Next Day Prep #314: Cautious to Cautious-Bearish: How One Headline Flipped the Tape – Tuesday 9/1/2026

Welcome to Wave Rider next day prep review today prepare tomorrow. Let's dive in I mean this morning we called the market cautious by the closing bell cautious bearish same day to verdict So what changed in between one her line changed. That's the whole story Mm-hmm. Okay, so walk me through it. We opened at 46.9% above the 40 day, right? Right. Yeah And by the close, breath had dropped to 38.5%. That's a real move in a single session and the trigger Confirmed US strikes on Iranian IRDC targets near the strait of Hormuz Crude ripped yields push to a 2026 high at 4.80% and the tape just rolled over. Oh wow So was the morning call wrong? Look, that's the thing the morning call was right for the morning The data updated when the news hit. It's like a forecast going from chance of rain to a storm warning by afternoon Mm-hmm and the gauge is back You know what completely the 4% gauge flipped hard 254 bears versus just 75 bulls the nine-month gauge went bearish too. This wasn't one sector cracking Right everything lower so basically every major index and the Russell 2000 took it worst down 1.2% Like small caps first classic Classic, so the one line verdict this was a real event driven regime downgrade not not noise Right, right. Okay, but the label changed. Let's look under the hood was this one headline or was something already building? Already building and this is the number that matters most to me go Percent above the 20 day fell from 23% to 7% over five days Wait five days five straight one bad reading is noise five in a row That's a diagnosis. That's distribution sellers in control Yeah, totally see that's the thing people miss when they only watch the index number exactly The S&P down under a percent look survivable the breadth trend tells you the truth underneath it So who actually held energy direct crude beneficiary VAST up 4.5% CVE up 3.1% both Darvas breakouts on the day Mm-hmm and the defensives they held but here's the nuance They had their own catalysts on top of the rotation EIX up 8.91% PCG up 5.92% on wildfire plan news M-A-R-N-A up 9.93% on vaccine data So it wasn't just flight to safety It was rotation plus a reason that combination is what made them work Right Okay, and the losers the losers were exposed to exactly the forces working against the tape Rate sensitive growth dot hit Tesla down 3.22% Amazon down 1.87% and momentum with no ballast Axon down 8.52% worst name in the S&P Oof The software ETF down 3.5% too no hedge no defense And I saw trucking was ugly Trucking theme down 4.18% RXO down 7.37% SAI down 6.39% And that's your classic oil cost recession for your tell right there Oh man Huh so even with the Darvas count at 32 the quality's thinning Here's the thing that's the key read the count looks large But concentration narrowed to energy and medical only fewer real setups is breath the roads So today's lesson was about ballast who had it who didn't who didn't that's it exactly Mm-hmm Okay, let's turn that into tomorrow's game plan what's first thing After hours gap risk del fell 6.84% into its print Palo Alto down 5.24% CRDO MDB GTLB also reported watch how those settle Right and the calendar dense ADP employment 53k consensus versus 44k prior factory orders crude inventories and the beige book in the afternoon Anything big after the close Broadcom snowflake HPE and tap and AI That's your real tech risk appetite read before anyone adds growth exposure Sure Okay, so give me levels. What's on the watch list 3.BE at $213.57 Continuation setup INTC at $88.97 sitting right at a demand zone And VIST at $74.69 Writing that energy breakout theme we talked about This ties right back to the day's lesson I mean, it's the practical output of it energy was the one clean theme so that's where you press Exactly All right two scenarios wool case Iran de escalates yields ease off $4.80 and breath on the 20-day rebuilds back above roughly 20% then you can breathe Mm-hmm and the bear case Further retaliation crude above $90 yields past $4.80 Breath breaks below 30% and confirms a full bearish regime And the forecast for tomorrow cautious bearish pending resolution of both threads So here's the takeaway to base down great wasn't a scare breath confirmed it five days running watch that 20% and 30% line tomorrow They'll tell you which path we take Set your alerts keep an eye on the 10-year and crude overnight alerts on BE INTC and VIST come back to Tomorrow and we'll see which scenario played out stay disciplined out there That's all for today's episode of wave writer next day prep review today prepare tomorrow see you next time