Bounce Fails and Support Breaks, Eventful Week Ahead
Weekly Outlook 07/27/26
Market Recap
Last week we framed Friday’s bounce as a short term washout, and it held into the early part of this week. Then Thursday and Friday arrived and the market started to roll again. $QQQ continued to break down this week, with price closing below the major support level for the last two months, below the initial washout low created in June.
$SPY and $IWM both lost the 50sma this week, but still remain the higher low washout level from June. Tech is the weakest link and it is the one printing new lows.
VIX the volatility index stayed elevated in the 17 to 20 range all week rather than spiking and fading. A sustained VIX will be a sign to watch for whether more pain is to come.
Memory staged its bounce and then rolled with everything else. $DRAM, $EWY, $MU and $SNDK all traced the same shape: a 5-day bounce off the lows, before giving it up into Friday.
Semis remain in a downtrend, with the group still selling on any positive news. $INTC reported Thursday night with revenue of $16.13 billion against roughly $14.4 billion expected and EPS of $0.42 against $0.21, its fastest growth in almost fifteen years. Shares jumped as much as 12% after hours and then closed Friday down 7.89%. $MXL was worse. It beat on both lines and guided Q3 to $210 to $220 million against consensus near $174 million, then fell 18.6% on Friday.
Wednesday brought the megacaps and both broke down on the daily. $GOOGL posted record operating income on 24% revenue growth, and none of it mattered next to the cash flow statement. Capex doubled to $44.9 billion against $39.1 billion of operating cash flow, producing free cash flow of negative $5.9 billion, the first negative quarter in the company’s history since the 2004 IPO. Management raised the full year capex guide to $195 to $205 billion and then declined to put any number on 2027. The stock closed under the 200ma.
$TSLA finally cracked after a year of going nowhere. Revenue and deliveries were both records, but operating income fell 57%, free cash flow turned negative by $1.1 billion, and Musk spent the call managing expectations on Optimus rather than selling it, calling the robot one of the hardest problems to solve and warning the early ramp would be flat and long. The Musk premium is fading more broadly, with $SPCX sliding right alongside it and giving back everything since the Pentagon deal we flagged last week.
Watchlist
Next week will heavily be impacted by earnings. $MSFT, $META and $ARM report Wednesday after the close, with $AAPL and $AMZN following Thursday. Four of the heaviest weights in $QQQ land inside 48 hours, and after what happened to $GOOGL for spending, those reactions can move the market.
In addition, many other tech and AI adjacent companies also report, including $QCOM, $VRT, $RDDT, $BE and a others. This week will further set the tone for sentiment in the AI sector.
The FOMC decision lands Wednesday, the first meeting under new chair Kevin Warsh, further stacking event risk is into this 48 hour window, which is worth knowing before sizing anything.
Correlation inside $QQQ stays high, which means individual setups matter less than they normally would. If the downtrend continues, memory remains the vehicle. Highest beta to the market and the cleanest expression of the move. $SNDK, $DRAM, $MU as the core basket.
There are green shoots in relative strength worth tracking. These names either held up best through the selling or bounced hardest off the recent lows. However, it remains a time to track relative strength rather than initiate new longs. For a sustained uptrend to be created, there needs to be a clear change in character in the wider market.
$DELL clear relative strength and holding the earnings gap from end of May.
$AMD relative strength in terms of relative drawdown from it’s all time highs, despite a choppy trading range.
$NVDA Basing sideways around $200
$ANET A choppy consolidation range but hasn’t really broken down.
$CIFR Datacenter stock that bounced sharply last week.
$HUT Another datacenter stock holding up well.
$USO and crude are on watch as weekend headlines pointed toward possible negotiations.
Closing Thoughts
It will be an event driven week with the megacap tech stocks reporting earnings as well as FOMC. Along with elevated volatility and the indices breaking fresh lows, the path of least resistance stays to the short side.
It remains an environment to be nimble. Until something changes the short term trend has been down for the last few weeks. When the market turns, it will be an obvious change in character and a clear shift in market tone, with stocks actually going up on positive news, as well as a proliferation in individual breakouts. Until then, remain patient.
If you enjoyed this read, please consider leaving a like on the post, and let me know in the comments if I missed anything or what you’re watching for this week!
P.S.
If you haven’t checked out the Valhalla Portal yet, it’s where I track catalysts, setups, and market activity in real time - a live feed of everything that moves the tape, built for the community. I’ll be doing a dedicated post soon walking through all the features in detail, so stay tuned for that. In the meantime, you can check it out here:
As a successful trader such as yourself we know it’s been choppy market since June so have you remained on the sidelines with swing trades until the market cleanly breaks one way or the other for cleaner trades?