Table of Contents
Market Overview
Research Unpacked: HUM, VRT, GEHC, F, BSX, META, MSFT, AAPL, AMZN, RBLX, RDDT and DXCM
Earnings to Watch This Week: PLTR, CAT, SHOP, SPOT, AMD, ANET, SPCX, UBER, APP, SNDK, WDC, CEG and DDOG
1. Market Overview
No hike for you!
Kevin left rates unchanged, but don’t get too comfortable. Looks like the hiking shoes can stay in the closet for another meeting. The swimwear too. FedWatch now puts the odds of a September hike around 60%, rising above 80% by December.
We’re entering the earnings season summit, where opportunities tend to appear just as quickly as they disappear. Nearly 60% of the S&P 500 has already reported, with almost 90% beating EPS expectations and roughly three quarters topping revenue estimates. Yet stocks keep reminding everyone that they don’t trade on FactSet consensus. They trade on positioning. Good report, bad report, beat, miss... try explaining that to the largest holders who expected even more.
Thursday felt like the beginning of a proper momentum recovery. Microsoft added a record $450 billion in market value. Amazon surged another 15%. Financial media immediately started talking about the return of the AI trade. 24 hours later... semiconductors still closed out their worst July since 2006. One spectacular day doesn’t magically repair months of technical damage. Recovering part of the losses isn’t the same as recovering the trend.
Remember when I laughed at the “semis bear market” narrative? I may have to reconsider.
Fundamentals seem unchanged. Then again, who said stocks trade on fundamentals these days? Semis continue making lower highs, while every sharp bounce gets sold almost immediately. If momentum doesn’t recover soon, “sell the rip” may become the next big thing. I’m still not ready to call it a bear market, but the probability has clearly increased.
VIX signal still works, though the way it works has changed completely.
Instead of the “buyable pullback,” we now tend to see a vicious rip once the sequence completes, often straight into the first target. As always, it’s a probability based signal, not an automatic buy button. And those frontrunners will learn their lesson sooner or later.
If this week proved anything, it’s that we’re trading a market.
Financial media has spent the last few days acting as if Leopold invented blowing up a leveraged hedge fund. Please. Every cycle has its own genius. Every cycle has its own liquidation. Turns out you don’t have to be a Bankman to get fried. Belgian fries were the original anyway.
Timing, positioning and risk management still pay the bills. Active management is becoming increasingly important. Sometimes the best trade is simply no trade.
2. Research Unpacked
Below is this week’s Price Action Playbook: Research dump
Let’s look at the logic behind some of those areas:
HUM 356(349)
Humana paired strong membership expansion with stable insurance performance in Q2, as its benefit ratio landed in line with expectations and CenterWell Senior Primary Care added nearly 131,000 patients year to date. Management maintained its full-year earnings and benefit-ratio outlook while continuing to expect approximately 25% growth in individual Medicare Advantage membership, supported by stronger new sales and improved retention following changes to benefits and customer service. The continued expansion of CenterWell and Medicaid also broadens Humana’s growth beyond its core Medicare Advantage business.
356 is an area where the old weekly pivot high from 2018 converges with a highly reactive weekly BSL and TRL, while 349 is one of the major POCs clearly visible on the volume profile. Here is the big picture:
349 was slightly frontrun on the initial post earnings dip, though trading was thin and the opening auction was weird, to say the least. 356, however, has been defended by happy buyers multiple times.
Let’s see whether they keep defending it or finally decide to step away.
VRT 250(225)
