8/5 Cautiously Bullish. 400 Buying | 100 Selling.
% Stocks Over 50SMA is Bearish. Primary Indicator is Bullish – Caution. 20% Weekly is Neutral.
The market showed solid rebound momentum with broad sector participation led by Communication Services and Technology, supported by mega-cap strength in NVDA, GOOG, META, and MSFT. Small- and mid-caps outperformed, while Energy lagged amid lower oil prices following OPEC+ supply increases. Volatility declined, with VXX retreating, signaling reduced market fear and encouraging risk-taking.
Healthcare and Utilities sectors also posted notable gains, while Financials showed mixed but improving signs. Earnings season heats up with key reports from Berkshire Hathaway, BioCryst, and Wayfair, the latter delivering a strong turnaround and guiding higher revenue. Economic data was mixed, with factory orders showing some weakness but underlying shipments improving.
Upcoming catalysts include Tuesday’s June Trade Balance, July ISM Services, and a $58B 3-year Treasury auction, alongside a heavy earnings calendar. Watch for trade developments ahead of the August 7 deadline that could influence near-term market direction.
Key Takeaway:
Traders should focus on confirmed momentum names within Technology and Communication Services sectors, leveraging strong support levels and relative volume spikes. Avoid Energy and other weak sectors until clearer reversal signals emerge. Use tight stops below key support given mixed breadth and cautious sentiment despite bullish price action. Monitor earnings and macro data closely to validate continuation or signal pullbacks.
Watchlist
Continuation: AEHR (S1: 18.5, S2: 18.5, S3: 18.5, R1: 19, R2: 19.5, R3: 19.5)
Anticipation: CDNS (S1: 360, S2: 361, S3: 362, R1: 364, R2: 365, R3: 367)