The Bull Case

If oil stays contained, the geopolitics stay background noise and the market gets to focus on what actually moves multiples: the economy and Q2 earnings, which start next week. The Street is looking for 23.3% year-over-year growth for the S&P 500 — though it’s worth noting the median company only needs to clear roughly 9%, a far more forgiving bar than the headline number implies. The tape is behaving like it expects to be rewarded: the S&P 500 is on track for a three-week closing high, and the Equal Weight index bounced firmly off its 20-day SMA, which says the strength isn’t just a handful of megacaps. Financials, healthcare, and industrials are printing new weekly highs. July seasonality has historically been supportive, and a good earnings season would give the fundamental story something to stand on. Notably, the most constructive argument this week wasn’t about AI at all — it was that the second half offers catch-up trades and overlooked areas precisely because so many expect returns to moderate.

The Bear Case

The longer the conflict runs, the higher the odds oil eventually grinds higher — and higher oil complicates inflation at the exact moment the market wants the Fed sidelined. Both sides say indirect talks continue, but after this week’s exchange, the odds of near-term normalization in the Strait look poor. Then there’s positioning. Hedge fund gross and net exposure sits near the 97th percentile, retail margin debt, fund leverage, and leveraged ETF assets are all building at once, and quarter-end pension rebalancing points to mechanical selling. None of that is a sell signal on its own, but it’s the kind of structure that turns ordinary pullbacks into sharp ones. And semis still have to prove themselves. The SOX bounced off its 50-day SMA, but it was choppy, not a clean “V” off support. Notably, funds sold tech at a record pace this week while parts of the Street were buying chips into the reset — a real disagreement, not a technicality.

The Two Arguments Worth Watching

First, semis: is this a healthy reset that clears out crowded positioning before an upcycle that isn’t peaking — or the early innings of an unwind with more to run? Both cases are being made with conviction, and the split is roughly evenly matched. If chips fail to hold next week, the benign outcome is rotation into laggards; the less benign one is a dent in confidence in the group that’s been carrying the tape. Second, the Fed: nearly everyone expects an extended hold, with core inflation sticky enough that cheaper oil alone doesn’t open the door to cuts. But a minority view — that the soft June jobs print was a statistical distortion and a hike is still live — is no longer a fringe position, and it’s the tail nobody is positioned for.

Next Week Gives No Cover

CPI Tuesday morning, then Fed Chair Kevin Warsh’s first semiannual testimony before Congress at 10:00 a.m. ET. PPI Wednesday, retail sales Thursday. Big banks Tuesday and Wednesday, ASML Wednesday, Taiwan Semiconductor Thursday. An inflation print, a new Fed voice, the start of earnings, the semi complex on trial, and an unresolved Strait — all inside five sessions.

I’ve been studying charts for 32 years now, as you can see week in and week out when I give you levels that’s where price tends to settle for a fight between the bulls and bears.

SPX closed the week above its 20 and 50-day moving average. Next supports 7,237 last low, FIB levels — horizontal lines. Then the 100 & 200 DMA. The resistance can be the dotted trendlines and the all-time high. I am noticing we made a short term lower high, but a higher low — which can now serve as resistance.

NASDAQ closed above the 20- and 50-day MA. Supports can be found around 25,000 followed by the FIB levels — horizontal lines. Then the 100 & 200 DMA. Resistance can be found at trendlines, last high and all-time high. I will note the QQQ found support above the 50 DMA so keep an eye on both.

DOW made a new all-time high this week, and is holding support above the 20 DMA. Resistance around 53,400 and again at the 53,500 trendline.

RUT broke its all-time high two weeks ago. Resistance trendline dating back from 2000 on May 5 around 2,850. The IWM ETF penetrated its resistance trendline and came back to close at that level, the 296 area. I am following the small cap story to get an understanding regarding risk on or off.

VIX came back to break below last week’s low around $15.80.

CL — no support level has held up, but CL is approaching a very interesting level at $62.16, which is a 68% FIB number and there is a trendline support at that level as well. The RSI came off oversold levels.

Gold found some support but closed below its 20-day MA (gold hasn’t closed above the 20 DMA since May). I also see a death cross took place this week. 3,516.1 is a 38% FIB retracement and 3,350 is a trendline going back 3 years.

What the FED will do is the question on the table. Look for my next levels using the purple lines and moving averages. (Note: I am watching yields closely due to all the debt the Hyperscalers are issuing as of late.)

Last week I showed you a chart dating back to 2009. Sometimes you have to look at the bigger picture to see the bigger picture — and now the trendlines can help you assess real risk better.

The daily chart hit the level I gave almost exactly, $101.797. (Note the inverse correlation between the $ and gold; as the $ was going up gold was going down — this week the opposite happened.)

The chart you’re viewing is a 3 year weekly chart. The last support dates back to 8/5/2024 @ $50,534. We broke the February low. I do see that BTC has been playing the FIB levels nicely. Past indications of level don’t automatically mean they will hold again. I will be keeping an eye out at the $29,682 level.

A few weeks ago I wrote: “we need to remember software was hit hard this year; if this market turns down then IGV is susceptible to further downside.” That seems to have happened — IGV corrected from 108 to 85. Next support and resistance are FIB numbers and moving averages.

My levels weren’t working for Silver — it’s mostly support and resistance lines per prior days and weeks. The prior all-time high for silver was in 2011 around $50.68. The 61% FIB retracement is around $47.31. If those areas don’t hold, next major support is around $27.

SOX closed above its 50 DMA. Next support levels are FIB numbers. Note: be cautious — this sector is volatile.

This week I am showing ORCL. Around February time I posted a video that ORCL is approaching a major trendline around the $136 and a 68% FIB level. The stock shot up to the $247 area, and came all the way back. We broke the upward trendline (light blue dotted line) — let’s see if the FIB level will hold at $132.14. Next support after that level is around the $98 and then $74.

NVDA found support at its 200 DMA. The last few times, the stock rallied into earnings and then sold off.

Futures on stocks will be trading on July 27. Here is the list of the stock futures to be trading on the CME:

Monday (July 13): No scheduled earnings.

Tuesday (July 14): Before the Open: JPM, GS, BAC, C, WFC, FAST  ·  After the Close: AEHR

Wednesday (July 15): Before the Open: ASML, JNJ, BLK, MS, PGR, CTAS, BNY, ELV, PNC, CAG  ·  After the Close: UAL

Thursday (July 16): IPO: CSQR, STDN  ·  Before the Open: UNH, TSM, GE, ABT, PLD, USB  ·  After the Close: NFLX, ISRG, AA, VIST

Friday (July 17): Before the Open: TRV, TFC