Power Hour #83: Breadth Cracks, Energy Leads: The Final Hour Playbook

Regime Check — Where Are We Now?

Regime is still bullish but narrowing — the 4% sentiment reads Bullish while breadth thins under the surface into the final hour.

Breadth contracting: % Above 20 SMA collapsed to 93% from 164% yesterday (-71pp), and % Above 40 SMA slipped to 58.51% from 60.48% (-2.0pp) — participation is thinning even as indices hold.
Leadership rotating defensive-to-cyclical crosscurrent: Health Care ATR leads at 3.24 (100th pct, rising), Energy jumped to 2.07 (100th pct), while Utilities sag at -1.23 and Financials collapsed to 0.72 (0th pct) — a sharp rotation out of financials.
Character: This looks like a rotational, mixed session — leaders extending (Health Care, Energy, Materials 1.78) while Tech (RSPT -0.87) and Staples (0.27, falling) lag.

Strongest continuation (2LYNCH): AUTL at $2.36, +14.0% on 2.3 RVOL leads the 113-signal continuation list, though risk is extreme at 218.7% — size tiny. Cleaner: CRCG $10.08 +10.5% (1.0 RVOL) and CCUP $1.76 +11.0% (1.6 RVOL).
Strongest reversal setup: TME at $8.76 tops the 106-signal reversal list, down -11.6% on a heavy 3.4 RVOL — a washout candidate but knife-catching; watch for a base to form before acting. FA at $21.13 (-10.4%, 3.3 RVOL) is a similar high-volume flush.
SIP leaders holding/failing: MPC $320.32 is the standout, +5.73% from open on a price-target raise (RVOL 1.91, near 52w highs) — energy strength confirmed. Failing: APP $339 (-2.39% on BofA downgrade) and ACH $1.40 (gap -38.57%, Citi downgrade) — avoid.
Most relevant action code — PLASTICS (Sector Winners): Energy and Health Care ATR both sit at 100th percentile; MPC’s move plus the Energy ATR spike (+1.26% today after +4.94% on 8/10) is textbook sector-leader follow-through. Pair with ABC (Always Be in Control) given the breadth thinning.

Close/trim before the bell: Exit or tighten anything in Financials (RSPF 0th pct, ATR crushed from 3.12 to 0.72) and Utilities (RSPU -1.23, falling) — momentum has drained. Cut APP-type downgrade names into any bounce; don’t hold GETY ($0.45, guidance withdrawn) or ACH.
Enter on confirmation into the close: MPC above the open is the cleanest continuation — energy leadership plus PT raise. For continuation risk-seekers, CRCG $10.08 and CRCA $14.91 (both +10%+) only if they hold gains into the final print; keep FFM discipline (≤2.5% risk).
Key index level: SPY/QQQ/IWM technical levels are data unavailable today — I won’t guess prices. Trade off breadth instead: with % Above 20 SMA still 93%, dips are buyable, but the -71pp one-day drop is a caution flag — reduce new size if breadth keeps sliding into the close.

Catalyst watch: Energy remains the tape’s tell — MPC and YPF (mixed Q2, +1.86% from open) put refiners/integrateds in focus; watch crude follow-through overnight to confirm the RSPG surge.
Setup forming: MPC $320.32 — a hold above today’s range sets up continuation toward its 52-week high (currently -2.02% away). Health Care names in the RSPH complex (COR $331.67, +2.0%, INST) are also building.
Regime outlook: Sentiment stays Bullish, but the breadth contraction means tomorrow is a “prove-it” session — if % Above 20 SMA stabilizes, stay long leaders (Energy, Health Care, Materials); if it keeps falling, shift to defense and let TME/FA-style reversals base before buying.