Next Day Prep #320 Bearish

Next Day Prep #320: Breadth Collapse: Why Tomorrow’s CPI Is the Line in the Sand – Thursday 9/10/2026

September 10, 2026 5:52

Tickers Mentioned

AEO NVDA TSM RDDT ELV AAPL ASO SWKS ORCL

Episode Summary

A brutal session saw breadth crater from 58% to 21% in a single day, confirming a flip to Bearish and signaling institutional distribution. With scans thinning out and even strong earnings unable to overcome the tape, all eyes turn to tomorrow's CPI print as the fulcrum for whether the market reclaims the trend or falls into correction territory.

Key Takeaways

Third straight losing session as WTI surged 6.6% above $102
Rate-hike odds jumped to 73.1% ahead of Friday CPI
Breadth collapsed: only 30% of stocks above 40-day SMA
Cooper -14.7% and American Eagle -13.9% on earnings
Semis reversed hard, SOX -2.7% with NVDA -2.4%

Situation Awareness: Bearish. Stocks fell for a third straight session as WTI crude exploded +6.6% to settle above $102, the 10-year yield jumped 11 bps to 4.94%, and rate-hike odds surged to 73.1% ahead of tomorrow’s CPI — the S&P 500 (-0.6%), Nasdaq (-0.7%), DJIA (-0.6%), and Russell 2000 (-1.0%) all closed lower with nine of eleven sectors red. SPY/QQQ/IWM specific prices and moving-average levels are (data unavailable) today, so we lean on index percentages and breadth. Trade mode for tomorrow: selective and defensive — respect the tape, keep risk tight into the 8:30 AM CPI print. The defining context was an inflation-and-oil vice: surging energy, fresh 2026 highs across the Treasury curve, and a hawkish global backdrop (BoJ rhetoric, ECB 25 bps hike). Regime context — 29.97% of stocks closed above their 40-day SMA (vs 38.2% prior day, regime shifted from Cautious-Bearish to Bearish), and the 4% Bull/Bear gauge shows 68 bulls vs. 247 bears. The 5-day trend shows a consistent down sequence, confirming downward momentum.

SIP: ASO COO AEO AVAV

What’s working: continuation setups thinned out (2LYNCH: 12 signals, D9M: 5, Reversal: 0) — momentum leadership is narrowing hard as breadth collapses.
Leading sectors: Communication Services (+0.45%), Financial (+0.04%), Technology (-0.16%); leading themes: Medical Research Equipment (+6.6%), Apparel/Shoes Retail (+2.71%), Travel Booking (+1.69%).
Key event: WTI +6.6% to $102.30 (+~11.5% on the week) plus a slightly cool core PPI masked by July upward revisions pushed rate-hike odds to 73.1% from 61.2%.
Regime threading: morning SA called Cautious-Bearish (38.2%), closing is Bearish (30.0%) — it shifted lower as the oil surge and yield spike broke breadth through the session.
DEP watchlist: RDDT ($155.36, +6.1%), SNAP ($5.53, +4.0%), NTSK ($15.08, +4.3%), S ($19.82), CURI ($2.70).
SIPS: RDDT ($155.36), ELV ($416.48, +4.9%), AAPL ($326.64, +3.6%) as relative-strength swing candidates.

Market Scorecard

Index moves (SPY/QQQ/IWM levels data unavailable): S&P 500 -0.6%, Nasdaq Composite -0.7%, DJIA -0.6%, Russell 2000 -1.0%, S&P Mid Cap 400 -0.9% — small and mid caps underperformed for a third session.
Breadth cratered: only 29.97% of stocks above the 40-day SMA (down 8.2pp) and just 21% above the 20-day SMA (down a massive 37pp day-over-day); 68 bulls vs 247 bears on the 4% gauge.
The tape carries distribution character — nine of eleven S&P sectors lower, the PHLX Semiconductor Index -2.7%, and materials (-1.5%) at the bottom on copper and precious-metal weakness (Gold -$51.80, Silver -$3.77).

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

Winners: Skyworks (SWKS +9.79%) and Qorvo (QRVO +6.77%) rallied on merger optimism; Reddit (RDDT +6.1%) and Comcast (CMCSA +2.36%) bounced; Academy Sports (ASO +5.3%) extended post-earnings momentum.
Second winning theme: Apparel/Shoes Retail (+2.71%) led by Designer Brands (DBI +10.84%) after raising full-year guidance; Medical Research Equipment (+6.6%) topped theme movers.
What failed: semiconductors reversed hard (SOX -2.7%) with NVIDIA (NVDA -2.36%) and TSM (-1.62%) leading despite TSM‘s 53.3% August revenue surge; earnings blowups hit Cooper (COO -14.67%) and American Eagle (AEO -13.91%); FCX -6.6% on copper weakness.
Breadth trend: a clean five-day down sequence with the 20-day breadth collapse (58%→21%) signaling accelerating internal deterioration, not a bottom.

Key Earnings & Economic Calendar

Cooper (COO -14.67%) was the day’s marquee blowup — Q3 revenue miss plus downside Q4 EPS guide of $1.05-$1.09 vs $1.19 consensus on CooperVision destocking; drew a wave of downgrades (BofA to $65, Baird to $61, Piper to $59).
American Eagle (AEO -13.91%) beat by $0.57 but fell on soft namesake-brand results and trimmed back-half operating income; apparel peers traded lower in sympathy.
Tomorrow’s data: August CPI at 8:30 AM ET (consensus +0.4%) and Core CPI (+0.1%) — the deciding catalyst for next week’s FOMC; also Univ. of Michigan Sentiment prelim at 10:00 AM (52.0) and Treasury Budget at 2:00 PM.
Earnings to watch: Kroger (KR) reports pre-market Friday. Note Oracle (ORCL) already reported after today’s close (settled $153.17, -5.23% into the print); Adobe (ADBE) and RH results are also out.

Tomorrow’s Watchlist & Setups

RDDT at $155.36 — relative-strength leader (+6.1%), appears in both 2LYNCH and D9M scans; watch for continuation if it holds above today’s close, though risk tag is elevated (116.5%).
ELV at $416.48 — strong reversal candle (+4.9%) on 2.1x RVOL after guidance reaffirmation; a defensive healthcare name working against a red tape.
AAPL at $326.64 — pushed +3.6% into its 4h supply zone ($328-$330); a clean break above there is the trigger, demand support near $313-$316.
ASO at $51.15 — post-earnings guidance raise, gapped +6.87% on 3.26x RVOL; watch for a tight pullback to hold the gap as a continuation base.
Sector focus: Energy and oil-shipping (Oil/Gas Shipping theme +1.19%, +15.96% 1-month) remain the momentum tailwind while crude stays bid — but fade into any Iran de-escalation headline.

Strategy Outlook & Scenarios

Bullish scenario: a cooler-than-feared CPI (below +0.4% headline / soft core) knocks rate-hike odds back under 60%, relieves yields, and lets breadth reclaim the 20-day SMA line — that’s the signal to add exposure.
Bearish scenario: an in-line or hot CPI cements the rate hike, drives the 10-year toward its 2023 peak (4.997%) and 30-year toward 2007 highs (5.408%), pushing pct-above-40SMA under 20% into correction territory.
Signal counts: 2LYNCH 12, D9M 5, Reversal 0 — continuation breadth is thinning versus prior sessions, confirming narrowing leadership.
Regime forecast: Bearish tilt persists into CPI; with breadth at 29.97% and falling, the base case is defensive unless the print delivers a genuine downside surprise.

Action Codes

BTFD — Buy The Dip only in confirmed relative-strength names (RDDT, ELV, ASO) that hold up while the index bleeds; wait for reversal confirmation, not falling knives like COO/AEO.
FHP — Focus on High-Probability, keep size small and risk tight (<2.5%) ahead of a binary CPI catalyst with breadth already sub-30%.

Summary & Final Thoughts

Game plan: stay largely flat into 8:30 AM CPI, let the print set direction, then trade the reaction — chase strength only if breadth reclaims the 20-day line.
Key risk: a hot CPI plus $100+ oil sends yields to multi-year highs and locks in a rate hike, extending the losing streak to a fourth session and tipping breadth toward correction.
Overall stance: defensive and selective — respect the Bearish regime, protect capital, and let the inflation data reset the odds.

Welcome to WaveRider next day prep, review today, prepare tomorrow. Let's dive in, reread days in a row, breath just fell off a cliff, and tomorrow morning we get the CPI print that decides everything, let's break down how we got here. So the morning call was cautious bearish, did it hold? It didn't hold, it got worse. How much worse? We opened a 38.2% above the 40-day line, by the close, 29.97%. That confirms a full flip to bearish. And honestly that wasn't even the scary part. Wait, that's not the scary part? No, the scary part is the 20-day breath. It went from 58% to 21% in one session. Hold on, say that again. 58 to 21, a 37.1-day collapse. Oh man, that's not softening, that's a cliff. Right, and the 4%-day flip-tard too, 68 bulls versus 247 bears. Yeah, that's ugly. 9 of 11 S&P sectors closed red, SOX down 2.7%, small and mid-caps under performing too. So what's the one-line verdict here? This is distribution, not noise. Five straight days down, the trend is real. See, that's the thing I want people to hear, it's the speed. Exactly, speed tells you it's institutional selling, not just profit-taking. Okay, so if the regime broke this fast, what actually worked in the scans today? Very little, and that's the tell. What do you mean? Our continuation signals thinned right out. 2LY dropped to just 12, D9M down to 5. Only 5? Only 5, and that's not random, that's a direct symptom of breath cratering. Right, because fewer stocks qualify as leaders when the trend underneath is failing. You got it, the pool just shrinks. So what did hold? The merger stuff held. SWKS up 9.79%, QRVO up 6.77%, both on merger optimism. So that's an idiosyncratic catalyst, not the tape. Exactly, nothing to do with the broader market. ASL also extended post earnings. Up 5.3% on 3.26 times relative volume. Now here's what I don't get. TSM posted a huge revenue surge and still dropped? Yeah, 53.3% August revenue growth, and it closed red anyway. How does that happen? Because good news can't overcome a bad tape, like an athlete setting a personal record but still losing the meat. Huh, so the environment just swamps the story. Every time when breath is breaking like this, NVDA read to whole SOX down 2.7%. Okay, and then the earnings blow-ups, COO was brutal. Down 14.67%, and here's the nuance. That was a guidance miss, not a surprise miss. What's the difference for a trader? A guidance miss means forward numbers came down, multiple downgrades followed. That's the market repricing the future. Hmm, an AEO? Same flavor, down 13.91%, even though they beat by 57 cents. Wait, they beat and still fell 14%. Soft namesake brand and a trimmed outlook. See, the beat didn't matter, the guide did. That's the lesson honestly, guidance over the print. Every time. Oh, and FCX down 6.6%, just tracking materials weakness. With that kind of damage under the surface, what do we need from tomorrow's CPI to change the story? CPI is the fulcrum, 8.30am, consensus is plus 0.4% headline, plus 0.1% core. And it feeds the FOMC next week. Right, so give me the bull case first. Cool print, rate high gods, drop under 60%, yields relieve, breath reclaims the 20-day line. And that's your ad exposure signal. That's the signal. But the bear case, hot or in line, cements the hike. 10-year pushes toward 4.997%. Breath could fall under 20% into correction territory. Oh, so under 20% is the line in the sand. That's the line. We already got a preview. O-R-C-L settled down 5.23% into the print after hours. And K-R reports pre-market tomorrow, right? Pre-market, yeah, early tape center. Give me the watch list names. R-D-D-T at $15.36, strong, but the risk tag is elevated at 116.5%, so respect that. Sprinting on a wet track. Perfect way to put it. Then ELV at $416.48, a reversal on 2.1 times volume, defensive healthcare working. AAPL's at $326.64, pushing into supply at $328.30. So the break above that zone is the trigger. That's the trigger, below you wait. Okay, so what's the game plan into the open? Stay largely flat. Let CPI set direction. Only chase strength if breath reclaims that 20-day line. So let me pull this together. Breath broke fast and hard, and that's distribution, not noise. Exactly, which makes tomorrow CPI more than data. It's the line between confirming bearish or reclaiming the tape. So stay flat into the print, watch the 20-day breath line for the real signal, and come back tomorrow to see which scenario played out. We'll see you then. That's all for today's episode of Wave Rider Next Day Prep. Review today, prepare tomorrow. See you next time.

Chapters

Today's Verdict

Signal Review

Tomorrow's Playbook

Power Hour #103 Bearish

Try WaveFinder

Market Scorecard

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

Key Earnings & Economic Calendar

Tomorrow’s Watchlist & Setups

Strategy Outlook & Scenarios

Action Codes

Summary & Final Thoughts

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