diff --git a/.changeset/watch-p0-p1-fixes.md b/.changeset/watch-p0-p1-fixes.md
new file mode 100644
index 000000000..fce11b953
--- /dev/null
+++ b/.changeset/watch-p0-p1-fixes.md
@@ -0,0 +1,10 @@
+---
+'@bradygaster/squad-cli': patch
+---
+
+fix(watch): wire missing CLI flags to config, validate --state-backend, fix auth stderr parsing (#834)
+
+- Wire --notify-level, --overnight-start, --overnight-end, --sentinel-file to WatchConfig and loadWatchConfig merge
+- Add --state-backend flag with upfront validation against allowed values (worktree, git-notes, orphan, external)
+- Fix probeCurrentGhUser() to use `gh api user -q .login` (stdout) instead of parsing `gh auth status` stderr
+- Also wire authUser through loadWatchConfig merge logic (was accepted but silently dropped)
\ No newline at end of file
diff --git a/packages/squad-cli/src/cli-entry.ts b/packages/squad-cli/src/cli-entry.ts
index 421baca46..39705a984 100644
--- a/packages/squad-cli/src/cli-entry.ts
+++ b/packages/squad-cli/src/cli-entry.ts
@@ -427,6 +427,45 @@ async function main(): Promise<void> {
       ? args[authUserIdx + 1]
       : undefined;
 
+    // --notify-level runtime validation
+    const notifyLevelIdx = args.indexOf('--notify-level');
+    const rawNotifyLevel = (notifyLevelIdx !== -1 && args[notifyLevelIdx + 1])
+      ? args[notifyLevelIdx + 1]
+      : undefined;
+    const validNotifyLevels = ['all', 'important', 'none'] as const;
+    const notifyLevel = rawNotifyLevel && (validNotifyLevels as readonly string[]).includes(rawNotifyLevel)
+      ? rawNotifyLevel as typeof validNotifyLevels[number]
+      : rawNotifyLevel
+        ? (console.error(`\u26a0\ufe0f Invalid --notify-level "${rawNotifyLevel}". Valid: all, important, none.`), undefined)
+        : undefined;
+
+    const overnightStartIdx = args.indexOf('--overnight-start');
+    const overnightStart = (overnightStartIdx !== -1 && args[overnightStartIdx + 1])
+      ? args[overnightStartIdx + 1]
+      : undefined;
+
+    const overnightEndIdx = args.indexOf('--overnight-end');
+    const overnightEnd = (overnightEndIdx !== -1 && args[overnightEndIdx + 1])
+      ? args[overnightEndIdx + 1]
+      : undefined;
+
+    const sentinelFileIdx = args.indexOf('--sentinel-file');
+    const sentinelFile = (sentinelFileIdx !== -1 && args[sentinelFileIdx + 1])
+      ? args[sentinelFileIdx + 1]
+      : undefined;
+
+    // --state-backend runtime validation: reject invalid values upfront
+    const stateBackendIdx = args.indexOf('--state-backend');
+    const rawStateBackend = (stateBackendIdx !== -1 && args[stateBackendIdx + 1])
+      ? args[stateBackendIdx + 1]
+      : undefined;
+    const validBackends = ['worktree', 'git-notes', 'orphan', 'external'] as const;
+    if (rawStateBackend && !(validBackends as readonly string[]).includes(rawStateBackend)) {
+      console.error(`\u26a0\ufe0f Invalid --state-backend "${rawStateBackend}". Valid: ${validBackends.join(', ')}.`);
+      process.exit(1);
+    }
+    const stateBackend = rawStateBackend as typeof validBackends[number] | undefined;
+
     // Build capability overrides from CLI flags and --no-{cap} flags
     const capabilities: Record<string, boolean | Record<string, unknown>> = {};
     const registry = createDefaultRegistry();
@@ -456,6 +495,11 @@ async function main(): Promise<void> {
       dispatchMode,
       logFile,
       authUser,
+      notifyLevel,
+      overnightStart,
+      overnightEnd,
+      sentinelFile,
+      stateBackend,
       capabilities: Object.keys(capabilities).length > 0 ? capabilities : undefined,
     });
 
@@ -463,6 +507,7 @@ async function main(): Promise<void> {
     // Skip values that follow known value-flags (e.g. "--interval 5" → "5" is not positional).
     const knownValueFlags = new Set([
       '--interval', '--copilot-flags', '--agent-cmd', '--max-concurrent', '--timeout', '--board-project', '--auth-user',
+      '--dispatch-mode', '--log-file', '--notify-level', '--overnight-start', '--overnight-end', '--sentinel-file', '--state-backend',
     ]);
     const watchArgStart = args.indexOf(cmd) + 1;
     const watchArgs = args.slice(watchArgStart);
diff --git a/packages/squad-cli/src/cli/commands/watch/config.ts b/packages/squad-cli/src/cli/commands/watch/config.ts
index 629cbabb7..20caff3bf 100644
--- a/packages/squad-cli/src/cli/commands/watch/config.ts
+++ b/packages/squad-cli/src/cli/commands/watch/config.ts
@@ -31,6 +31,16 @@ export interface WatchConfig {
   verbose?: boolean;
   /** Preferred auth user for platform operations (e.g. gh auth switch --user). */
   authUser?: string;
+  /** Notification level for watch events. */
+  notifyLevel?: 'all' | 'important' | 'none';
+  /** Hour to begin overnight mode (e.g. "22:00"). */
+  overnightStart?: string;
+  /** Hour to end overnight mode (e.g. "08:00"). */
+  overnightEnd?: string;
+  /** Path to a sentinel file — watch shuts down gracefully when removed. */
+  sentinelFile?: string;
+  /** State persistence backend. */
+  stateBackend?: 'worktree' | 'git-notes' | 'orphan' | 'external';
 }
 
 const DEFAULTS: WatchConfig = {
@@ -83,6 +93,12 @@ export function loadWatchConfig(
       ...(cliOverrides.capabilities ?? {}),
     },
     verbose: cliOverrides.verbose ?? fileConfig.verbose ?? false,
+    authUser: cliOverrides.authUser ?? fileConfig.authUser,
+    notifyLevel: cliOverrides.notifyLevel ?? fileConfig.notifyLevel,
+    overnightStart: cliOverrides.overnightStart ?? fileConfig.overnightStart,
+    overnightEnd: cliOverrides.overnightEnd ?? fileConfig.overnightEnd,
+    sentinelFile: cliOverrides.sentinelFile ?? fileConfig.sentinelFile,
+    stateBackend: cliOverrides.stateBackend ?? fileConfig.stateBackend,
   };
 
   return merged;
@@ -106,10 +122,27 @@ function normalizeFileConfig(raw: Record<string, unknown>): Partial<WatchConfig>
     }
   }
   if (typeof raw['logFile'] === 'string') result.logFile = raw['logFile'];
+  if (typeof raw['authUser'] === 'string') result.authUser = raw['authUser'];
+  if (typeof raw['notifyLevel'] === 'string') {
+    const level = raw['notifyLevel'];
+    if (level === 'all' || level === 'important' || level === 'none') {
+      result.notifyLevel = level;
+    }
+  }
+  if (typeof raw['overnightStart'] === 'string') result.overnightStart = raw['overnightStart'];
+  if (typeof raw['overnightEnd'] === 'string') result.overnightEnd = raw['overnightEnd'];
+  if (typeof raw['sentinelFile'] === 'string') result.sentinelFile = raw['sentinelFile'];
+  if (typeof raw['stateBackend'] === 'string') {
+    const backend = raw['stateBackend'];
+    const validBackends = ['worktree', 'git-notes', 'orphan', 'external'] as const;
+    if ((validBackends as readonly string[]).includes(backend)) {
+      result.stateBackend = backend as typeof validBackends[number];
+    }
+  }
 
   // Everything else is a capability key
   const caps: Record<string, boolean | Record<string, unknown>> = {};
-  const reserved = new Set(['interval', 'execute', 'maxConcurrent', 'timeout', 'copilotFlags', 'agentCmd', 'verbose', 'dispatchMode', 'logFile']);
+  const reserved = new Set(['interval', 'execute', 'maxConcurrent', 'timeout', 'copilotFlags', 'agentCmd', 'verbose', 'dispatchMode', 'logFile', 'authUser', 'notifyLevel', 'overnightStart', 'overnightEnd', 'sentinelFile', 'stateBackend']);
   for (const [key, value] of Object.entries(raw)) {
     if (reserved.has(key)) continue;
     if (typeof value === 'boolean' || (typeof value === 'object' && value !== null && !Array.isArray(value))) {
diff --git a/packages/squad-cli/src/cli/commands/watch/health.ts b/packages/squad-cli/src/cli/commands/watch/health.ts
index bd48ca4b0..8dbaab025 100644
--- a/packages/squad-cli/src/cli/commands/watch/health.ts
+++ b/packages/squad-cli/src/cli/commands/watch/health.ts
@@ -10,7 +10,7 @@ import fs from 'node:fs';
 import path from 'node:path';
 import os from 'node:os';
 import crypto from 'node:crypto';
-import { execFileSync } from 'node:child_process';
+import { spawnSync } from 'node:child_process';
 
 /** Shape of the PID file written by runWatch at startup. */
 export interface WatchPidInfo {
@@ -77,19 +77,19 @@ function formatUptime(ms: number): string {
  * Duplicated from index.ts to avoid circular imports — the canonical
  * version lives in `getActiveGhUser()` in the watch index.
  */
-/** Probes gh auth status — captures both stdout and stderr since gh may write to either. */
+/** Probes current gh user — uses `gh api user` which writes to stdout reliably. */
 function probeCurrentGhUser(): string | undefined {
   try {
-    const result = execFileSync('gh', ['auth', 'status', '--active'], {
+    const result = spawnSync('gh', ['api', 'user', '-q', '.login'], {
       encoding: 'utf-8',
       stdio: ['pipe', 'pipe', 'pipe'],
+      timeout: 5000,
     });
-    const match = result.match(/account\s+(\S+)/);
-    return match?.[1];
-  } catch (e) {
-    const stderr = (e as { stderr?: string }).stderr ?? '';
-    const match = stderr.match(/account\s+(\S+)/);
-    return match?.[1];
+    const login = (result.stdout ?? '').trim();
+    if (login && result.status === 0) return login;
+    return undefined;
+  } catch {
+    return undefined;
   }
 }