Next Day Prep

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

Episode 3185:43

0:005:43

Episode summary

The S&P closed down just 0.6%, but underlying breadth collapsed from 50 to 38.9 on the 40-day, triggering a Cautious-Bearish downgrade. The hosts break down why continuation scans went silent while Darvas box setups surged, and lay out the bullish/bearish fork ahead of Thursday’s PPI and Friday’s CPI.

Chapter by chapter

Regime Downgrade to Cautious-Bearish

40-day breadth plunges from 50 to 38.9 despite a modest 0.6% S&P decline, triggering a downgrade.

Short-Term Bounce Masks Medium-Term Damage

20-day breadth improved but the 40-day trend reveals deeper underlying weakness.

Drug Trial Failure and Oil Spike Collide

Two unrelated shocks compound on the same day to crack market breadth.

Continuation Scans Go Silent

Zero breakout setups appear as collapsing breadth shrinks the pool of qualifying stocks.

Darvas Box Scan Fires 27 Signals

Consolidation-friendly Darvas setups thrive in a base-building tape, spotlighting GH and NTRA.

Semis and Optical Are the Lifeboats

Intel and Lumentum surge while only Energy and Utilities close green among eleven sectors.

After-Hours Movers and Data Calendar

UNFI and GameStop earnings recap ahead of a data-heavy week with PPI and CPI looming.

The Bullish and Bearish Fork

Cool inflation and reclaimed breadth versus hot PPI and a sub-30 breadth breakdown.

Watchlist: GH, NTRA, Intel, Lumentum

Specific price targets and continuation plays to track into Thursday and Friday's data.

Key points

  • Headline index moves can mask severe internal damage — 40-day breadth dropped 11 points in a single session while the S&P fell only 0.6%.
  • A collapsing breadth environment kills continuation/breakout setups but creates ideal conditions for consolidation-based strategies like Darvas box scans.
  • Sector dispersion (only 2 of 11 sectors green) told a more accurate story than the index headline.
  • This week's regime direction hinges on PPI (Thursday) and CPI (Friday) ahead of the September FOMC meeting.
  • Below 30 on the 40-day breadth measure is the key line that would trigger a full Bearish downgrade.

Ticker charts

GH

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open GH in WaveFinder.

Daily bars through Sep 8, 2026.

NTRA

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open NTRA in WaveFinder.

Daily bars through Sep 8, 2026.

SE

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open SE in WaveFinder.

Daily bars through Sep 8, 2026.

CRWD

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open CRWD in WaveFinder.

Daily bars through Sep 8, 2026.

MRK

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open MRK in WaveFinder.

Daily bars through Sep 8, 2026.

INTC

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open INTC in WaveFinder.

Daily bars through Sep 8, 2026.

LITE

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open LITE in WaveFinder.

Daily bars through Sep 8, 2026.

UNFI

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open UNFI in WaveFinder.

Daily bars through Sep 8, 2026.

GME

Open in app
SMAUp (filled)Down (hollow)

Use left and right arrows to move through history, plus and minus to zoom, ] and [ to open the next and previous event, Escape to close its card, Enter to open GME in WaveFinder.

Daily bars through Sep 8, 2026.

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