Fewer trades. Better timing.
Hi Traders,
This week brought a shift in short-term momentum, with SPX slipping under key support and triggering a “Cash” signal on the daily chart. Let’s break it down.
Macro & Economic Highlights
Jobs miss: July payrolls +73k (vs ~110k expected), unemployment up to 4.2%. May & June revisions cut another 258k jobs.
Fed pivot incoming? Odds of a September rate cut jumped from <20% to over 80%, though no signs yet of a 50 bps move.
GDP slowdown: Q2 headline GDP +3%, but Core GDP +1.2% — slowest since 2022. Business investment -16%.
Tariff shock: Trump’s surprise tariff hike slammed semis and export-heavy sectors.
Market Signals & Technical Picture
Primary Trend: Still positive — 50 & 200-day moving averages sloping up.
Short-Term Trend: SPX closed below 21 EMA → “Cash” signal on daily chart.
Breadth weakening: % above 50-day MA <50%, Bullish % Ratio falling, McClellan Oscillator negative.
Volatility rising: VIX pushed above 20.
Key levels:
Resistance: 6,300
Support: 6,150 (50-day MA)
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ETF Strategy Outlook
With the short-term bias now neutral-to-cautious, I’m:
Holding only positions with strong momentum + trend alignment
Avoiding new leveraged long entries until we see support hold & PPO/MACD turn positive
Watching SPXL/TQQQ for re-entry if trend recovers, and inverse ETFs (SPXS/SQQQ) if breakdown accelerates
Market Edge Game Plan
Limit speculative exposure
Tighten stops and risk controls
Avoid chasing rallies mid-trend — wait for momentum + trend to confirm
Remember: We can’t predict the future, but we can control risk in the present.
See you in Monday’s SPX Daily Levels,
Lee
@LeeAtMarketEdge
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