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Next Day Prep #255 Bullish

Next Day Prep #255: Bulls Hold Despite Bearish Sentiment – Thursday 5/7/2026

May 7, 2026 4:29
Tickers Mentioned
AMDFLEXUBERNVDADISINTCARMSMCIGLW
Episode Summary
The market rose on strong AI/tech leadership even as bearish sentiment hit a 6-month high. We break down why the Bullish regime held, what signals worked today, and how to position for tomorrow’s data-driven volatility.
Key Takeaways
  • AI and earnings continue to drive market gains.
  • Semiconductors lead the tech sector rally.
  • Oil price decline supports consumer discretionary stocks.
  • Breadth remains mostly supportive but shows signs of softness.
  • Monitor initial jobless claims for economic signals.
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Next Day Prep — 2026-05-07: Bulls Flex Again as Tech Soars

Situation Awareness: Bullish. The market extended its record rally, driven by AI optimism and strong earnings, overpowering a rise in Treasury yields. Trade mode for tomorrow: look for early strength, but manage risk exposure as breadth has softened. Today’s defining context was renewed demand for technology, especially semiconductors. Regime context — 66.23% of stocks closed above their 40-day SMA (vs 70.45% prior day, regime held at Bullish), and the 4% Bull/Bear gauge shows 226 bulls vs. 289 bears. The 5-day trend shows a mixed pattern with upward momentum checked by profit-taking signals.

SIP: AMD FLEX UBER NVDA

  • What’s working today: 2LYNCH generated decent signals, with standout strengths in Software stocks: 2LYNCH: 57, D9M: 59, Reversal: 194
  • Leading sectors: Technology (4.12%), Industrials (0.46%), Consumer Staples (0.05%); leading themes: AI and earnings surprises.
  • Key event: AMD‘s standout Q1 earnings report fueled a broad rally in semiconductor stocks.
  • Regime threading: morning SA called Bullish (70.5%), closing is Bullish (66.23%) — regime held, but breadth shows minor erosion from recent highs.
  • DEP watchlist: AAL CVS FLYW MCHP OSCR
  • SIPS: ADBE COST CRWD WST ADSK

Market Scorecard

  • SPY: data unavailable, QQQ: data unavailable, IWM: data unavailable
  • Breadth: 66.23% above 40-day SMA, trending down.
  • Volume: further data unavailable.

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

  • Winning Strategy: Technology sector fueled by AI announcements and strong earnings reports advanced with a 4.12% sector ATR. Standout performer was AMD, upgraded to Outperform.
  • Second Winning Theme: Industrials benefited from UBER‘s earnings and falling oil prices, jumping 2.6%.
  • What failed: The energy sector declined -4.1% due to falling crude oil futures settled at $95.22 per barrel, as did the Utilities sector (-1.4%).
  • Breadth: 66.23% of stocks above their 40-day SMA, down from 70.45% yesterday.

Key Earnings & Economic Calendar

  • Walt Disney (DIS) beat earnings, advanced 7.47% following its first earnings release under new CEO Josh D’Amaro.
  • Flex (FLEX) beat earnings and revenue estimates; the headline news is Flex’s plan to spin off its Power and Cloud portfolio (“SpinCo”), creating two independent publicly traded companies by Q1 of calendar 2027.
  • Tomorrow’s Economic Data: Preliminary Q1 Productivity, Preliminary Q1 Unit Labor Costs, weekly Initial Claims, Continuing Claims, February and March Construction Spending, weekly natural gas inventories, March Consumer Credit.
  • Tomorrow’s Key Earnings: AAON ACIW ACMR ALGM COLD APPN ARW ASPN AVNT BCE BDX BSY… (pre-market). TXG AFRM ABNB AKAM ALRM AHR AMN AAOI ARLO ARWR AORT AGO ASTH AVPT ACLS… (after-hours).

Tomorrow’s Watchlist & Setups

  • ACMR at $59.08 — showing momentum breakout, monitor volume for confirmation.
  • IREN at $60.98 — testing weekly supply; monitor volume and strength near the $62.38 level.
  • DDOG – driven by recent strength with room to run.
  • ASTX at $24.11 — pullback to demand zone at $20.21, watch for bounce.
  • Technology – continue focus on this sector driven by AI and strong earnings.

Strategy Outlook & Scenarios

  • Bullish Scenario: Initial jobless claims come in lower than expected, and continued positive earnings reports sustain upward momentum, continuing new record highs.
  • Bearish Scenario: Disappointing economic data, combined with geopolitical risk factors (Iran), cause a market pullback, breaking key support levels. This could trigger a regime downgrade.
  • Strategy Signal Counts: 2LYNCH: 57, D9M: 59, Reversal: 194 (Reversal up, D9M stable, 2LYNCH slightly down from recent strength).
  • Tomorrow’s Regime Forecast: Bullish – though keeping a close watch on breadth deterioration.

Action Codes

  • 2LYNCH – AMD‘s breakout sets the stage for more continuations as the breadth remains supportive.
  • FFM – Plenty of names showing strength and trend continuation giving opportunities for low-risk entries.

Summary & Final Thoughts

  • Tomorrow’s game plan involves managing risk while capitalizing on AI-driven tech and industrial earnings strength.
  • Key risk to manage is a potential reversal due to overbought conditions and geopolitical uncertainties.
  • Overall market stance is selective.
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