When: Stabilized $545-$547 pullback with rebuilt MACD histogram

Then: Re-entry opportunity

When: Volume-confirmed close above $640

Then: Re-entry opportunity

SELL (50% trim toward underweight with tight stops at 625, staged exits, no rotation into RTX/GD, preserve cash optionality)

• Supports SELL direction and 50% trim toward underweight as directionally correct
• Opposes 665 stop—too generous at 7.3% above entry; proposes tight tactical stop at 625 (Bollinger upper band) where rally would first stall against overhead supply
• Opposes rotation into RTX and GD—labels it momentum chasing with extra steps after these names captured the missile production narrative
• Supports staged selling discipline: scale out 15% to 20% per push into 620 to 625, reassess momentum; accelerate trim if MACD histogram compresses and 50 stays below 200
• Warns neutral analyst's RSI reading ignores bearish divergence—RSI declining from 71.65 (July 24) to 63.7 while price makes new recovery highs
• Challenges neutral framing of 50/200 SMA cross as 'transition zone'—trend-following systems mechanically flipped bearish
• Opposes initiating new positions near current levels with stops below 576 (5% room)—labels it 'hope with a price tag'
• Argues 30-year Treasury at 19-year high, zero Fed cuts 2026 (85% Polymarket probability), and rising oil create regime hostile to long-duration assets like LMT
• Acknowledges forward earnings growth of 20% but warns multiple compression from higher discount rates offsets earnings expansion
• Acknowledges dividend growth for 20+ years, FCF covers 1.8x, investment grade balance sheet—but calls defensive yield on deteriorating momentum a yield trap, not a hedge
• Full position: entry 620, tactical stop 625, if breaks 625 on strong volume with 50 below 200, underweight thesis validated and sizing revisited
• If decisive close above 625 on volume with RSI confirming, hold residual and revisit

→ vs aggressive: Stop at 665 gives back the entire V-shaped recovery before cutting—7.3% above entry is too wide; risk-reward math assumes independent technical and fundamental outcomes but they are highly correlated, making actual expected value worse than surface calculation

→ vs aggressive: Rotation from LMT into RTX and GD is momentum chasing with extra steps—buying two names at the top of their recent run after they already captured the missile production narrative; if sector rolls over, new positions carry same risk profile plus premium prices paid

→ vs aggressive: If relative trade unwinds, getting hit twice: once on LMT trim being too early, once on RTX/GD entry being too late; correlated risk with additional transaction friction

→ vs neutral: RSI at 63.7 called 'healthy' below 70 ignores trajectory—textbook reading a level without reading the trend; RSI declining from 71.65 to 63.7 while price makes new recovery highs is bearish divergence in slow motion, analogous to February-April 25% drawdown setup

→ vs neutral: 50 SMA slipping below 200 is a long-term moving average cross in the wrong direction—mechanically, trend-following systems flipped bearish and mean-reversion signals weakened regardless of semantic framing

→ vs neutral: Initiating new positions near current levels with stops below 576 (5% room) is aggressive with extra steps—adding to a name that failed at major resistance with deteriorating long-term moving average cross in a rising yield environment is not risk management

PARTIAL TRIM (35-40% OF BENCHMARK WEIGHT), STOP AT 635-640

• Support directional underweight but reduce trim from 50% to 35-40% of benchmark weight to preserve upside optionality
• Stop loss at 635-640 (approximately 1.5x ATR of $15.50), or trailing stop at 10 EMA of $596
• Staged selling: 25-30% on first push into 615-620 zone, another 25-30% on test of 625, remainder only on momentum breakdown below 600
• Avoid chasing rotation into RTX and GD; redeploy into diversification (energy, utilities, consumer staples) or defensive sleeve
• Re-entry triggers: decisive close above 625 on volume with RSI confirming, OR 5-7% pullback with MACD histogram rebuilding above 1.0 and RSI below 50
• Q2 2026 operating inflection (record $20.06B revenue, $7.94 EPS, $2.92B FCF) supports maintaining residual exposure
• Rate headwind (30Y at 19-year highs) is real but probably priced in at current levels
• 50/200 spread of $1.56 is noise, not a decisive bearish break
• LMT defensive characteristics (0.11 beta, 2.32% dividend yield, multi-decade backlog) anchor near-term cash flow

→ vs aggressive: Rotation plan is selling LMT down 17% to buy RTX/GD that have already captured the relative move—buying high and selling low with extra steps

→ vs aggressive: Over-selling the 50/200 cross—the $1.56 spread is noise, not a death cross; trend systems don't flip on such a tight range

→ vs aggressive: Underselling Q2 2026 operating inflection—record $20.06B revenue, $7.94 EPS, $2.92B FCF are real improvements, not decorative line items

→ vs conservative: 625 stop is too tight—below 1x ATR ($15.50) means intraday noise will trigger exit before thesis plays out; 1.5x ATR suggests stop at ~$643

→ vs conservative: Absolute cash bias has opportunity cost—30Y at 19-year highs and elevated real yields mean cash is not neutral; sitting in cash while waiting is its own risk

→ vs conservative: Over-dismissive of operating turnaround—calling Q2 2026 margin recovery 'premature' while treating technical deterioration as definitive is asymmetric weighting