═══════════════════════════════════════════

WEEKLY REGIME VERDICT

═══════════════════════════════════════════

BEARISH

Posture: no new entries — cash and existing positions only

Downgraded from NEUTRAL. All four invalidation conditions have now fired, and Stage 2 is broken on both SPY and QQQ.

This is the first BEARISH call this system has produced. Everything below explains why, and why the response is mechanical rather than a judgement call.

───────────────────────────────────────────

WHAT THE STRUCTURE SAYS

───────────────────────────────────────────

A week ago, SPY holding its 20 SMA was the last condition still standing. It is not standing now.

SPY closed at 764.29 against a 20 SMA at 766.88 — below it, and below the 8 EMA at 764.55 as well. QQQ did the same thing: 714.88 against a 20 SMA at 715.67. Both indices are still above their 50 and 200 day averages, so this is not a trend reversal. But Chapter 2’s test is price above the 20, above the 50, above the 200, and neither index passes it now.

That is the whole ballgame for entries. The system does not deploy capital when SPY and QQQ fail to confirm. Not a smaller size, not the cleanest setup only — no new entries.

IWN is further gone. At 219.69 it sits below its 8 EMA at 221.37, below the 50 SMA at 222.85, and below the 20 SMA at 223.43. Small caps broke first and broke hardest, which is the usual order.

One thing worth being clear about: Friday was a green session. SPY closed up 0.85%, QQQ up 0.87%. The rally did not reclaim anything. A bounce that leaves you below the 20 SMA is a bounce inside a broken structure, not a repair of it.

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WHAT BREADTH SAYS

───────────────────────────────────────────

Every single reading fell, and three of the five are now in contraction territory.

MMTW dropped to 29.94 from 45.63. Seven out of ten broad-market stocks are below their own 20-day average. That is not a pullback in leadership, that is most of the market going down together. S5FI fell to 38.76 from 46.71, breaking the 40 line — fewer than four in ten S&P names hold their 50-day. MMFI at 39.65 did the same thing from 50.31.

The longer-horizon readings held up better. S5TH at 56.46 and MMTH at 51.68 are both down but still above 50, which is what separates this from a structural bear market. The damage is in the near term, and it is broad.

Two things sit underneath those headline numbers.

The concentration gap kept narrowing — 200-day gap at +4.78 from +6.31, the 50-day gap now essentially closed at −0.89 from −3.60. Normally that reads as healthy. It does not read that way here. The gap is closing because large caps are falling toward the broad market, not because the broad market is catching up. Convergence in a decline is not the same signal as convergence in an advance.

New highs versus new lows fell to 0.65x from 2.18x. Below 1.0 means more stocks are making new lows than new highs. That reading has not been below 1.0 at any point in the readings this system has published.

───────────────────────────────────────────

WHAT MACRO SAYS

───────────────────────────────────────────

The 10-year closed at 4.969%, with an intraday print of 4.992%. A week ago it was 4.784%. That is nearly nineteen basis points in five sessions, and it puts the yield within a third of a basis point of 5%.

August CPI landed Friday and it is the reason. Headline rose 0.4% month over month and held at 3.4% annually, both as expected. Core came in at 0.3% against a 0.2% forecast — only nine of seventy-three economists surveyed by Bloomberg had that number. Gasoline surged 3.9% and accounted for more than a third of the monthly increase, feeding straight through from the oil move.

Rate-hike odds for the 16 September FOMC went from roughly 48% in mid-August to 85.6% by Friday. The market has moved from a coin flip to treating a hike as the base case in one month.

VIX is the odd reading. It closed at 15.85, down 11.2% on the day, after closing near 17.85 on Thursday. So volatility spiked as the 10-year went through 4.9%, then collapsed on Friday’s relief rally. A VIX under 16 with breadth at these levels is not a sign of safety — it is a sign that protection is cheap because nobody has bought it yet.

───────────────────────────────────────────

WHAT ROTATION SAYS

───────────────────────────────────────────

Two sectors are confirmed on both windows. Nine are losing ground on both. There is no emerging tier at all this week — not one sector that is behind structurally but gaining tactically.

Energy is the only genuine leader, and it is a big one: RS 1.1540 against SPY, accelerating at +109 a week, trend strength the highest on the board. Brent gained 8.7% on the week and WTI 9.4%, peaking near $108 and $104 before easing Friday on news that Iran and Gulf states will meet in Oman about the Strait of Hormuz. Saudi Arabia shut its East-West pipeline as a precaution. That is the sector and the story in one line.

Comm. Services is the second confirmed name, barely — RS 1.0115, tactical +0.16%. It is ahead by a rounding error rather than by conviction.

Technology is the interesting failure. Its weekly slope is +82, the second-strongest acceleration on the board, but its structural RS sits at 0.9884 and it lost 0.23% against SPY over the last ten sessions. A week ago Tech was the sharpest emerging signal in the scan, up 4.40% tactically. That reversed completely in five sessions. Whatever was carrying it was not broad.

Health Care is the worst deceleration at −159 a week, with Materials, Discretionary and Industrials all worse than −129. Those four plus Real Estate and Staples are behind SPY on both measures and falling away from it.

A board with nine laggards and no emerging tier is not telling you where to look. It is telling you there is nowhere to look.

───────────────────────────────────────────

MACRO — WHAT LAST WEEK DELIVERED

───────────────────────────────────────────

→ CPI, Friday: headline +0.4% monthly and 3.4% annual, both in line. Core +0.3% against +0.2% expected, annual core 2.4% — the smallest since spring 2021, but the monthly print is what moved rates. Gasoline +3.9%, over a third of the total increase. Housing +0.3%, the most in three months.

→ Oil, all week: Brent +8.7%, WTI +9.4%. Brent peaked near $108 Thursday, WTI above $104, before Friday’s pullback on the Oman talks. Saudi Arabia shut the East-West pipeline; Houthi forces reportedly advanced to Perim Island.

→ Rates: 10-year at 4.969%, intraday 4.992%.

Fed funds: 3.50%–3.75%. CME FedWatch now prices an 85.6% chance of a 25bp hike on 16 September.

───────────────────────────────────────────

MACRO FLAGS — WEEK AHEAD

───────────────────────────────────────────

→ Tuesday 15 – Wednesday 16 September: FOMC. Decision Wednesday 14:00 ET, press conference 14:30 ET. NO NEW BUY STOPS Wednesday — cancel by Tuesday’s close under the calendar rule.

→ Friday 18 September: monthly options expiration.

→ Monday 14 September: Gulf Cooperation Council diplomats meet their Iranian counterpart in Oman on the Strait of Hormuz.

The whole week is bracketed. Even if the regime permitted entries, Wednesday is blocked by the calendar rule and Friday is opex. And the Oman meeting Monday is the single headline most likely to move the oil condition in either direction.

What the Fed says on Wednesday matters more than what it does. An 85.6% priced hike is not a surprise. Whether Warsh frames it as one-and-done or as the start of a sequence is what repricies the 10-year, and the 10-year is what has been driving equities for three weeks.

───────────────────────────────────────────

VERDICT RATIONALE

───────────────────────────────────────────

The downgrade is mechanical, not discretionary.

Two weeks ago one condition had fired. Last week three had, and the report said plainly that the distance to the next downgrade had shrunk to almost nothing — SPY was holding its 20 SMA by roughly a tenth of a percent. This week it closed below it. That is the fourth condition, and it arrived alongside Stage 2 breaking on both indices.

There is no interpretation required here, and that is the point of writing the conditions down in advance. When they were set, the purpose was to remove the argument that always shows up at exactly this moment — the one that says the selloff is overdone, the bounce Friday was strong, the 200-day is still far below. All of that may be true. None of it changes what the four conditions say.

What this does not mean: it does not mean a crash is coming, and it does not mean selling everything. Both indices are still above their 50 and 200-day averages. Existing positions keep their Retest Shields and are managed exactly as planned. The change is narrow and specific: no new entries until the structure repairs.

What would upgrade this back to NEUTRAL: SPY reclaiming and holding its 20 SMA at 766.88, which is 0.34% away. That is the first thing to watch, and it is close enough to happen on any single session.

What would take it lower: SPY losing the 50 SMA at 758.62, roughly 0.75% below Friday’s close. That would put the index below three of its four averages and change the conversation from no-new-entries to protecting what is open.

The four conditions, as they stand:

→ SPY closed below its 20 SMA at 766.88 — FIRED, closed 764.29

→ Broad short-term breadth under 50 — FIRED, MMTW at 29.94

→ US 10-year above 4.75% decisively — FIRED, 4.969% with an intraday 4.992%

→ A Middle East supply headline moving oil sharply higher — FIRED, Brent +8.7% on the week

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WHAT HAPPENS TO THE WATCHLIST

═══════════════════════════════════════════

There is no watchlist this week, and no Trade Plan.

That is not a gap in the publishing schedule. It is the system working. When the regime says no new entries, producing a list of setups to arm would be publishing something you are not permitted to act on — which is how process discipline quietly becomes process theatre.

For the record, last week’s five names are all dead independently of the regime: CRWD and DLO closed below their 8 EMAs with MACD reversing, MD failed on volume dry-up at 99% of average, OSCR broke the dynamic ceiling, and PARR was left with two cents of headroom after its ratchet. Every one of them failed on its own numbers before the regime call was made.

Next Sunday the scan runs as normal. If SPY reclaims 766.88 and holds it, the watchlist comes back with it.

───────────────────────────────────────────

Trade Tight · Think in R · Focus on Process

— Radu

KISS Trading

───────────────────────────────────────────

⚠️ Educational only. Not financial advice. Always DYOR.

═══════════════════════════════════════════

THE TRADE

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THE FUNNEL

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Scanned this week: 177

Reached chart review: 17

Passed all six filters: 10

Published below: 5

Rejection rate: 41%

Regime: NEUTRAL — 30-50% capital, cleanest only

Seven names failed, on five different causes. No single

filter dominated…

Read more

═══════════════════════════════════════════

WEEKLY REGIME VERDICT

═══════════════════════════════════════════

NEUTRAL

Posture: 30–50% capital — cleanest setups only

Held from last week. The downgrade fired seven days ago on breadth, and nothing repaired it — two more conditions joined it instead.

Everything below explains that board. No number is repeated twice — if it is on the dashboard, this text tells you what it means instead.

───────────────────────────────────────────

WHAT THE STRUCTURE SAYS

───────────────────────────────────────────

All three indices still read Stage 2 — price above the 20, 50 and 200 on SPY, QQQ and IWN. That is the only thing keeping this NEUTRAL rather than something worse, and it clears Chapter 2’s requirement that both SPY and QQQ confirm before capital deploys.

But the stack has a crack in it. On both SPY and QQQ the 8 EMA has slipped below the 20 SMA. Nothing structural has broken — the longer averages are still climbing underneath — but the short-term engine has stalled. That is the difference between a market that is consolidating and one that is still advancing.

Key levels for the week:

→ SPY support: 769 (20 SMA — Friday’s low was 769.00) · resistance: none, at highs

→ QQQ support: 715 (8 EMA) / 711 (50 SMA) · resistance: 722

Small caps diverged Friday: IWN closed +0.40% while SPY fell 0.39% on the payrolls print. Worth watching, not worth trading on its own.

───────────────────────────────────────────

WHAT BREADTH SAYS

───────────────────────────────────────────

MMTW ticked up to 45.63 from 42.41 — direction is right, level still is not. It needs to reclaim 50 and hold it, not bounce off the floor for one session. That condition remains fired.

S5FI is the week’s real damage: down to 46.71 from 52.88, the sharpest single move on the board, and now below the 50 line alongside its broad-market equivalent. MMTH and MMFI are essentially flat.

One genuine improvement: the concentration gap narrowed hard. Large-cap breadth was running 10.87 points ahead of the broad market last week; that is 6.31 now, and on the 50-day horizon it flipped negative — broad breadth is marginally ahead of the S&P. The market got less top-heavy in a week where it also got weaker. New highs versus lows improved to 2.18x from 1.75x, still well short of the 4.91x reading three weeks ago, but moving the right way.

───────────────────────────────────────────

WHAT MACRO SAYS

───────────────────────────────────────────

VIX at 14.52, essentially unchanged, in a week that delivered a payrolls beat, a yield spike and an oil shock at the same time. That is not calm — that is a market that has not hedged. A low VIX is the absence of protection being bought, not the presence of safety.

US10Y is the tile that matters. Close at 4.784%, an intraday print of 4.810%, decisively through the 4.75% line this system has watched for a month. And for the first time, it came with the equity confirmation the condition requires: yields jumped and stocks fell in the same session. That clause was written precisely to separate growth repricing from risk repricing, and this week it stopped protecting the verdict.

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WHAT ROTATION SAYS

───────────────────────────────────────────

Two sectors are confirmed on both windows: Energy and Financials. Energy is the obvious one, tracking the same Iran conflict that fired condition four. Financials confirming alongside it carries more weight — that sector does not move on a single headline, and its structural and tactical readings agree.

The one to watch is Technology. It sits behind SPY structurally, yet posted the single largest tactical move on the board over the last ten sessions. That is not a gentle rotation; it is a sharp reversal from a lagging sector. Before reading it as leadership building, check whether the move is broad or whether one or two mega-caps are carrying the entire print.

Health Care is the clean divergence in the other direction. Second-strongest structural reading on the board, but fading tactically — leadership that peaked and is cooling, not leadership that is forming. The laggards are Materials, Discretionary, Real Estate, Staples and Industrials, and Industrials is the worst of them on both measures. That grouping lines up exactly with the yield move; those are the duration-sensitive names that get hurt when the 10-year rips.

The search order at the bottom of that board is search order. It is not permission. Energy has already run — its weekly trend strength is the highest on the board, which means you should expect to look there first and find very little that clears the dynamic ceiling. A sector this extended fails the 1.5× ADR% test on most names inside it.

───────────────────────────────────────────

MACRO — WHAT LAST WEEK DELIVERED

───────────────────────────────────────────

→ Nonfarm Payrolls, Friday: +162,000 vs +55,000 expected — nearly triple consensus. Unemployment held at 4.1%, wage growth unchanged at 3.1% year-over-year.

→ Oil, all week: Brent up 6–7% and WTI up close to 9%, the strongest weekly gain since July, as US-Iran strikes resumed after roughly a month’s pause and Israel threatened Iranian infrastructure directly. Hormuz tanker traffic ran far below its ten-day average through the week.

→ Rates, Friday: the 10-year closed at 4.784%, the 2-year at its highest since January 2025.

Fed funds: 3.50%–3.75%. The payrolls beat pushed September hike odds to roughly 58%, up about nine points in a day. The 17 September meeting is now genuinely two-sided.

Geopolitics: US-Iran hostilities resumed for the first time in about a month. This is the line item driving both the oil move and condition four.

───────────────────────────────────────────

MACRO FLAGS — WEEK AHEAD

───────────────────────────────────────────

→ Monday 7 September: Labor Day — US markets closed

→ Thursday 10 September, 8:30 ET: PPI and Core PPI, August

→ Friday 11 September, 8:30 ET: CPI, August — the pivotal print. Consensus looks for +0.4% headline (3.4% annual) and +0.2% core, which would slow the annual core rate to 2.3%. This release decides whether 17 September is a hold or a hike.

Calendar note: markets are closed Monday, so the first arming evening this week is Monday night for Tuesday’s open — the loop shifts by one day. No monthly opex this week; that is 18 September. The evening to treat carefully is Thursday, arming into Friday’s CPI. A gap through the trigger on an inflation surprise is exactly what the Gap Rule exists to handle.

───────────────────────────────────────────

VERDICT RATIONALE

───────────────────────────────────────────

NEUTRAL holds, but what sits underneath it changed materially. Last week one of four conditions had fired. This week three have: breadth, unchanged and still below 50; the 10-year, newly through 4.75% with the equity confirmation clause finally satisfied; and the Middle East supply headline, fired unambiguously for the first time since the checklist was written.

The only condition still standing is SPY holding its 20 SMA, and it is standing by roughly a tenth of a percent. Structure is the only thing separating this from a Bearish call, and it is intact by the same razor-thin margin. That is worth saying plainly rather than dressing up: the verdict did not change, but the distance to the next downgrade shrank to almost nothing.

What upgrades this: MMTW reclaiming 50 and holding it more than a single session, a de-escalation headline that lets oil give back its weekly gain, or a soft CPI Friday that pulls the 10-year back under 4.75%. Any one of those starts unwinding a condition. Nothing this week did.

What invalidates this verdict:

→ SPY closes below its 20 SMA at 769.05 — the last one standing

→ Broad short-term breadth under 50 — FIRED, MMTW at 45.63

→ US 10-year above 4.75% decisively, with equity confirmation — FIRED, 4.784% close, equities red the same session

→ A Middle East supply headline moving oil sharply higher — FIRED, Brent +6–7% on resumed US-Iran strikes

═══════════════════════════════════════════

WATCHLIST + TRADE PLAN (PAID)

═══════════════════════════════════════════

Paid subscribers receive immediately below:

→ The Weekly Watchlist — every name scanned, every name rejected, and the exact number that killed each one

→ Entry triggers, Retest Shield levels, and R-targets

→ The Trade Plan of the Week — fully sized, ready to execute

Everything is decided before Monday opens. You execute. The system does the thinking.

Upgrade at kisstrading.uk to access the full system.

───────────────────────────────────────────

Trade Tight · Think in R · Focus on Process

— Radu

KISS Trading

───────────────────────────────────────────

⚠️ Educational only. Not financial advice. Always DYOR.

═══════════════════════════════════════════

THE PICK

═══════════════════════════════════════════

RPD — Rapid7, Inc.

IT Services │ NASDAQ

Sector: Technology (XLK, RS 0.967 — LAGGARD both windows)

Pattern: SETUP B — Pure BOS

Setup Quality: B+

Why this one over the rest of the watchlist:

→ 3.52 points of ceiling headroom — the most on the list,

worth three to fo…

Read more

═══════════════════════════════════════════

THE FUNNEL

═══════════════════════════════════════════

Scanned this week: 135+

Reached chart review: 17

Passed all six filters: 6

Rejection rate: 96%

Regime: NEUTRAL — 30-50% capital, cleanest setups only

Six names qualified. The regime permits three. That gap is

the whole story of this week, and the…

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═══════════════════════════════════════════

WEEKLY REGIME VERDICT

═══════════════════════════════════════════

NEUTRAL

Posture: 30-50% capital — cleanest setups only

Downgraded from Bullish Caution. Invalidation condition two

fired on Friday’s close.

Everything below explains that board. No number is repeated

twice — if it is on the dashboard, this text tells you what

it means instead.

───────────────────────────────────────────

THE CONDITION THAT FIRED

───────────────────────────────────────────

For three consecutive weeks this report published the same

four conditions with the same numbers. The second one read:

broad short-term breadth under 50.

On Friday it closed at 42.41. Not marginally under. Seven and

a half points under, after a single session that took nearly

ten percent off the reading.

That is the entire mechanism working as designed. The

condition was written down before it fired, published where

anyone could read it, and repeated unchanged through three

weeks in which the tape looked fine. It was not adjusted when

breadth was strong and it was not renegotiated when it broke.

The archive is the point — anyone can call a regime after the

fact, and the only thing separating a regime call from an

opinion is that the trigger existed in public beforehand.

Two separate paths reach the same verdict this week, which is

the strongest form of confirmation this framework produces.

The first is the fired condition. The second is Chapter 2’s

own rule: when SPY and QQQ disagree on the regime, the

overall read is Neutral until both confirm. QQQ closed below

its 20-day average. They disagree.

───────────────────────────────────────────

WHAT THE STRUCTURE SAYS

───────────────────────────────────────────

SPY holds its Stage 2 test by thirteen hundredths of a point.

That is not a margin worth defending in prose. Treat it as a

coin balanced on its edge rather than as evidence of strength.

QQQ produced the week’s genuine irony. The condition this

report named as the upgrade trigger for three straight weeks

— the 20-day average closing back above the 50-day — finally

happened. And in the same week, price fell below the 20-day.

The obstacle was cleared and a new one appeared behind it.

That is worth sitting with, because it is what a topping

process looks like from the inside: each individual problem

resolves, and the aggregate does not improve.

IWN lost its Stage 2 stack outright, having held it every

week since this report began.

Key levels for the week:

→ SPY support: 753.96 · resistance: 775.30

→ QQQ support: 712.06 · resistance: 724.13

───────────────────────────────────────────

WHAT BREADTH SAYS

───────────────────────────────────────────

All six measures fell on Friday. All six now sit below their

own moving averages. That uniformity is the finding — not the

level of any single bar, but the fact that no horizon was

spared. Long-term participation, intermediate, short-term and

new-high leadership all deteriorated in the same session.

The short-term bar took the worst of it and is the one that

crossed a published line. But the leadership measure is the

one that should unsettle you most: new highs led new lows by

nearly five to one a week ago, and now lead by less than two.

That is not a market rotating. That is a market where the

number of stocks making progress has collapsed.

The concentration gap widened on both horizons after

narrowing last week. A week ago this report noted that

intermediate participation in the broad market had caught up

with large caps, and called it the week’s genuine improvement.

It reversed. Say that plainly rather than quietly dropping it

— a framework that only reports its confirmations is not a

framework.

───────────────────────────────────────────

WHAT MACRO SAYS

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Warsh delivered his first Jackson Hole keynote as Chair on

Friday and told the room the Fed has work to do if inflation

does not return to target. Odds of a September rate increase

went from roughly a third to roughly three-fifths in the space

of a speech. The two-year yield rose eleven basis points.

Read the sequence carefully, because it is the week in

miniature. Core PCE on Wednesday held steady year-on-year,

which was widely taken as buying the Fed time. Nvidia beat on

Wednesday night and technology was the only sector to advance

on Thursday. Then Friday repriced everything on nine words

from a Chair the market has no history with.

The ten-year finished at the top of its range, still below the

level named in condition three but closer than it has been.

VIX is under all four of its averages while the bond market

prices a hike into a market whose breadth just broke. That

combination is not calm. It is nobody paying for protection

in the week they most needed it.

───────────────────────────────────────────

MACRO — WHAT LAST WEEK DELIVERED

───────────────────────────────────────────

→ Core PCE, Wednesday: 3.3% annual, unchanged from June.

Headline 3.7%. Both well above the 2% target.

→ Q2 GDP second estimate, Wednesday: the advance reading of

1.5% annualised was the starting point, and nothing in the

revision changed the picture of an economy growing slowly.

→ Warsh at Jackson Hole, Friday: the closest a Chair has come

to acknowledging that rates may need to rise. September

hike odds jumped to roughly 57% from 35%.

Nvidia reported Wednesday after the close and beat. Technology

was the only S&P sector to advance on Thursday — a single

company’s result carrying an entire index for one session

while eleven sectors declined.

Geopolitics: fresh Iran sanctions news pressured markets on

Monday alongside US-Canada tariff friction. Energy finished

the ten-session window up just 0.16% despite it, so the supply

premium that drove the last two weeks has stopped expanding.

───────────────────────────────────────────

MACRO FLAGS — WEEK AHEAD

───────────────────────────────────────────

→ ISM Manufacturing and JOLTS, Tuesday 10:00 ET

→ ADP employment and the Fed’s Beige Book, Wednesday

→ ISM Services, Thursday 10:00 ET — Waller speaks the same day

→ August jobs report, Friday 08:30 ET — consensus around

+45,000 to +58,000 after July’s outright loss of 23,000

Also: Broadcom, Dell and Palo Alto report through the week.

Next FOMC is 16 September. Next CPI is 11 September.

Calendar note: four clean arming evenings — Sunday, Monday,

Tuesday and Wednesday. Wednesday evening is the last, because

the rule against arming into a Friday payrolls print makes

Thursday evening a skip. That is twice the working week this

list had seven days ago, which matters less than it sounds

given the posture above.

───────────────────────────────────────────

VERDICT RATIONALE

───────────────────────────────────────────

The honest version of this week is that the downgrade was

mechanical and required no judgement at all. A number crossed

a line that had been published for three weeks, and a second

independent rule in Chapter 2 reached the same conclusion by a

different route. There was no moment where I looked at the

tape and decided it felt worse. That is the whole design: the

decision was made in advance by someone with no position and

no opinion about Friday.

What that verdict costs is real. Neutral means 30 to 50%

capital and only the cleanest setups, in a week that offers

four arming evenings and a scanner that will still produce

names. The temptation on a week like this is to note that SPY

technically held, that QQQ’s old obstacle finally cleared, and

that a single Fed speech is a thin reason to change posture —

all three of which are true, and none of which are the rule.

What upgrades this: broad short-term breadth closing back

above 50, with QQQ reclaiming its 20-day average. Both, not

either.

What invalidates this verdict:

→ SPY closes below its 50 SMA at 753.96

→ Broad short-term breadth under 25

→ US 10-year decisively above 4.75%, with equity confirmation

→ VIX closes above its 200 SMA at 18.38

Note the change. The first two conditions have moved down a

level, because the verdict moved down a level — the question

is no longer what breaks Bullish Caution but what breaks

Neutral. The third carries forward unchanged. The fourth

replaces the Middle East supply condition, which stopped

being the live risk when energy went flat.

───────────────────────────────────────────

WHAT ROTATION SAYS

───────────────────────────────────────────

Three sectors sit above SPY on both windows. Health care leads

on both and has done so for three weeks — the only genuinely

durable leadership on this board.

The week’s clearest signal is a divergence inside energy.

XLE carries by far the strongest structural acceleration of

any sector, and finished eighth of twelve on ten-session

performance. Structural slope measures where capital has been

going. Tactical performance measures where it went last

fortnight. When they separate this widely, the slope is

describing history.

Industrials is the collapse. Down 4.93% absolute over ten

sessions, bottom of the tactical column, and the steepest

negative slope on the board by a wide margin. Aerospace and

defence fell more than 7% in the same window. Something

structural is happening in that complex and it deserves

watching rather than a confident explanation from me.

Technology sits in the laggard quadrant despite Nvidia’s beat.

One company advancing on one session did not lift the sector’s

ten-session standing, which is a useful reminder about the

difference between a headline and a trend.

The search order at the bottom of that board is search order.

It is not permission — and in a Neutral regime that

distinction does more work than usual.

═══════════════════════════════════════════

WATCHLIST + TRADE PLAN (PAID)

═══════════════════════════════════════════

Paid subscribers receive immediately below:

→ The Weekly Watchlist — every name scanned, every name

rejected, and the exact number that killed each one

→ Entry triggers, Retest Shield levels, and R-targets

→ The Trade Plan of the Week — fully sized, ready to execute

Everything is decided before Monday opens. You execute.

The system does the thinking.

Upgrade at kisstrading.uk to access the full system.

───────────────────────────────────────────

Trade Tight · Think in R · Focus on Process

— Radu

KISS Trading

───────────────────────────────────────────

⚠️ Educational only. Not financial advice. Always DYOR.

═══════════════════════════════════════════

THE PICK

═══════════════════════════════════════════

OSCR — Oscar Health, Inc.

Health Insurance │ NYSE

Sector: Health Care (XLV, RS 1.101 — CONFIRMED both windows)

Pattern: SETUP B — Pure BOS

Setup Quality: A

Why this one over the rest of the watchlist:

→ 63% ceiling consumption — the lowest of eight names

scanned, …

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═══════════════════════════════════════════

THE FUNNEL

═══════════════════════════════════════════

Scanned this week: 250+

Reached chart review: 8

Passed all six filters: 5

Rejection rate: 98%

Regime: BULLISH CAUTION — selective, full size on

what qualifies

Two hundred and fifty names went into the scanner. Eight came

out the far side clean eno…

Read more

═══════════════════════════════════════════

WEEKLY REGIME VERDICT

═══════════════════════════════════════════

BULLISH CAUTION

Posture: Selective — full size on what qualifies

Held from last week. Third consecutive week, and none of the

four published conditions fired.

Everything below explains that board. No number is repeated

twice — if it is on the dashboard, this text tells you what

it means instead.

───────────────────────────────────────────

WHAT THE STRUCTURE SAYS

───────────────────────────────────────────

Two of three indices carry a fully ordered Stage 2 stack. QQQ

still does not: its 20-day average remains under its 50-day,

which is the single condition standing between this market and

full deployment. But the gap has halved in a week — it was 8.8

points last Sunday. That is the first genuine progress on this

condition since it appeared.

All three indices closed under their 8 EMA. That is uniform

short-term cooling, not structural damage, and it is what a

market looks like when it digests a bad Wednesday and recovers

by Friday.

Key levels for the week:

→ SPY support: 762.33 · resistance: 770.00

→ QQQ support: 709.19 · resistance: 720.00

───────────────────────────────────────────

WHAT BREADTH SAYS

───────────────────────────────────────────

Every bar moved up on Friday and every bar sits inside the

normal 40–70 band. Nothing crossed 70, 50 or 40. Mid-week the

S&P 500’s 50-day bar fell to roughly 54 during the yield shock

and recovered the entire move in a single session — breadth

recorded stress and absorption in the same five days.

The concentration gap is the finding. On the 50-day horizon it

has effectively closed: the broad market is now keeping pace

with large caps on intermediate participation, where a week ago

it was not. The 200-day gap is unchanged and still wide, so the

long-horizon concentration story stands. But the scanner does

not fish in the long horizon. It fishes in the pool that just

caught up.

───────────────────────────────────────────

WHAT MACRO SAYS

───────────────────────────────────────────

VIX is under all four of its averages and fell again on Friday.

That is not safety. That is nobody paying for protection going

into a week that holds a Fed keynote and the single largest

earnings print of the quarter.

The 10-year is the tile that matters. It closed at the top of

its nine-month range, and Friday’s session high came within a

basis point of the level named in condition three. The rise is

a grind rather than a spike — the two-week move does not clear

the significance threshold — but the cause is not benign. The

Treasury doubled its long-maturity buybacks on Wednesday, yields

fell, and the entire move was gone by Thursday’s close. The

intervention was tried and it did not hold.

Then Friday resolved the tension in the least comfortable way

available: the strongest composite business survey in more than

four years lifted equities and yields at the same time. Growth

repricing, not risk repricing. That distinction is doing all the

work in this verdict.

───────────────────────────────────────────

WHAT ROTATION SAYS

───────────────────────────────────────────

Read where the two windows disagree. XME is the week’s clearest

inflection: it is still behind SPY on both relative-strength

windows, yet it carries the strongest acceleration on the entire

board by a wide margin. Behind structurally, leading now. That

is what an emerging leader looks like before the ratio catches

up to the slope.

The mirror image is technology. The raw scanner verdict promotes

XLK and QQQ to building leadership, but both fail the confidence

test on the daily window, and the ten-session tape has them near

the bottom of the board. A relative-strength ratio improving off

a low base while price goes nowhere is not leadership. It is a

denominator effect, and the board’s own legend says to stay

aside.

Meanwhile financials hold their level but have turned sharply

negative on direction. Capital is not rotating into growth this

week. It is rotating into energy, healthcare and hard assets —

a war-premium and inflation-hedge trade, not a risk-appetite

trade.

The search order at the bottom of that board is search order.

It is not permission. Expect to look at energy first and find

nothing armable — a sector up 5.75% in ten sessions with a live

supply premium will fail the dynamic ceiling on almost every

name inside it.

───────────────────────────────────────────

MACRO — WHAT LAST WEEK DELIVERED

───────────────────────────────────────────

→ Flash Composite PMI, Friday: 56.0 vs 54.0 expected — a

52-month high

→ Flash Services PMI, Friday: 56.8 vs 54.0 expected — a

20-month high

→ Flash Manufacturing PMI, Friday: 53.2 vs 53.9 expected — a

5-month low

→ FOMC July minutes, Wednesday: many participants judged

further tightening likely necessary if inflation does not

decline

Fed funds: 3.50–3.75%. Fifth consecutive hold, and the July

vote was 9–3 with every one of the three dissents cast for a

hike — the most hawkish split on this committee in a decade.

Geopolitics: the naval blockade of Iranian ports remains in

force and the Strait of Hormuz is still not normally transited.

The energy premium showing up in this week’s rotation is that,

not a demand story.

───────────────────────────────────────────

MACRO FLAGS — WEEK AHEAD

───────────────────────────────────────────

→ Core PCE, Wednesday 08:30 ET — consensus +0.2% monthly,

3.3% annual. This is the September input.

→ NVDA earnings, Wednesday after the close — with CRM, CRWD,

HPQ, OKTA and SNPS the same session

→ Jackson Hole, Thursday to Saturday — Warsh delivers his

first keynote as Chair on Friday morning

Also on the tape: a $70B five-year auction Wednesday 13:00 ET,

and the annual nonfarm payroll benchmark revision Friday.

Calendar note: two clean arming evenings this week — Sunday for

Monday, and Monday for Tuesday. Skip Tuesday evening; Core PCE

prints before Wednesday’s open. Skip Wednesday evening; NVDA

reprices the entire index complex on Thursday’s open regardless

of what your individual name is doing. Skip Thursday evening;

a first Jackson Hole keynote from a Chair the market has no

vocabulary for is FOMC-grade risk, and the rule against arming

into an FOMC exists for exactly this. Monthly opex was 21

August, so 15:45 ET volume readings are reliable all week.

───────────────────────────────────────────

VERDICT RATIONALE

───────────────────────────────────────────

The tape improved this week and the verdict did not. Breadth

broadened, the QQQ condition halved its gap, and Friday closed

green across every index — and none of that upgrades anything,

because the condition that defines full deployment is still

unmet and the rule does not care how close it got. In the other

direction, Wednesday delivered a failed Treasury intervention

and a 700-point Dow session, and that does not downgrade

anything either, because no published condition fired. The

verdict sits between the two because that is exactly what the

evidence supports: an intact uptrend carrying a live rates

problem into an event-heavy week.

What upgrades this: QQQ’s 20-day average closing back above its

50-day on a daily close. Dated, observable, and now roughly half

the distance it was seven days ago.

What invalidates this verdict:

→ SPY closes below its 20 SMA at 762.33

→ MMTW below 50

→ US10Y decisively above 4.75%, with equity confirmation

→ A Middle East supply headline moving oil sharply higher

One note on the first condition. The number moved from 756.20 to

762.33 this week. The condition did not change — the average it

points at did. Updating a level because the level moved is

arithmetic. Moving a level because you do not like where it sits

is something else entirely, and the archive is here so you can

tell the difference.

═══════════════════════════════════════════

WATCHLIST + TRADE PLAN (PAID)

═══════════════════════════════════════════

Paid subscribers receive immediately below:

→ The Weekly Watchlist — every name scanned, every name

rejected, and the exact number that killed each one

→ Entry triggers, Retest Shield levels, and R-targets

→ The Trade Plan of the Week — fully sized, ready to execute

Everything is decided before Monday opens. You execute.

The system does the thinking.

Upgrade at kisstrading.uk to access the full system.

───────────────────────────────────────────

Trade Tight · Think in R · Focus on Process

— Radu

KISS Trading

───────────────────────────────────────────

⚠️ Educational only. Not financial advice. Always DYOR.

On Sunday I published a rejection ledger — all fourteen names

that failed the KISS filter, with the specific number that

killed each one.

One of them was OII. Two numbers against it: RSI at 65.23,

above the 65 ceiling. And an entry-to-stop distance of 8.28%

against a volatility budget of 7.62%.

This morning it passes.

Nothing about the system changed. No threshold was widened,

no stop was nudged, no exception was made. Here is what

actually happened, because the mechanism is the lesson.

RSI came down on its own. Three sessions of sideways action

cooled a stretched oscillator back into the band. That is

what consolidation does — it lets an extended name become

un-extended without giving back price.

The risk number is the more interesting half. On Sunday there

was no defined horizontal structure on the chart, which meant

the only legitimate place to anchor a stop was below the 20-day

average — a long way from where price was trading. Four

sessions later there IS a structure: a rim, a floor, a base.

The anchor moved closer to price because the chart built

something for it to hold onto.

The distance did not shrink because I decided to accept more

risk. It shrank because the stock did the work.

WHY THIS MATTERS MORE THAN THE TRADE

Six of the fourteen names in Sunday’s ledger failed on the

same indicator. Every one of them had gapped or run hard in

early August and then gone sideways. That pattern compresses

MACD below its signal line, and the filter says no.

I wrote at the time that the filter was not broken, it was

early. OII is the first confirmation of that.

The temptation in a week like this is to look at a chart you

like, notice it misses one filter by a small margin, and find

a reason. Move the stop up a dollar. Call the RSI “basically

in range.” Decide the sector strength makes up for it.

Every one of those is a number invented to justify a trade you

already wanted. The filter stops being a filter the moment it

can be satisfied by an argument.

The alternative is boring and it works: write the rejection

down, note the exact number that failed, and check it again

in a few days. Some of them come back. Most do not. The ones

that come back arrive with better structure than they had the

first time, because the market spent those sessions building

it.

You do not have to catch a setup the week you first notice it.

You have to be there with the same rules when it is ready.

Full levels, sizing and the four execution scenarios went to

paid subscribers this morning at kisstrading.uk.

Trade Tight · Think in R · Focus on Process

— Radu / KISS Trading

⚠️ Educational only. Not financial advice. Always DYOR.

═══════════════════════════════════════════

REGIME CHECK — UNCHANGED

═══════════════════════════════════════════

BULLISH CAUTION. Held from Sunday.

None of the four invalidation conditions published in the

Regime Report have fired:

SPY below 20 SMA at 756.20 .......... no (769.06)

MMTW below 50 ....................... no (54.88)

US10Y decisively above 4.7…

Read more

═══════════════════════════════════════════

THE PICK

═══════════════════════════════════════════

ZD — Ziff Davis, Inc.

Internet Software/Services │ NASDAQ

Sector: Technology (XLK, RS 82)

Setup Quality: A

Why this one over the other four:

→ Highest RS Rating of the qualified five at 92.5, in the

only sector currently accelerating against SPY

→ Clean earnings w…

Read more

═══════════════════════════════════════════

THE FUNNEL

═══════════════════════════════════════════

Scanned this week: 19

Passed all six filters: 5

Rejection rate: 74%

Regime: BULLISH CAUTION — selective, full size on what

qualifies, nothing forced.

Something changed in this week’s scan, and it is not in the

five names that passed. It is in the four…

Read more

═══════════════════════════════════════════

WEEKLY REGIME VERDICT

═══════════════════════════════════════════

BULLISH CAUTION

Posture: Selective — full size on what qualifies, nothing forced

Held from last week. But for a different reason.

Last week the caution came from repair still in progress. This

week almost everything has repaired — index structure, breadth,

inflation data. One thing has not, and the protocol does not

grade on effort.

───────────────────────────────────────────

THE INDEX PICTURE

───────────────────────────────────────────

SPY — $776.34

Closed Friday −0.20% after a week of record highs. The full

Stage 2 stack is intact and correctly ordered:

price 776.34 > 8 EMA 770.99 > 20 SMA 756.20 > 50 SMA 748.93 >

200 SMA 705.46

This is textbook. No ambiguity, no interpretation required.

QQQ — $731.07

Price is above the 8 EMA (721.61) and above the 50 SMA (712.95).

But the 20 SMA sits at 704.13 — still below the 50 SMA.

That inversion is the leftover of the early-August drawdown to

660. It is closing fast: the 20 SMA is rising as the dip rolls

out of the window. But today it has not closed.

The protocol requires both SPX and NDX in strict Stage 2 —

price above 20 above 50 above 200 — before full deployment is

authorised. QQQ fails that test by roughly nine points.

IWN — $227.43

Small-cap value closed +0.29% with every average correctly

stacked beneath price. Participation at the low end of the

market cap range is confirmed.

VIX — 14.26

A new 2026 low, below every moving average on the panel.

Read this carefully. A VIX at 14 does not mean the market is

safe. It means almost nobody is paying for protection. That is

the condition in which an unexpected headline moves further

and faster than it otherwise would — and the Middle East file

is still open.

Key levels to watch:

→ SPY support: $770.99 (8 EMA), then $756.20 (20 SMA)

→ SPY resistance: none — at all-time highs

→ QQQ support: $721.61 (8 EMA), then $712.95 (50 SMA)

→ QQQ resistance: $740 (June high)

───────────────────────────────────────────

BREADTH CHECK

───────────────────────────────────────────

Reference levels, identical on every report:

above 70 extended · 40–70 normal · below 40 contracting ·

below 25 washed out

S&P 500 (large cap)

→ Above 200-day (S5TH): 72.76 — extended

→ Above 50-day (S5FI): 69.38 — top of normal range

Broad US market

→ Above 200-day (MMTH): 61.25 — normal

→ Above 50-day (MMFI): 62.59 — normal

→ Above 20-day (MMTW): 65.47 — normal

→ New highs / new lows (MAHN/MALN): 3.53

Concentration gap

→ 200-day horizon: +11.51 points

→ 50-day horizon: +6.79 points

Verdict: Healthy — and materially better than two weeks ago.

Two weeks ago the short-term broad measure was at 45, below the

50 line, while the S&P equivalent sat at 62. That gap was the

reason for the downgrade to NEUTRAL — DEFENSIVE at the start of

August.

That reading has now inverted. Broad short-term participation is

at 65.47. The intermediate concentration gap has compressed from

roughly ten points to under seven. Capital is no longer parked

exclusively at the top of the market.

The 200-day gap is still double digits, and the S&P long-term

measure is above 70. Neither is a sell signal. Both are reasons

not to treat this as a fresh entry point for the index itself.

New highs still outnumber new lows better than three to one.

Leadership is expanding, not contracting.

───────────────────────────────────────────

SECTOR ROTATION

───────────────────────────────────────────

Rotation is context for where to look first. It is never a

filter. A stock qualifies or fails on its own six-indicator

alignment regardless of what its sector is doing.

Weekly ranking — relative strength vs SPY, and whether that

strength is accelerating or decelerating:

ACCELERATING (below SPY, gaining)

1. XME Metals & Mining RS 0.910 slope +329 ADX_D HIGH

2. XLK Technology RS 0.968 slope +113 ADX_W HIGH

3. XLY Cons. Discretionary RS 0.952 slope +76

4. QQQ Nasdaq 100 RS 0.963 slope +63

5. XLC Comm. Services RS 0.951 slope +40

DECELERATING (above SPY, losing momentum)

6. XLF Financials RS 1.100 slope −82

7. XLV Health Care RS 1.093 slope −84

8. XLE Energy RS 1.077 slope −110

9. XLI Industrials RS 1.050 slope −88

10. XLP Cons. Staples RS 1.016 slope −116

11. XLRE Real Estate RS 1.009 slope −238

12. XLB Materials RS 1.002 slope −63

LAGGING AND FALLING

13. XLU Utilities RS 0.976 slope −336

Not one sector is both above SPY and accelerating. That is a

handoff in progress, not a stable leadership regime. The defensive

and value complex still holds the absolute lead but is bleeding

momentum in every case. Growth is underneath SPY on the weekly

window and climbing hard.

HUNT ORDER FOR THE WEEK:

→ First: XME and XLK — the only two names combining strong

acceleration with confirmed trend strength (ADX HIGH)

→ Second: XLY and QQQ constituents

→ Deprioritise: XLU, XLRE, XLP

Again — this is search order. Not permission.

───────────────────────────────────────────

MACRO — WHAT LAST WEEK DELIVERED

───────────────────────────────────────────

Three inflation and consumption prints, all supportive.

July CPI (Wed): +0.1% monthly, 3.4% annual, down from 3.5%.

Core +0.2% monthly, 2.5% annual. Both in line with consensus.

July PPI (Thu): flat on the month against a +0.2% expectation.

Core +0.2% against +0.3% expected. Annual headline 4.7%.

July retail sales (Fri): −0.6% against a +0.2% expectation. The

weak spot in an otherwise clean week, though lower gasoline and

soft car sales explain much of it.

Fed funds remain at 3.50%–3.75%. The July 28–29 meeting held on a

9–3 vote, with three officials dissenting in favour of higher

rates — Chair Warsh called it a “good family fight.” Market odds

of a September hike fell after CPI, with expectations pushed

toward October or December.

The 10-year sits at 4.692%, above its own 20-day average and in

an uptrend since April. Direction matters more than level here,

and the direction is against momentum equities.

Geopolitics remains the open variable. There is still no formal

US–Iran ceasefire, Strait of Hormuz shipping is below pre-conflict

levels, and oil remains headline-sensitive after peaking near $126

in the spring.

───────────────────────────────────────────

MACRO FLAGS — WEEK AHEAD

───────────────────────────────────────────

→ FOMC Minutes: Wednesday 2:00pm ET — the July meeting had the

first three-way same-direction dissent since 2016. These

minutes carry more weight than usual. Watch how close the

committee came to hiking.

→ Retail earnings wall: Home Depot Tuesday · Target, Lowe’s,

TJX Wednesday · Walmart, Ross Stores Thursday. Any Consumer

Discretionary or Staples name on your list has binary risk

on its report date.

→ Housing and production data: Tuesday brings housing starts,

industrial production and import prices. Thursday brings

claims, Philly Fed and leading indicators.

→ Monthly options expiry: Friday 21 August. Expect liquidity

distortion and unreliable volume readings into the close.

Calendar note: the FOMC minutes land Wednesday afternoon. An

order armed Tuesday evening fills Wednesday morning and meets

the event on day one of the trade. That is the arming evening

to skip. Monday and Wednesday evenings are clean.

───────────────────────────────────────────

VERDICT RATIONALE

───────────────────────────────────────────

Almost every input improved this week. Inflation cooled at both

the consumer and producer level. Breadth broadened where it had

been narrowing. SPY sits at all-time highs with a perfectly

ordered moving average stack. Small caps participated.

And the verdict does not move, because the protocol says both

indices must be in strict Stage 2 before full deployment, and

QQQ’s 20-day average is still below its 50-day.

That is the whole argument. Not a feeling about valuations, not

a view on the Fed. One measurable condition, unmet by nine

points.

This is what a mechanical framework buys you. It removes the

temptation to upgrade posture because the tape feels good, and

it gives you a specific, dated, observable trigger instead.

What upgrades this to BULLISH CLEAR:

→ QQQ 20 SMA closes back above the 50 SMA — likely within one

to two weeks at current rate, as the early-August dip rolls

out of the averaging window

What invalidates this verdict:

→ SPY closes below its 20 SMA at 756.20

→ Broad short-term breadth (MMTW) falls back under 50

→ US10Y breaks decisively above 4.75% with equity confirmation

→ A Middle East supply headline moves oil sharply higher — with

the VIX at 14, there is no cushion priced in

Until then: selective. Full size on setups that clear every

filter. Nothing forced to fill a slot.

═══════════════════════════════════════════

WATCHLIST + TRADE PLAN (PAID)

═══════════════════════════════════════════

Paid subscribers receive immediately below:

→ The Weekly Watchlist with annotated PCP setups

→ Entry levels, stop losses, and R-targets

→ The Trade Plan of the Week — fully sized, ready to execute

Everything is decided before Monday opens. You execute.

The system does the thinking.

Upgrade at kisstrading.uk to access the full system.

───────────────────────────────────────────

Trade Tight · Think in R · Focus on Process

— Radu

KISS Trading

───────────────────────────────────────────

⚠️ Educational only. Not financial advice. Always DYOR.

═══════════════════════════════════════════

THE PICK

═══════════════════════════════════════════

DELL — Dell Technologies

Sector: Electronic Technology (RS 99)

Setup Quality: A−

Why this one over the rest of the watchlist:

→ The MACD is not marginal. Line 11.58 over signal 8.59, with

the histogram at +2.99. Every other candidate screened this

week printed a …

Read more

Regime is BULLISH CAUTION — upgraded from NEUTRAL — DEFENSIVE.

Breadth expanded on every horizon this week and the setup pool

finally reflects it. Eight candidates screened. Two armed, one on

watch, five rejected.

All names below passed the KISS filter:

→ Stage 2 uptrend (above MA 200, MA 200 rising)

→ RS Rating ≥ 80

→ 4-Wave PCP or Pure BOS structure with Vol…

Read more

═══════════════════════════════════════════

WEEKLY REGIME VERDICT

═══════════════════════════════════════════

BULLISH CAUTION

Posture: Selective — full size on what qualifies, nothing forced

Upgraded from NEUTRAL — DEFENSIVE. Breadth expanded on every

horizon this week and it wasn’t marginal. What holds the verdict

back from BULLISH CLEAR is one index and one calendar.

───────────────────────────────────────────

THE REASONING

SPY / QQQ STATUS

SPY closed Friday at $773.26, up 0.61% on the day and at the top

of its range, with a textbook Stage 2 stack: price over the 8 EMA

at $761.50, over the 20 SMA at $750.17, over the 50 at $747.19,

over the 200 at $702.97, all rising. Nothing to argue with.

QQQ is the problem. It closed at $723.03, up 1.17%, and price is

above all four averages — but the 20 SMA at $700.34 still sits

BELOW the 50 SMA at $714.57. The July drawdown inverted the

stack and it has not repaired yet. Stage 2 requires 20 over 50

over 200. QQQ does not have it.

The rule is explicit: when SPY and QQQ disagree, the weaker

reading governs. SPY says clear. QQQ says not yet. That single

crossing is the whole difference between BULLISH CAUTION and

BULLISH CLEAR this week.

Worth noting alongside: IWN closed at $225.52 with a clean Stage

2 stack of its own. Small-cap value is participating, which is

not what a narrow tape looks like.

VIX at 14.89, below its 8 EMA, 50 and 200. Compressed.

Key levels to watch:

→ SPY support: $761.50 (8 EMA), then $750.17 (20 SMA)

→ SPY resistance: open air — Friday’s $773.92 high is the marker

→ QQQ support: $714.57 (50 SMA — the level it just reclaimed)

→ QQQ resistance: $740 (the July shelf)

───────────────────────────────────────────

BREADTH CHECK

LARGE CAP BROAD MARKET

Above 200-day 72.76 (S5TH) 61.31 (MMTH)

Above 50-day 65.60 (S5FI) 61.43 (MMFI)

Above 20-day — 64.12 (MMTW)

New highs / new lows — 2.67 (MAHN/MALN)

Concentration gap: +11.45 pts / +4.17 pts

5-day direction: EXPANDING — sharply

Reference levels — the same on every report:

→ Above 70: extended participation

→ 40–70: normal range

→ Below 40: contracting

→ Below 25: washed out

Verdict: STRONG — with one extended reading

Compare against last Sunday, when this section read MIXED:

31 Jul 7 Aug Change

MMTH 56.14 61.31 +5.2

MMFI 51.67 61.43 +9.8

MMTW 45.18 64.12 +18.9

MAHN/MALN 1.28 2.67 +1.4

S5TH 66.60 72.76 +6.2

S5FI 62.02 65.60 +3.6

Every measure up, and the short end moved most. Short-term

participation went from 45% to 64% in five sessions. That is the

layer breakouts actually need, and last week it was the layer

that was broken.

The concentration gap tells the more interesting story. On the

50-day horizon it collapsed from 10.35 points to 4.17 — the

broad market is catching up to large-cap fast. On the 200-day it

widened to 11.45. Translation: the recovery is real and broad on

the intermediate horizon, but the long-term trend is still owned

disproportionately by the big names.

The one caution flag: S5TH at 72.76 is above the 70 line.

Large-cap participation is extended. That is not a sell signal —

extended readings can persist for weeks — but it does mean the

easy part of this move is behind us, not ahead.

───────────────────────────────────────────

THE MACRO PICTURE

Three things happened this week and they do not point the same

direction.

THE LABOR MARKET CRACKED

July payrolls came in at −23,000 against an expected +83,000.

Private payrolls actually rose 30,000; the headline was dragged

down by a 53,000 loss in government, concentrated in local

government education. The unemployment rate fell to 4.1% from

4.2%, but for the wrong reason — labour force participation

dropped to 61.4%, a level not seen in over five years. People

leaving the workforce lowers the rate without anyone finding a

job.

The revisions were worse than the print. May was cut by 66,000

and June by 37,000 — 103,000 fewer jobs than previously

reported. Average hourly earnings rose 3.2% over twelve months,

the slowest since May 2021.

THE FED IS LEANING THE OTHER WAY

The FOMC held at 3.50%–3.75% on 29 July, but the vote was 9–3,

and all three dissents wanted a HIKE. Hammack, Kashkari and

Logan have grown vocal about inflation running above target for

more than five years. Chair Kevin Warsh described it as a “good

family fight.”

Markets now price one to two hikes by year-end, not cuts. Read

that against the paragraph above: a deteriorating labour market

and a central bank with a tightening bias is a stagflationary

setup, and it is the single most important macro fact on the

board right now.

Last CPI print (June, released 14 July): headline 3.5% y/y, core

2.6% y/y, with the monthly index falling 0.4% on lower gasoline.

Inflation is easing, but from a high base and not fast enough

for three voting members.

US10Y at 4.649%, sitting just above its 20-day average and in a

rising trend since March. Elevated. A headwind, not a tailwind.

OIL IS THE SWING FACTOR

The Iran conflict is in its sixth month and the Strait of

Hormuz — roughly a fifth of global oil flow — has been largely

closed since March. Brent peaked above $126 in April.

Iran and Oman now have a draft agreement to reopen it: inbound

traffic on the Iranian side, outbound on the Omani side, 60 days

with no transit fees, mine clearing in the median lane within 30

days. Brent fell below $80 on 4 August on that news, then jumped

3.8% to $82.49 on Thursday when Iranian state media published a

draft with restrictive conditions attached.

This is the variable that matters most for the Fed. A functional

reopening is a direct disinflationary impulse and it takes the

September hike off the table. A collapse in the talks puts it

back on, hard. Neither outcome is priced with confidence, which

is why the tape keeps whipsawing on headlines.

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MACRO FLAGS — WEEK AHEAD

→ Monday 10 Aug: No US releases

→ Tuesday 11 Aug: Existing Home Sales (10:00 ET)

→ Wednesday 12 Aug: CPI — July (8:30 ET) — THE EVENT

→ Thursday 13 Aug: PPI — July (8:30 ET)

→ Friday 14 Aug: Retail Sales — July (8:30 ET)

U. Michigan Sentiment, Aug prelim (10:00 ET)

Wednesday is the week. With three FOMC members already voting to

hike and the labour market softening, a hot July core print puts

September firmly in play. A soft one likely ends the hike

conversation for this cycle.

Operationally: Wednesday is a no-new-order session. Anything not

triggered by Tuesday’s close gets cancelled rather than carried

into the print. That leaves Monday, Tuesday, Thursday and Friday

as execution days.

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SECTOR RANKING

Context only — never an access gate. A name qualifies on its own

relative strength and structure, not on its sector’s slope. This

ranking tells you where to look first when you’re short on time.

Ranked on daily RS acceleration vs SPY:

1 XME Metals & Mining +27.89 RS 0.90

2 XLB Materials +8.26 RS 0.98

3 XLV Health Care +5.98 RS 1.09

4 XLF Financials +4.51 RS 1.09

5 XLI Industrials +3.04 RS 1.02

—— SPY benchmark 0.00 RS 1.00

6 XLE Energy −1.43 RS 0.96

7 XLY Cons. Discretionary −1.77 RS 0.97

8 XLK Technology −3.31 RS 1.02

9 XLP Cons. Staples −4.19 RS 0.97

10 XLRE Real Estate −9.34 RS 0.98

11 QQQ Nasdaq 100 −13.92 RS 0.97

12 XLC Comm. Services −17.16 RS 0.91

13 XLU Utilities −36.49 RS 0.94

Only three sectors are both above SPY AND accelerating: Health

Care, Financials, Industrials. Those are the only genuine

leadership readings on the board.

XME has by far the strongest acceleration but sits at 0.90 —

still 10% behind SPY. That is early rotation, not established

leadership. Any name from there has to clear RS 80 on its own to

count, and few will.

XLK is the interesting one. Relative strength 1.02, still ahead

of SPY, but decelerating at −3.31. Technology is stalling, not

breaking. Note that this reverses last week’s reading, which is

exactly why sector rotation is context in this system and never

a filter — a four-day-old slope is not a reason to skip a

qualified chart.

HUNT ORDER FOR THE WEEK

Start with Health Care, Financials and Industrials. Second pass

on Metals & Mining for names that clear RS 80 individually.

Everything else stays in the universe — it just isn’t where I’d

spend the first hour.

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VERDICT RATIONALE

BULLISH CAUTION, and the caution is doing real work.

Breadth is the best it has been in months and it improved on

every horizon at once. SPY is in clean Stage 2. Small-cap value

is participating. Volatility is compressed. Those are the

conditions the system is built for, and after two weeks of

producing almost nothing, that matters.

But three things keep this from being a clear signal. QQQ’s

moving-average stack is still inverted and the framework does

not let SPY vote alone. Large-cap breadth is extended above 70,

meaning we are joining this move late rather than early. And the

macro is genuinely two-sided — a softening labour market against

a Fed with three votes for a hike, with Wednesday’s CPI standing

between us and clarity.

The practical posture: take what qualifies, at full size, and

let the dynamic ceiling do the filtering it is designed to do.

Last week the scanner returned 37 elite-RS names and 32 failed

on the volatility ceiling alone. When a market runs, the ceiling

tightens automatically — that is the system refusing to chase,

not the system malfunctioning.

Do not lower a stop to make a setup pass. Do not skip

Wednesday’s blackout. Do not force a trade because breadth

finally improved.

What invalidates this verdict:

→ MMTW closing back below 50, or the concentration gap on the

50-day widening back past 8 points

→ A hot July core CPI on Wednesday that revives the September

hike, with US10Y breaking decisively above 4.75%

What upgrades it to BULLISH CLEAR:

→ QQQ’s 20 SMA crossing back above its 50 SMA, with price

holding above both

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WATCHLIST + TRADE PLAN (PAID)

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Paid subscribers receive immediately below:

→ The Weekly Watchlist with annotated PCP setups

→ Entry levels, stop losses, and R-targets

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Everything is decided before Monday opens. You execute. The

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Upgrade at kisstrading.uk to access the full system.

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Trade Tight · Think in R · Focus on Process

— Radu / KISS Trading

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⚠️ Educational only. Not financial advice. Always DYOR.

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THE PICK

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PFG — Principal Financial Group

Sector: Financials (RS 99)

Setup Quality: B+

Why this one over the rest of the watchlist:

→ The only name of twelve with a bullish MACD — line 1.12 over

signal 1.05, histogram positive at 0.067. In a week where momentum

was broken …

Read more

Regime is NEUTRAL — DEFENSIVE. This watchlist is shorter than usual

because the tape produced no clean A-grade base. Twelve candidates were

screened across Financials, Energy and Health Care — the sectors with

the flow. Ten were rejected: six on the dynamic ceiling, three on a

bearish MACD, one on relative strength below threshold.

All names below passed the…

Read more