Next Day Prep

Next Day Prep #340: Calm Surface, Strong Undertow: Breadth Cracks Ahead of Bank Earnings – Monday 10/12/2026

Episode 3406:08

0:006:08

Episode summary

Despite a nearly flat S&P, 20-day breadth collapsed from 24% to 14% in a single session, exposing a bearish undertow beneath a quiet headline. The hosts break down why energy and select names like FICO held up while semiconductors and AI-infrastructure stocks got hammered, then preview tomorrow’s bank earnings and key levels to watch.

Chapter by chapter

Headline vs Hidden Breadth Crack

A flat S&P masks a sharp collapse in 20-day breadth while 40-day breadth ticks up, revealing a short-term vs long-term divergence.

Bull-Bear Gauge Confirms the Damage

The Bull-Bear sentiment gauge skews decisively negative, confirming the bearish call held through the close.

Thin Scans, Narrow Leadership

Trend-continuation signals dry up and Darvas Box basing patterns dominate, signaling a non-trending, stock-picker's tape.

FICO Breakout and the Institutional List

FICO's volume-backed breakout and a short list of institutional-grade names show selective strength still exists.

Energy Rallies, Semis and IT Bleed

Crude spikes on Saudi-Houthi escalation while the PHLX drops 2.7%, dragging IT down and bleeding into data-center power names; Enterprise Software bucks the trend.

Bank Earnings Set Tomorrow's Tone

JPM, Citi, Goldman, and Wells earnings headline tomorrow, with CPI and PPI as the bigger catalysts later in the week.

Watchlist Levels and Gap Scenarios

Key levels for FICO, SN, CPRI, and HDB, plus what a gap up versus gap down would mean for breadth and regime.

Forecast Stays Bearish, Risk Stays Controlled

Deteriorating internals keep the forecast bearish, calling for small position sizes and tight stops into bank earnings.

Key points

  • A flat headline index can hide a sharp deterioration in market internals — 20-day breadth collapsed from 24% to 14% in one session.
  • Divergence between short-term (20-day) and long-term (40-day) breadth is an early warning sign of cracking momentum beneath a calm surface.
  • Selective strength persists even in a weak tape: FICO, energy, and Enterprise Software names showed real volume-backed conviction.
  • Semiconductors and AI-infrastructure names led the downside, with the PHLX falling 2.7% and dragging the broader IT sector lower.
  • Tomorrow's bank earnings (JPM, Citi, Goldman, Wells) are the key tone-setter, with CPI and PPI as bigger catalysts later in the week.

Ticker charts

FICO

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 FICO in WaveFinder.

Daily bars through Oct 12, 2026.

MDT

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 MDT in WaveFinder.

Daily bars through Oct 12, 2026.

CEG

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 CEG in WaveFinder.

Daily bars through Oct 12, 2026.

DNA

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 DNA in WaveFinder.

Daily bars through Oct 12, 2026.

TWST

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 TWST in WaveFinder.

Daily bars through Oct 12, 2026.

SN

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 SN in WaveFinder.

Daily bars through Oct 12, 2026.

MYRG

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 MYRG in WaveFinder.

Daily bars through Oct 12, 2026.

MU

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 MU in WaveFinder.

Daily bars through Oct 12, 2026.

SNDK

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 SNDK in WaveFinder.

Daily bars through Oct 12, 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 Oct 12, 2026.

CIEN

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 CIEN in WaveFinder.

Daily bars through Oct 12, 2026.

NOTE

Chart unavailable

No daily price history for NOTE through Oct 12, 2026.

JPM

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 JPM in WaveFinder.

Daily bars through Oct 12, 2026.

C

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 C in WaveFinder.

Daily bars through Oct 12, 2026.

GS

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 GS in WaveFinder.

Daily bars through Oct 12, 2026.

WFC

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 WFC in WaveFinder.

Daily bars through Oct 12, 2026.

HDB

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 HDB in WaveFinder.

Daily bars through Oct 12, 2026.

CPRI

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 CPRI in WaveFinder.

Daily bars through Oct 12, 2026.

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