Next Day Prep #318: Breadth Cracks: Why a Calm Tape Just Got Downgraded – Tuesday 9/8/2026

Welcome to wave rider next day prep review today prepare tomorrow Let's dive in the S&P was only down six tenths of a percent today So why did we just downgrade the entire market regime? Let's get into it. Okay, so this morning We called it cautious breath right at 50% on the 40 day Did that hold it did not by the clothes we were at cautious bearish? Wait from 50 to what 38.9. That's an 11 point drop in a single session 11 points in one day. That's wild right and the 4% gauge backs it up 252 bulls against 382 bears. That's net selling plan and simple. Yeah But hold on wasn't the short-term breath actually up see that's the trap the 20 day breath improved to 47 from 23. Oh wow Huh, but that's just bounce noise on the surface the medium-term trend the 40 day That's the real blood work and it's getting worse. Right, so the index headline lied to us basically Totally S&P down point six, but the Dow was off 1.2 and underneath way more damage than any of those numbers suggest Yeah, totally and the biggest surprise for you Honestly that one drug trial failure and an oil spike could crack breath this fast two unrelated events same day compounding Oh, man one bad trial one barrel of oil That's the whole story right there. Okay, so given that shift. What did the scans actually show us? You know what this is the interesting part our continuation scans went completely quiet Mm-hmm quiet how zero breakout setups nothing to work with So basically why does that happen walk me through the mechanic so think about it a breakout needs stocks already writing Above their key averages when breath collapses fewer stocks even qualify the setups can't form right right Right, so no news isn't good news exactly. It's a defensive base building tape not a breakout tape Yeah, the reversal scan gave us a few though, right? Just three SE CRWD and MRK thin But the Dervis box scan that one lit 27 signals most productive scan of the day by far Why did Dervis work when continuation didn't that seems backwards? I mean, it's actually the perfect fit box setups reward consolidation not momentum and a base building tape is nothing but consolidation Exactly. Oh, that's a great point two names stood out GH and N-T-R-A both sitting near breakout both with real catalysts GH had an FDA approval N-T-R-A a fresh buy initiation Sure, so the markets whispering where it wants to go In pockets. Yeah, and speaking of pockets Semi's held up while everything else bled Semi's and optical those were the two lifeboats Intel up over 9% Lumentum up 11 Wow 11% on a red day on a corning Verizon fiberpacked. Yeah, and here's the thing only two of 11 sectors closed green Oh man only two which ones energy and utilities that's it that tells you how narrow the strength really was Right, so sector dispersion mattered way more than the index every time on a day like this Okay, so what do we do with all this tomorrow? Let's talk positioning first after hours UNFI beat on EPS missed revenue announced a $200 million buyback GameStop beat revenue and issued FY 26 guidance Anything actionable there not urgently the real catalysts of further out mortgage apps tomorrow morning or minor So what's the main PPI Thursday CPI Friday both land right before the September FOMC meeting Mm-hmm. So this is a data week not a stockpicking week Huh little of both but data drives it. Here's the fork cool inflation breath reclaims 50 Semi's keep leading. That's your bullish path Mm-hmm and the bearish one crude pushes toward 95 PPI runs hot breath breaks below 30 that triggers a full bearish downgrade. Oh wow Below 30 that's the line in the sand. That's the line and the watch list GH with a target of 203 on that FDA approval NTRA target 385 ATR medium around 3.1 and keep Intel and Luminum as your continuation of strength plays So stay selective until the data clears like selective and defensive don't force trades into an 11 point breath drop Exactly Okay, that's the lesson isn't it the tape looked calm and it it wasn't headline indices can look totally fine while breath quietly cracks underneath Always check what's happening beneath the surface before you trust the tape sure Well said So keep GH NTRA and those semiconductor names on your radar and stay disciplined into Thursday's PPI and Friday's CPI They'll decide whether this regime slips further or snaps back That's it for today's prep we'll see you at the next close that's all for today's episode of wave rider next day prep Review today prepare tomorrow. See you next time