Event Gaps: Muse Spark 1.1's picks for 2026-09-08
Muse Spark 1.1 picked LULU, AVGO, PATH, GWRE, ZS for a 1-day horizon. Intraday alpha vs SPY: -2.12%. Picks with positive alpha: 40%.
| Experiment | Event Gaps |
|---|---|
| Model | Muse Spark 1.1 |
| Prompt version | event-gap-v1 |
| Asked | |
| Horizon | 1-day |
| Measured from | 2026-09-04 |
| Measured to | 2026-09-08 |
| Benchmark | SPY |
| Status | Settled |
| Intraday alpha vs SPY | -2.12% |
| Picks with positive alpha | 40% |
| Benchmark return | -0.40% |
The picks
| Rank | Symbol | Gap direction | Price change | Return in the called direction | Confidence | vs benchmark | Called right |
|---|---|---|---|---|---|---|---|
| 1 | LULU | down | +2.59% | +2.59% | 80% | +3.00% | Yes |
| 2 | AVGO | down | +1.34% | +1.34% | 74% | +1.75% | Yes |
| 3 | PATH | down | -7.59% | -7.59% | 71% | -7.18% | No |
| 4 | GWRE | up | -6.73% | -6.73% | 69% | -6.33% | No |
| 5 | ZS | down | -2.22% | -2.22% | 67% | -1.81% | No |
The model's market view
Source session Sep 4 ended with hot jobs report lifting yields and pressuring growth. Key after-hours catalysts from Sep 2-4 dominate gap risk for Sep 8 open: LULU massive guidance cut -17.38% crash, PATH EPS miss -40% vs consensus, AVGO beat but light Q4 guide, GWRE beat +5.3% surprise, ZS beat but FY27 growth deceleration to 16.6%. Gap diagnostics: LULU, PATH, AVGO, ZS likely gap-down continuation, GWRE gap-up. Portfolio is LONG all five for open-to-close: gap-downs are buy-the-dip mean-reversion shorts covering, gap-up is momentum continuation. Expected to outperform SPY intraday as oversold tech stabilizes.
Why each pick
LULU
Q2 FY26 rev $2.4B -4% YoY vs $2.45B guide, comp -9%, EPS $2.92 -6% despite buybacks, tariff refund $134.5M. Cut FY26 rev to $10.35-10.50B from $11.0-11.15B and EPS to $9.48-9.73 from $10.95-11.15, Q3 rev guide $2.29-2.32B vs $2.53B Street. Stock crashed -17.38% to $100.61 Sep 4. Expect additional gap-down 5% at Sep 8 open on analyst downgrades, but open-to-close LONG as washed-out valuation (PE 8.2) and incoming CEO Sep 8 triggers short-cover reversal. Emotional continuation risk high then fades.
AVGO
Q3 FY26 results Sep 2 9:15pm ET: revenue $29.591B +86% YoY beat, non-GAAP EPS $3.32 vs $2.45 consensus +35.5%, AI semi $16.7B +221% YoY, but Q4 rev guide $34.8B vs $35.0B Street light and op margin flat 66% disappointed. Options implied 8.16% move. Fell -2.7% Sep 4. Expect 4% gap-down Sep 8 open on valuation premium unwind after hot jobs yield spike, but open-to-close LONG as $21.7B Q4 AI guide +236% YoY supports dip buying vs SPY.
PATH
PATH reported Sep 3 after close Q2 EPS $0.09 vs $0.15 consensus miss -40%, net margin 19.58%, ROE 7.92%, previous close $18.22 to $15.19 close Sep 4 -16.6% on 56M volume. Automation growth concerns. Expect 6% gap-down at Sep 8 open on FY26 estimate cuts, but LONG open-to-close as extreme oversold 5-day -16.31% invites mean-reversion bounce vs SPY.
GWRE
GWRE Q4 FY26 beat Sep 3 after close: EPS $0.99 vs $0.94 consensus +5.32%, rev $411.09M vs $402.6M (+2.2%) vs $356.57M year ago, 3 beats in last 4 quarters, insurance software cloud transition. Expect 4% gap-up at Sep 8 open on earnings momentum, LONG open-to-close as underperforming YTD -4.1% vs S&P +12% catches up, continuation risk upside.
ZS
ZS Q4 FY26 Sep 3: non-GAAP EPS $1.19 beat $1.09 by $0.10, rev $898.2M beat $877.1M, Security for AI bookings +50% seq, but FY27 guide $3.908-3.938B growth 16.6-17.5% deceleration vs 19% Q1, free cash flow margin 23-23.5% and 3% workforce cut. Stock -4.5% after print. Expect 3.5% gap-down Sep 8 open on growth slowdown, but LONG open-to-close as AI tailwind and highest sales productivity in 4 years supports reversal vs SPY.
Other models on the same run
| Model | Picks | Intraday alpha vs SPY | Picks with positive alpha |
|---|---|---|---|
| GPT-5.6 Sol | BE, HUBS, P, ILMN, BLDR | -0.77% | 40% |
| Grok 4.5 | UNFI, ABM, CAN, DLNG, CASY | +1.70% | 40% |
| Gemini 2.5 Pro | BE, TTD, BLDR, TAP, ILMN | -1.62% | 20% |
| DeepSeek R1 | UNFI, CASY, GME, ABM, BRZE | +0.53% | 20% |
Written up on ForecastNest Insights: Event Gaps: Muse Spark 1.1's picks for 2026-09-08.
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