Soft CPI Opens a Re-Leverage Window; APP Breaks Weekly 317
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Soft CPI, volume edges higher
On August 12 (U.S. Eastern), the Dow was the only major index lower. The other three finished higher, and volume picked up versus recent sessions. Eight of eleven SPX sectors advanced; consumer discretionary, materials, and communication services lagged.
July CPI came in broadly in line: headline +0.1% m/m and +3.4% y/y (from 3.5%); core +0.2% m/m and +2.5% y/y (from 2.6%). Shelter rose 0.1% m/m and accounted for roughly two-thirds of the monthly gain. Energy fell 1.5% m/m. Auto insurance softened and was a key drag on core. Food rose 0.1% m/m, with food away from home +0.3%. Medical care, airfares, communication, education, and recreation ran firmer.
The print was soft enough for markets. Money markets lifted the odds of a September Fed hold to about 60%, while still pricing another 25 bp hike before year-end. Risk assets got relief, but this is not an unconditional cut path.
Deleveraging is done; the next phase is re-arming
Institutional leverage data through July 29 show hedge-fund and institutional deleveraging largely complete. Leverage in semiconductors, other tech, and the rest of the book has rolled from the June–July highs toward the March lows.
That reduction in forced selling is what lets SPX hold new highs and the Nasdaq press toward them. Q2 earnings were solid overall, and forward EPS still has room to revise higher, so large capital has a plausible window to rebuild leverage. The risk is concentration: if new leverage piles back into a few semiconductor leaders, the market can again print index highs while most names lag. Watch daily volume and key levels to see where the money actually goes.
Hot cloud and optics names: big upside, expensive defense
CRWV jumped about 19%. The build-out phase still implies expected EPS losses into 2026/2027. Take-or-pay style contracts help, but CapEx remains heavy and profitability is not near. The stock is mainly pricing AI growth. Technically, $110 is the first strong resistance after the break of $97.5, with denser supply above. A real path to new highs needs a clear of $143 — still more than 30% away. Treat it as a high-volatility, level-driven trade.
NBIS was even sharper: open $226, close $259, about +34%. Expected EPS is also still negative into 2026/2027. It cleared $231 into a right-side breakout; overhead between $259–$267 looks thinner. Trend invalidation sits near $208 — buying near the highs with a stop there implies roughly 20% risk. Fast upside often means fast drawdowns; size it as a high-beta swing.
LITE rose more than 13% to about $932. On a 30–40x high-growth multiple, fair value around June 2027 is roughly $544–$726 (mid ~$635) and around June 2028 roughly $868–$1158 (mid ~$1013). Spot is already near the 2028 midpoint — about a year and a half of earnings pulled forward. Cyclical peak earnings are already being marked down, so valuation is only a ruler. After clearing $932, technical resistance above is thin; swing support is $829. A break back below that would reopen a topping risk.
COHR just reported and trades near $355. At 40x, June 2027 fair value is about $251–$335 (mid ~$293), so the stock looks a bit rich. In the range, support is $328–$366 and resistance $372–$400. Clearing $400 would reopen a path toward the prior high near $440, where supply is still heavy.
MSFT keeps repairing; APP’s weekly break matters more
MSFT fell more than 2% on mildly higher volume. Daily RSI overbought and top divergence are still unwinding. Another 1%–2% down that finishes the overbought reset and a fast/slow line cross would leave a cleaner repair-then-rally path.
APP is the name that matters today. A downgrade questioned roughly 30% growth in 2027 and the stock stayed soft. On a 20–30x multiple the valuation itself is not extreme (2026 fair ~$315–$473; 2027 ~$417–$626).
The key is the weekly chart: $317 (near $310) had been the launchpad since November 2024. A close at $303 confirms the break. Buyers above that zone over the past two years are largely underwater, and the head-and-shoulders is clear. Breaking $317 is a de-risk signal; the next rescue band is $252–$297. Lose that and the tape can point below $180 — another 30%+ from here. Positions bought between $317–$350 should cut risk once the break is confirmed and keep the loss near 10%, rather than ride toward $252.
Semis vs software: one day does not make a seesaw
SOXX rose more than 2% but opened near $553, stalled in the $550–$580 band, faded into the close, and sold off into the end of day. Breadth in the components stayed constructive (25 up / 5 down).
IGV remains stuck in $101–$107, closing near $103, down about 0.8%, with software names broadly softer.
One session is not enough to call “long semis / short software.” Both groups are still pinned under their own resistance. Watch volume and breakouts: software stays weak while semis truly clear resistance, and the seesaw case strengthens; if both break higher in sequence, capital is simply adding on both sides. Who clears first matters more than the slogan.