7/8/26 Recap
The SPY broke back under the 21 ema today as oil rose 8% and the vix rose 12% on commentary from Trump that the war with Iran is infact nowhere near over. This whole thing has been a disaster for months, you could tell Trump opted to try and end this and focus on getting energy costs down into midterms, but the ball isn’t really in his court to make that call and Iran is forcing his hand now. Did we see this in the charts yesterday with the first break below the 50 day? I would say yes the charts have been telling you that something is very wrong with lower highs forming and key levels being lost. Most thought it was the semi carnage but it was probably a return to war which hit the high beta names just like it did in March. Now we need the SPY to hold this 740 level where the 50 day is or a bigger flush down to the 100 day below 710 is in the cards. The problem with getting too bearish due to war is Trump folds repeatedly and I don’t think any of you would be shocked if he has some ceasefire with Iran again in the coming days. He doesn’t really have time, he was begging gas station owners to lower prices at the pump recently, midterms are in 4 months and he can’t really play this game right now pushing stocks lower and oil higher into midterms would hurt his parties odds tremendously.
The QQQ, below, looks worse obviously because it lacks the energy and defensive names of the S&P. Today was the first official open under the 50 day and now you have a huge air pocket to the 100 day at 660. This is why I said yesterday you don’t have to buy right now, let this settle down, let the 50 day be reclaimed and you can focus on being part of the next uptrend. You don’t have to be part of tech stocks every single day and right now you’re basically hoping for a Trump pivot or earnings season 2 weeks out materially changing things because other than that, tech stocks are in no man’s land and can drift way lower. Semis look bidless right now and there is just a massive unwind to be had there with how overallocated the majority of people are.
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