Weekly Market Recap, Watchlist & Trade Highlights 08/04/25
Overdue market pullback after Fed and Mag7 earnings
Market Recap
This week marked a notable change in market character, with the first real pullback since the rally that started a few months ago.
QQQ 0.00%↑ staged a sharp intraday reversal after strong earnings from Microsoft and Meta - gapping up >1% but closing red. This represents a typical"news failure" event as coined by Jason Shapiro, suggesting bullish catalysts are no longer being rewarded, which can precede a shift from risk-on to risk-off sentiment.
Small-cap growth names continued to lead to the downside, showing internal market deterioration even before the mega-cap reversal, with IWM 0.00%↑ closing down 2% on Friday.
Bitcoin (BTC) and Ethereum (ETH) both broke below their short-term moving averages (typically the 10-day or 20-day), signaling a loss of near-term momentum.
The VIX closing at 20 on Friday marks a notable departure from the low-volatility environment that’s defined much of the recent rally.
Until the indices resume their uptrend and more stocks form constructive bases, it’s good to stay nimble and perhaps adopt a shorter timeframe approach with less swing exposure while the market pulls back.
Watchlist
Even though most of the Mag 7 have mostly reported, next week remains fairly busy for earnings reports from some popular growth stocks:
Monday: PLTR 0.00%↑ HIMS 0.00%↑
Tuesday: AMD 0.00%↑ SMCI 0.00%↑ ALAB 0.00%↑ OPEN 0.00%↑
Wednesday: UBER 0.00%↑ SHOP 0.00%↑ NVO 0.00%↑ APP 0.00%↑ IONQ 0.00%↑ SYM 0.00%↑ JOBY 0.00%↑
Thursday: QBTS 0.00%↑ VST 0.00%↑ RKLB 0.00%↑ SOUN 0.00%↑ SMR 0.00%↑
Friday: TEM 0.00%↑
Some recent positive earnings reactions stocks that showed relative strength lately to the market downturn:
Weak stocks on the short side if market continues to downtrend:
TSLA 0.00%↑ is trading below both long term moving averages (50 and 200SMA) and looks to be on the edge of breaking down from a wedge pattern.
CRCL 0.00%↑ broke lower after COIN 0.00%↑ reported weak earnings on Thursday and is also making a lower low on the daily chart.
IONQ 0.00%↑ broke under the 50 daily moving average and has upcoming earnings this week.
MSTR 0.00%↑ broke to the downside with BTC weakness.
FIG 0.00%↑ oversubscribed IPO that saw a huge surge after it started trading Thursday. As the original pricing was $33 per share, there could be a trade short if we break Fridays low.
UNH 0.00%↑ is also worth mentioning, continually making new lows after a steep -50% drop from April early in the yeare. If price continues to fall steeply and accelerates to the downside, there could be a bounce trade after capitulation.
Trade Highlights
FIG 0.00%↑ long trade and hold into afterhours when it started to hold VWAP into the close and trended higher:
SOFI 0.00%↑ fading the earnings gap after an extended rally, the stock gapped down after announcing a $1.5bn offering:
APLD 0.00%↑ earnings breakout, bolstered by the strong report by META 0.00%↑ and increased capex spending:
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