Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Tech and Consumer Discretionary Lead Market Rebound

Equity markets rebounded this past week, led by strong performance among technology and consumer discretionary stocks. NASDAQ surged 3.9% for the week and eclipsed a record high, regaining ground lost in a sell-off the previous week and is now up more than 11% YTD.

The S&P 500 added 2.4% and is ahead 8.6% for the year so far, finishing at 6,389.5—less than a point below its record set less than two weeks earlier. An index of U.S. large-cap growth stocks outperformed its value style counterpart by a wide margin for the second week in a row and extended its year-to-date performance edge. A growth benchmark added 3.2% for the week versus 1.4% for a value index.

Volatility Signals and Earnings Strength

Day-to-day volatility has been picking up, VIX has been seeing signs of life, and the VIX term structure is steep, referring to the CBOE Volatility Index (VIX). October VIX futures reached nearly 21 versus under 17 on Friday for spot VIX, implying participants expect more volatility in the coming months. That often correlates with pressure on Wall Street.

The odds of a 3% to 7% pullback in stocks appears higher than average at this juncture. With 90% of S&P 500 companies reporting quarterly results, the corporate earnings season is winding down. Earnings results have been stronger than expected, as 82% of S&P 500 companies have beaten analyst estimates, with an average upside surprise of 8.5%. As a result, forecasts for earnings growth have been revised sharply higher to 9.7%, from 3.8% at the end of the quarter, showing that prior downgrades appear to have been overdone.

Oil, Gold, and Fed Policy Outlook

The price of U.S. crude oil fell more than 5% for the week to the lowest level in more than two months. Oil was trading below $64 per barrel on Friday afternoon, down from $70 as recently as July 30 and about $75 in mid-June.

The price of gold futures briefly climbed to a record high on Friday, reaching as high as $3,500 per ounce in afternoon trading before slipping below that threshold. At the start of 2025, gold was trading around $2,630. Chances of a Fed rate cut next month are around 90%, according to the CME FedWatch Tool. That certainly should add to volatility.

Key Technical Levels

Back to equities, Technically, the 20-day moving average for the S&P 500 index has held on tests this week and may remain a support point. It currently sits at 6,318. The all-time high close of 6,389 appears to be a resistance point, as the index touched it on Friday and then sold off.

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Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

S&P 500 Retreats After Strong Run

After a strong run in financial markets, with the S&P 500 up more than 20% since its April 8 lows, we may be on the verge of experiencing increased volatility as markets digest higher tariffs and a softer jobs market.

A gauge that measures investors’ expectations of short-term U.S. stock market volatility surged nearly 22% for the day following Friday’s weaker-than-expected jobs report. The Cboe Volatility Index climbed to its highest level in a month and a half and surged nearly 37% for the week.

The strong sell-off on Friday capped a rough week that sent major U.S. stock indexes to weekly declines of around 2% to 3%. The S&P 500 and NASDAQ retreated from record highs in a week packed with news about tariffs, jobs, GDP, earnings, and U.S. Federal Reserve policy.

Despite Weekly Declines, July Closes Strong

However, for the month of July, U.S. stock indexes climbed for the third month in a row as the S&P 500 added 2.2% and racked up 10 record closing highs. Information technology was the top-performing sector for the third consecutive month; over that stretch, tech stocks gained nearly 28% on a cumulative basis.

Key Technical Levels and Sector Strategy

Going forward, KEY technical price support exists near SPX 6200, then 6130, at the 50-day moving average. Below that, we see additional support near 6059-60 and then 5943-45. First KEY technical resistance looks to be near 6990–6300.

Keep in mind that we are also in the midst of the second-quarter earnings season, and thus far over 80% of companies have beaten earnings expectations – which means corporate earnings growth remains on track to be positive this year.

We are also likely to see the Federal Reserve cut interest rates this year, and the new tax bill to kick in starting in 2026 should be supportive of market sentiment.

Markets are now pricing in about an 80% chance that the Fed cuts rates in September, well above the 38% probability after the Fed meeting, according to CME FedWatch.

In this backdrop, traders may want to continue to favor U.S. large-cap and mid-cap equities. From a sector perspective, having exposure to growth and value sectors, including consumer discretionary, financials and health care, may be where to concentrate positions.

However, we also recommend tightening stops and/or increasing hedge positions, such as BEAR ETFs and/or entering short positions to protect portfolios.

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Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Calm Markets Power Higher While Traders Watch for Fed and Earnings Volatility

Summer temperatures are heating up, and so is the stock market. Investors have little to complain about so far this season, with the S&P 500 climbing steadily and not registering a single move greater than 1% in either direction for over a month. This stretch of low volatility and consistent gains includes 11 new highs in the past 30 days.

The S&P 500 and the NASDAQ pushed their record levels higher for the fourth week out of the past five as those two indexes and the Dow on Friday closed more than 1% higher for the week. Since June 20, the S&P 500 has risen more than 7%, while the NASDAQ has added almost 9%.

Earnings on Deck: Could Microsoft, Meta, Apple, and Amazon Break the Calm?

A packed week of earnings, Fed policy, and economic data could shake that calm, but the prevailing trend is upward. With rate-cut pressure intensifying, markets are watching closely for hints of easing, potentially starting in September.

This coming week will be the busiest of this earnings season, with almost 40% of the S&P 500 companies reporting results, including many among the Magnificent 7 (Microsoft, Meta, Apple, Amazon).

Rising Complacency, Falling Volatility — and a Warning for Speculators

The summer’s calm may be tested and although complacency is rising, so is the risk of near-term volatility. A market gauge that tracks investors’ expectations of short-term U.S. stock volatility fell 9% for the week, extending a recent decline that’s pushed the index to the lowest level in five months. The Cboe Volatility Index on Friday closed at 14.9, down from a recent high of 21.6 on June 17.

Meme-stock mania appears to be making a comeback with some retail traders reigniting interest in heavily shorted stocks, driving big price swings that are often disconnected from fundamentals and can reverse violently. This behavior could be a sign of froth, but a broader measure of investor sentiment based on the AAII survey (American Association of Individual Investors) indicates that we appear to be still far from the euphoria that tends to show up at market peaks.

What Comes Next: Volatility, Seasonality, and Sound Strategy

However, Fed decisions could stir volatility. Seasonality also cautions against overconfidence, as late summer and early fall tend to bring more market turbulence. A run-of-the-mill pullback or correction is inevitable, though difficult to time. Traders will be best served by avoiding the temptation to chase extremely speculative investments.

In any case, as is usual at thetechtrader.com, we will always “Trade What We See, Not What We Think.”

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Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Markets Continue to Climb Walls of Worry

It was a volatile, news-driven week, but the S&P 500 nevertheless managed to push higher, with the index moving up by around 1%. The S&P 500 and technology-heavy Nasdaq made fresh all-time highs. Both indices are now up about 7% to 8% this year so far. The S&P 500 index is now up over 26% since the April 8 lows.

Market technicals, including advance/declines and up/down volume ratios, are still mostly confirming the trend, but we are now starting to see some non-confirmations among the indices and other divergences elsewhere. Those will have to be watched closely for clues as to a possible impending market top.

Sector Standouts and Broader Sentiment

Among the sector groups, non-energy minerals, consumer durables, and electronic technology were the strongest-performing sectors during the week, while health services, energy minerals, and health technology lagged.

Overall, despite the uncertainty that began earlier this year, markets have been able to climb several walls of worry, supported by solid economic fundamentals. We may see caution and bouts of volatility as investors digest a new set of tariff updates in August and head toward the seasonally choppy September timeframe.

Overall, stock markets appear to have overcome the peak fear and uncertainty that emerged in early April around the threat of sharply rising tariffs. Since then, we have seen tariff increases get delayed and inflation and economic data remain resilient.

Crypto, Commodities & Looking Ahead

Crypto had another strong week, with bitcoin briefly touching $123,000. Altcoins joined the rally as well. Ethereum surged over 20% on the week, trading just shy of $3,500. On Friday, the stablecoin-focused GENIUS Act was signed into law.

Oil prices pulled back during the first half of the week, driven in part by uncertainty regarding potential new tariffs. Rising U.S. fuel inventory builds also contributed to the downward pressure on price. However, prices bounced Thursday on renewed tensions in the Middle East.

Gold prices experienced another relatively quiet week, mostly trading within its prior week’s range. Prices fell following the release of positive economic data.

As we look ahead, we would not expect markets to continue to move in a straight line higher, especially as we head toward the seasonally choppy months of August and September. Markets will also have to digest additional tariff headlines as the August 1 deadline approaches.

In any case, as usual, we at thetechtrader.com will always be “Trading What We See, Not What We Think”!

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Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Stocks Consolidating Near Record Highs

Stocks held near record highs set last week, aided by strong performance in the energy and industrial sectors that helped offset the risk-off sentiment driven by tariff headlines.

The S&P 500 and the NASDAQ finished with fractional weekly declines as they slipped from record levels set the previous week. The modest setback followed a two-week run of positive results that sent the S&P 500 more than 5% higher. The tech-heavy Nasdaq Composite Index held up best.

For the first half of 2025 both the NDX & SPX gained about 6.5%. The trailing Russell 2000 finally edged into the plus side finishing +.21%.

Mega-Cap Concentration & Market Leadership Shifts

NVIDIA hit the $4 trillion market capitalization threshold for the first time, helping put the “mega” in the so-called Magnificent Seven group of mega-cap stocks.

The market remains somewhat top-heavy, but the Magnificent Seven are now behind the lead pack. There’s lots of concern about hefty concentration associated with the Magnificent Seven within the S&P 500, and given their size, they’re large contributors to index gains. But they’re not the best performers. In fact, no Magnificent Seven stock is in the top 10 year-to-date performers, and only three of the seven are outperforming the S&P 500.

Surging Commodities and Sentiment Risks

The price of the most widely traded cryptocurrency, Bitcoin, climbed above $118,000 for the first time on Friday, posting a weekly gain of around 9%. Less than three weeks earlier, Bitcoin briefly slipped below $100,000.

The price of copper surged 13% to a record high on Tuesday after the Trump administration announced a 50% tariff on copper imports to the United States. Silver futures also rallied, posting a weekly gain of around 6% as the metal climbed to the highest price since mid-2011.

A market warning sign is that lower quality, speculative pockets of the market have led the advance off the early April lows, which has helped push aggregate measures of investor sentiment back into extreme optimism territory. This is often seen at or near market tops and although it could continue for a while longer, it should certainly be a cause for caution for traders.

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Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Markets Hit New Highs with Growth Leading the Charge

Stock markets made new all-time highs last week. Overall, the three indexes were up around 2.0% in a holiday-shortened trading week, with both the S&P 500 and technology-heavy Nasdaq up about 5% year-to-date. Since the April lows, the S&P 500 and Nasdaq have rebounded 24% and 33%, respectively.

An index that tracks U.S. small-cap stocks outperformed a large-cap benchmark and returned to positive territory on a year-to-date basis. For the week, the Russell 2000 Index climbed 3.6%, nearly 28% above a recent low recorded on April 8.

U.S. stock indexes finished this year’s second quarter with big gains despite April’s tariff-driven market decline. The S&P 500 climbed 10.6% overall after posting monthly gains of 6.2% in May and 5.0% in June. On a year-to-date basis, the index was up 5.5% as the quarter closed on Monday.

The relatively stronger rally in the mega-cap technology sector is the main driving technical force at this time. The renewed momentum in the technology and growth parts of the stock market is clear. In fact, while the broader S&P 500 is up about 24% since the April 8 lows, growth sectors like technology, communication services, and consumer discretionary are up well beyond this in some cases.

Bullish Technical Signals but Overbought Risks Loom

Technically, the S&P 500 index (SPX) saw a positive development on the charts this week as its 50-day moving average climbed above the 200-day moving average for the first time since early April. That’s known as a golden cross, and it’s a technical signal that many traders consider bullish. The index is up 25% from the April low, but less than 6% year to date. When the 50-day crosses above the 200-day, it’s usually seen as a positive technical signal.

While momentum is likely on the trader’s side in the near term, in the weeks ahead, the markets will have to digest tariff and trade updates and potentially softer economic data. Markets may experience more bouts of volatility as a result.

Since the oscillators and several other closely followed technical indicators are nearing the overbought levels we’ve seen near market tops in the past few years, it’s quite logical to expect pullbacks or retests of key underlying support levels in the weeks ahead.

Oil Pulls Back, Rate Cuts Priced In

U.S. WTI crude oil, which had risen over 20% in June to $75 per barrel, fell about 13% last week, down to around $65 per barrel. This fall in oil and energy has appeared to support market sentiment in recent days as well, helping drive equity markets to new highs.

Markets are now pricing in two or three rate cuts in 2025, according to CME FedWatch. And Treasury yields across the curve have moved lower, with both 2-year and 10-year yields well below highs from earlier this year. These moves lower in interest rates are positive for consumers and corporations and supportive of better stock market sentiment broadly.

In any case, we at thetechtrader.com will always “Trade What We See, Not What We Think.”

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