7/31/25 Recap

The SPY with another big gap up that has now faded, we’re in a very narrow breadth environment and the AI trade is ripping really hard, fortunately for the overall market META,MSFT, and NVDA are all such a massive weighting of the SPY so it remains bid but we had a vicious intraday move down. Yesterday we broke the 8 ema for the 2nd time 2 weeks but instantly recovered and closed above it. I don’t know what to say here other than yes we’re still in a bull market over the 8 ema but we are also the most extended from the 21 week that we’ve been in years. Is this a new paradigm where multiples expand or does reality eventually bring stocks lower? I can’t tell you but you’ve seen my positioning, I took most of my leverage off and I’m content playing it slow from here after a torrid move the last 3 months. Today we also have Apple and Amazon earnings to contend with again these 2 alone combine for 10% of the weight in the market so their reactions will have a big impact on things.

Another point to worry about here is the dollar, look at this monthly candle below, it is putting in a bullish engulfing and trying to bottom. A strong dollar is usually a negative for equities, emphasis on the word usually because I don’t even know what is going on anywhere, we just go up everyday and nothing seems to matter.

On a longer term view below, the dollar is at the bottom of this massive channel it has been in forever, do with this what you will, but with a bullish engulfing at the bottom of the channel, it doesn’t seem likely the dollar will fall much more soon which has been the biggest tailwind for equities for a while now.

My Open Book

Trades I Made Today