69 vs $2.72 est. Revenue flat but margin (11.8%) compressed 180 bps.
Estée Lauder (EL –9.86% @ $71.47) — confirmed Puig talks. Consumer discretionary underperformed despite falling oil.
Wednesday, Mar 25 — 10:30 AM ET: Weekly crude inventories (prior +6.16M). 8:30 AM: Jan NFP revision & import/export prices. 7:00 AM: MBA Mortgage Index.
Wednesday pre-market: CHWY, CTAS, KC, PAYX, PDD. After-hours: EPAC, FUL, JBS, JEF, KRMN, MLKN, NAVN, WS.

Tomorrow’s Watchlist & Setups

AMD at $178.32 — VCP forming: 3-day consolidation (80.3–179.5) with rising volume. Key trigger: $180.50 breakout on >2.5x RVOL. R/R: 1.8:1 if cleared.
PLTR at $26.84 — breakout pullback. Formed daily bull flag (high $27.90), but closed near support ($26.70). Entry on >2x RVOL > $27.20. Catalyst: British financial regulator contract scaling.
SOC at $16.79 — momentum breakout from $15.20–$16.50 range. R/R 2.1:1 (stop $15.95, target $20.30). Fuel: Chevron offtake, Strait risk, and oil at $92+.
CLB at $71.25 — pre-earnings setup. Guidance cut already priced (Q1 outlook lowered March 24). R/R: 1.6:1 if breakout > $72.90.
Focus on Materials & Industrials — fertilizer and rail names (MOS, CF, UNP) have structural tailwinds from supply chain risk + fertilizer demand.

Strategy Outlook & Scenarios

Bullish scenario: SPY closes >526.50 (200-DMA resistance) with >55% up volume on >2.5x avg vol → confirms regime shift. Catalyst: Iran ceasefire breakthrough or strong NFP revs.
Bearish scenario: SPY closes <516.00 (next support at 513.00) + breakout failure in SOX → triggers 2LYNCH shutdown. Trigger: Iran rejects ceasefire terms or CNXC-like EPS surprise in health tech.
Signal counts: 2LYNCH=37 (–3 vs yesterday), D9M=87 (same), Reversal=140 (+8). Momentum still tilted bearish; reversal count rising but no confirm signal yet.
Regime forecast for Mar 25: Cautious Bearish. Breadth remains constrained, and 200-DMA resistance is technical anchor. Watch 25.5% above 40 SMA for deterioration.

Action Codes

BTFD — Oil-led rally in materials (CF, MOS, SOC) is oversold on margin compression; but only enter on dips (<1.5% risk) with tight stops.
CRT — Volatility in mega-caps (MSFT, GOOG, AAPL) suggests controlled risk: use options straddles or defined-risk spreads, not direct shares. 3-day horizon for AI summit volatility (Mar 26–27).

Summary & Final Thoughts

Tomorrow’s game plan: Fade the mega-cap weakness (MSFT, GOOG), lean into oil/ Materials (CF, MOS, SOC), and wait for SPY break above 526.50 before chasing longs.
Key risk: EPA/DoD escalation in Iran — if 82nd Airborne deployment confirmed, oil could spike >$96, triggering sell-the-fact in equities.
Overall stance: Selective — favor hardware, materials, and AI infrastructure names with clean balance sheets (AMD, LITE, DELL), avoid software with margin pressure (CNXC-type name).

Welcome to WaveRider Next Day Prep. Review today, prepare tomorrow. Let's dive in. Okay, here's the thing that jumped out at me this afternoon. Small caps were up, mid caps were up, and mega caps? Yeah, they were dragging the whole market down. Mm-hmm, exactly. It wasn't a bounce, it was a distortion. Right. R2K plus 0.47%, MID plus 0.8%, and QQQ down almost a full percent. But SPY still closed below 200 DMA at 521.8. So what's the verdict? Bearish. No ambiguity. Regime opened cautious, closed bearish. And the break below 200 DMA? It stuck. Wait, was the midday rally just noise? Yeah. Light volume. Only 2.1B on the NYSE. And only 19% of the S&P above its 20 SMA. That's distribution, not accumulation. Mm-hmm. And the equal weight S&P? Plus 0.1% versus cap-weighted S&P at minus 0.4%. So the only reason the index didn drop harder was because mecca caps like MSFT and Goog were bleeding despite all the AI hype Oh wow So it not that the market weak it that it can rally efficiently Exactly. Like a car with only rear wheels spinning, movement exists, but it's not efficiently moving forward. You feel that drag, right? So let's talk about the names that did work today. AMD held its VCP pattern, 80-30 to 179-50 consolidation, then broke out at 180-50. Why that setup? Good question. It formed after the broader bottom, in a low vol window, and volume spiked on the final push. Classic accumulation signal. Right, right. And that only works because regime is bearish. Yeah, exactly. You saw it with SOC, too. Broke out at 19-20 with 2.1 to 1 RR. and why it worked? Tangible catalyst, Chevron offtake plus straight-of-Hormuz risk. Huh. So tech hardware held, but software collapsed. Software ETF down 4.2 percent. Exactly. Risk-off rotation into tangible value, not just tech. Light plus 10 percent, Dell plus 7.5 percent. But the real story? Margin compression. Like CNXC dropping minus 19 percent on EPS miss Yeah not just the miss but the trend Margin compressed minus 180 BPS Guidance cut. Structural, not idiosyncratic. ELs minus 9.86% on POOG talks showed the same pressure. Wait, so demand fragility greater than cost defration? Yeah, exactly. You see it in how energy's popping despite weak fundamentals. It's not about Chevron's earnings. It's about straight risk pricing in real time. RSPG plus 2.1% on pure geopolitics. So what's next? I mean, tomorrow's playbook. What should traders actually watch? CNX sees gap-down reaction first, then straight headlines. No big data drops, so it's all earnings plus geo noise. OK, top setups? AMD at 180.50, RR 1.8 to 1, SOC at 19.20, stop 15.95, PLTR at 26.84, stop 24.10. All have defined risk and only work because regime is bearish. Right, and if SPY gaps up? Only then consider long setups in hardware and materials if it clears 526 But if it gaps down wait for SPY greater than 521 and rising volume to confirm reversal And what the regime forecast Bearish to cautious only if SPY holds above 521.8 and volume hits 2.3b+. Otherwise, stay defensive. So the big lesson tonight? Fade mega cap weakness, lean into materials and hardware, but only with setups, not sentiment. Patience isn't caution, it's discipline. Yeah, the market's not weak because it's down. It's weak because it can't rally efficiently. Exactly. When small caps outperform, will mega caps lead lower? That's structural, not cyclical. So before you log off, check SPY's position relative to 526.50 and the 200 DMA. Only take setups that meet regime criteria. No exceptions. Right. And remember, trading isn't about catching every move. It's about catching the right moves. And check your SPY position before you log off. Seriously. Thanks for joining us tonight. See you tomorrow. This is WaveRider. Stay sharp. That's all for today's episode of Wave Rider Next Day Prep. Review today, prepare tomorrow. See you next time.

Morning Dose #234 Neutral

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Next Day Prep — March 24, 2026

Today’s Verdict

Market Scorecard

Today’s Scorecard — What Worked & What Didn’t

Key Earnings & Economic Calendar

Tomorrow’s Watchlist & Setups

Strategy Outlook & Scenarios

Action Codes

Summary & Final Thoughts

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