Next Day Prep #315: Green Tape, Weak Breadth: Why Cautious Holds – Wednesday 9/2/2026

Welcome to WaveRider next day prep review today prepare tomorrow. Let's dive in S&P NASDAQ Dow all closed green today every major index up so why did our regime call stay stuck on cautious let's get into it yeah and that's the tension right the tape looked bulletproof mm-hmm okay so morning call was cautious at 42.7% above the 40 SMA where'd we we closed at 41.9% basically flat we held cautious right through the bell right I mean 10 of 11 sectors green though only real estate read right on the surface gorgeous underneath different story so what's the biggest surprise honestly the 4% bull bear gauge it violently flipped 104 bulls 334 bears yesterday to 220 bulls 58 bears today wait in one session one session that's a sentiment whipsaw huh so that's bullish though isn't it you'd think but here's the hidden crack percent of stocks above the 20-day SMA collapsed from 17% to 8% hold on breath got cut in half while the index rallied cut in half that's the whole episode right there you know what that's wild so what's the one line vert it's a relief rally on thin vacation style volume not conviction accumulation like vitals look fine but the blood works weak exactly that okay so if the tapes misleading let's find out what actually worked start me with the signals look signal counts were healthy actually continuation names at 15 momentum at 21 reversal bullish at 7 led by cyclicals semis internet and the star was steel steel STLD STLD up 5.79% to $247.64 and that breakout held for a reason yeah like why did hold when so much else was thin because it had a real catalyst the U.S. Canada trade focus and the whole sector confirmed new core was up 4.8% right alongside it so it wasn't one lonely stock right right sector wide that's the tell and our DDT that thing ripped up 9.31% its own catalyst plus a communication services tailwind charter of 8.74% cable one up 19.69% oh wow so the neighborhood was strong the neighborhood was strong that matters okay now the flip side Dell so basically Dell up 15.76% they raised the FY27 AI server outlook to $74 billion from 60 billion dollars that validates the whole AI infrastructure trade at the mega cap level yeah but watch what didn't transfer right right software software palo Alto beat q4 guided FY27 above consensus and dropped 9.31% wait really they beat and raised and still got yeah they got crushed here's the thing textbook when expectations are stretched and positioning's crowded good news isn't good enough oh man so the good student aces the test and the room still disappointed that's it exactly and it wasn't just palo Alto mango db down 13.54% palantir down 5.83% crowd strike down 5.42% I mean so the software ETF down about 2.6% on the group so the lesson is capitals rotating within tech not embracing it broadly hardware one software got sold broad tailwind plus a real catalyst equals hold and isolated good news with no sector support gets sold every time okay that rotation story is exactly what I want to tomorrow build me the play the playbook so basically after hours HPE was up 1.94% on the Dell read through that sets the AI infrastructure tone exactly and the watch the watch list three names STLD for continuation around 247 dollars and 53 cents our DDT at 158 dollars and 10 cents but size that small why small it's ATR is running 148.9% wide risk it'll whip you sure got it and the 3rd NVDA at $224.25 sitting right at key resistance $225 to $227 that's the semis that's the tail clears there the AI infiltrates breathing yeah totally what's on the calendar Thursday initial claims consensus 199k and the big one ISM non manufacturing at 10 a.m. Eastern consensus 53.5% plus the services PMI final right and earnings after the bell Lulu lemon Z scaler docu sign okay so give me the two scenarios bullish oil holds below $92 10 year capped near 4.80 to 4.82% then the cyclical and small cap broadening keeps going yeah and bearish an oil spike or a decisive break above that 4.82% yield high that repressures growth and software and risks 40 SMA breath cracking under 40% wow so oil and the 10 year are the puppet masters there the storm fronts check the radar before the hike so your regime forecast cautious again the index gains are real but 20 SMA breath at 8 percent is just too weak to upgrade so don't confuse a green index with a healthy market that's the whole thing trade the sectors with real catalysts and let breath earn the upgrade exactly perfect keep STLD our DDT and NVDA on your screen tomorrow watch that 20 SMA number and we'll debrief again same time trade safe everyone that's all for today's episode of wave rider next day prep review today prepare tomorrow see you next time