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Market Insights

Watching And Waiting šŸ§

Frank Villavicencio

• 15 min read
Watching And Waiting šŸ§
August 12, 2026 at 6:01 PM EDT
šŸ”„ Trim Positions Moderately
VIX at 14.55, RSI at 75, and a 90th-Percentile Valuation Walk Into a Bar ā€” The Market Picks Up the Tab
Day 7 at a cautious posture

Justification

Market sentiment is mixed with conflicting signals across sectors. While some growth areas like SpaceX show strong recovery momentum and AI infrastructure remains resilient, concerns about AI market valuation and selective earnings disappointments create uncertainty. Technology stocks face particular pressure despite beating expectations, suggesting elevated market expectations and potential sector rotation.

Since the Last Issue

  • RSI (momentum gauge) moved from the prior issue's elevated read to 64.6 on the derived SPX measure, while the decision-engine's 14-period RSI sits at 75.21 ā€” breadth remains stretched but the two reads together signal the rally is tiring at the margin.
  • NVDA surged +3.03% and SMH (semiconductors ETF) gained +2.08%, while META fell -3.38% and MSFT dropped -2.26% ā€” megacap dispersion widened sharply, with AI-hardware names splitting from software platforms.
  • Fear & Greed Index held at 62 (Greed), unchanged from one week and one month ago ā€” sentiment has flatlined, offering no new directional catalyst.
  • Sector leadership rotated: Technology led at +1.49% while Materials lagged at -1.24% and Consumer Discretionary fell -1.13%, suggesting narrowing breadth beneath the index gain.