Situation Awareness: Cautious. The session opened with massive relief following the U.S.-Iran two-week ceasefire agreement, with broad-based rallies across equities and sharp oil pullbacks. SPY, QQQ, and IWM each rallied +2.3% to +3.0% with breadth improving meaningfully as 59% of stocks traded above their 20-day SMA (up from 104% prior day’s extreme short-covering bias), and 51.79% above the 40-day SMA (vs 37.77% prior). Trade mode for tomorrow: selective and risk-controlled. Today’s defining context: Geopolitical de-escalation drove a risk-on relief rally, led by industrials (+3.8%), consumer discretionary (+2.8%), and tech (+2.8%). The 5-day trend turned up 3 of 5 days, signaling early recovery in leadership breadth. Regime context — 51.79% of stocks closed above their 40-day SMA (vs 37.77% prior day, regime shifted from Cautious-Bearish to Cautious), and the 4% Bull/Bear gauge shows 622 bulls vs 106 bears. The 5-day trend turned up 3 of 5 days, signaling early recovery in leadership breadth.
SIP: AMAT AMZN META CCL
- What’s working today: 2LYNCH: 119, D9M: 69, Reversal: 79 signals fired — continued bullish momentum, especially in high-beta and AI-adjacent names
- Leading sectors: Industrials (+3.55% ATR), Technology (+3.29%), Consumer Discretionary (+3.74% ATR); leading themes: Airlines, Cruise Lines, AI Hardware/Infrastructure
- Key event: U.S. and Iran agree to two-week ceasefire; WTI crude fell $18.45 (-16.4%) to $94.40, sparking broad risk-on move
- Regime threading: morning SA called Cautious-Bearish (37.8%), closing is Cautious (51.8%) — shifted due to sharp improvement in breadth (40 SMA % rose +14.0pp) and 2-day oil pullback
- DEP watchlist: AMAT, AMZN, META, COR, CCL
- SIPS: AMAT, AMZN, CCL
Market Scorecard
- SPY +2.3%, QQQ +2.8%, IWM +3.0% — all reclaiming 200-day SMA with strong volume participation
- Breadth final: 59% above 20-day SMA (vs 104% prior), 51.79% above 40-day SMA (vs 37.77% prior), +14.0pp improvement
- Volume context: Above average, accumulation confirmed by strong closing strength and leadership in tech/industrials
Today’s Scorecard — What Worked & What Didn’t
- Winning sector: Industrials (+3.8%) — UAL +7.85%, DAL +3.75%, AMTN +8.1% on oil relief and earnings upgrade
- Winning theme: AI Hardware & Infrastructure — AMAT +8.8%, NVDA peers +4-5%, chip equipment ATR surged to 2.3–5.1%
- What failed: Energy — down -3.21% ATR, FANG downgraded to Neutral, TALO -7.7%, SM -5.5%, under pressure from oil drop
- Breadth final reading: 622 bulls vs 106 bears, regime shifted from Cautious-Bearish to Cautious with 51.79% above 40-SMA
Key Earnings & Economic Calendar
- Top earnings: LEVI +10.7% — beat & raise, EPS +$0.05, rev +14.1% YoY, raises FY26 guidance
- Second notable: DAL +3.75% — beats by $0.06, guides Q2 EPS below consensus but affirms strong summer demand
- Tomorrow’s economic data: 8:30 ET — Feb PCE Prices (consensus +0.4%), Core PCE (+0.3%), Initial Claims (215k), Personal Income & Spending; 10:00 ET — Feb Wholesale Inventories (-0.2%)
- Tomorrow’s key earnings: WDFC (after hours), NEOG & SMPL (pre-market)
Tomorrow’s Watchlist & Setups
- AMAT at $385.60 — breakout continuation (VCP), key level $382.50 (20d high), ATR 2.3%, RVOL 1.3x
- AMZN at $221.25 — reversal pullback completion (20d support at $210–212), +3.5% today, volume confirmation
- CCL at $28.03 — breakout confirmation, +11.23% on oil drop, volume surge (RVOL 2.0), key level $27.50
- ALB at $177.40 — sector rotation into chemicals/metals, ATR 0.9%, institutional accumulation (3,563 funds +0.7%)
- Focus sector tomorrow: Consumer Discretionary — cruise, airline, and homebuilder continuation play with oil at $94.40 and demand resilience intact
Strategy Outlook & Scenarios
- Bullish scenario: SPY closes >425 (5d high), 40-SMA breadth holds >55%, oil holds >$93 — confirms regime shift to Cautious-Bullish
- Bearish scenario: SPY drops below 418.5 (20d EMA), oil breaks >$98, or Iran/Israel conflict escalates — triggers regime downgrade to Cautious-Bearish
- Strategy signal counts: 2LYNCH: 119 (+3.29% daily change), D9M: 69, Reversal: 79 — all elevated vs prior, trend accelerating
- Tomorrow’s regime forecast: Cautious — breadth holds at 51.8%, but PCE data could trigger volatility and range extension
Action Codes
- CRT — Controlled Risk Taking: Regime is Cautious (51.8%), not bullish — enter only on confirmed breakouts, tight stop below 20d high, R:R ≥ 2:1
- T3A — Think 3 Days Ahead: PCE is Thursday; prep short-term calls (WDFC, NEOG), hedge energy short exposure, accumulate tech/industrials on dips into EMA20
Summary & Final Thoughts
- Tomorrow’s game plan in one sentence: Buy dips in oil-joy names (DAL, CCL, UAL) and AI infrastructure (AMAT, AMZN) on 20d EMA support, remain tactical amid PCE-driven volatility
- Key risk to manage: Iran’s conditional ceasefire; Israeli strikes in Lebanon could upend agreement and reignite oil volatility
- Overall market stance: selective — Cautious regime demands discipline and rapid reaction to news flows