Next Day Prep

Next Day Prep #351: AI Rally Masks Weak Market Breadth – Monday 10/26/2026

Episode 3516:05

0:006:05

Episode summary

Stocks opened the week higher as renewed AI enthusiasm lifted semiconductors and growth names, with Tesla surging on an upgrade and Anthropic filing its IPO. Breadth improved but the regime held Cautious ahead of a torrent of mega-cap earnings and Wednesday’s FOMC decision.

Key points

  • The market stayed in a cautious regime: breadth improved to 50.34% of stocks above their 40-day SMA, but bears outnumbered bulls 215 to 130 on the 4% gauge.
  • The tape is selective and relies heavily on semiconductors and AI to lift everything else.
  • Tesla closed at $391.62, up 5.21%, on a Barclays upgrade. The playbook is to buy strength above $400 while trimming into supply.
  • For tomorrow, bulls need QQQ to reclaim its 50-day moving average at $725.43, and a bearish failure would pull SPY back under $758.68.
  • Stay patient through Wednesday's FOMC decision and the mega cap earnings, and let setups prove themselves.

Ticker charts

SPY

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 SPY in WaveFinder.

Daily bars through Oct 26, 2026.

QQQ

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 QQQ in WaveFinder.

Daily bars through Oct 26, 2026.

TSLA

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 TSLA in WaveFinder.

Daily bars through Oct 26, 2026.

NVDA

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 NVDA in WaveFinder.

Daily bars through Oct 26, 2026.

BA

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 BA in WaveFinder.

Daily bars through Oct 26, 2026.

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