QQQ is still in a neutral-to-bearish transition, while SPY remains in the bullish camp above 755 and back at all-time highs; the video leans on that split to frame the market as rotational rather than broadly weak. July was not bullish for the market, but earnings have kept the tape supported: by July 31st, 61% of companies had reported, 86% beat estimates versus a 5-year average of 78%, 77% beat revenue estimates, revenues grew 14.1% y/y, and 10 of 11 sectors showed earnings growth with healthcare lagging. The two big winners highlighted are AMZN and MSFT, both described as ripping against a wider AI-growth downturn, with AMZN at $288 and MSFT being built into a larger end-of-2026 position. The warning is that the market looks overheated and overcrowded per a Bank of America sentiment indicator, so bad news could force a pullback even though SPY is still being treated as healthy.
QQQ has been in descent for a long time, fell below the weekly 9 EMA, backtested it, and now sits neutral but leaning bearish.
QQQ needs a couple weekly candles back above the 9 EMA to return to a bullish regime; if it falls back under 686, the setup points to a deeper drop toward 629.
SPY’s prior diamond pattern between 745 and 735 produced one big red flush candle, but the two-candle breakdown rule failed when the next day went green and SPY re-entered the pattern.
SPY’s Monday thrust back above 755 put it back at all-time highs; above 755 it is framed as the wrong place to short and the spot where a new ATH is expected.
If SPY loses 755, the next downside target is 745; lose 745 and the target is 735; break 735 and the move is expected to extend toward 690.
July was not a bullish month for the market, yet earnings have been absorbing the pressure: through July 31st, 61% of companies had reported, 86% beat estimates versus a 5-year average of 78%, and 77% beat revenue estimates.
Revenue growth is running at 14.1% y/y, and 10 of 11 sectors are showing earnings growth with healthcare the only laggard.
The market is described as overheated and overextended, with a Bank of America indicator reading near 10 signaling overcrowded positioning and fewer buyers left to push stocks higher.
That overcrowding does not guarantee an immediate crash, but it raises pullback risk if an unexpected negative event hits; VIX is still described as showing traders are not afraid to go long.
AMZN hit brand new all-time highs at $288, up from $231 at the start of the year, while a fib level marks $288 as resistance but not the completed measured move.
AMZN’s measured-move target is cited as 2305, with the largest concentration of sellers camped there; the call is that the up move does not end until it reaches 305, where the plan shifts to hedging and selling calls.
AMZN is framed as a possible straight run to 305 or a consolidation between the $288 fib level and a historic sending-line resistance before continuing higher.
MSFT is being built into a larger position versus AMZN into end-2026, with 528 identified as the measured-move completion level where sellers are camped and 571 the next fib level above it.
The expectation on MSFT is a flag in the current resistance zone and an eventual build toward 528; the goal at that level is to hedge shares, not sell them outright.
Rotation is the market’s current mechanism: MSFT and AMZN are ripping while many other Mag 7 names are still making lows, and SPY strength can coexist with QQQ lag as money keeps getting put to work.