July 23, 2025
(THERE IS POTENTIAL FOR A PULLBACK IN THE NEAR TERM)
July 23, 2025
Hello everyone
As I pointed out in Monday’s Post, the market has run on twelve cylinders (in a cross-country race) since April – now might be the time to brake, and slow for a curve.
So, if you want to take profits, now is the time to do it, unless you have already done so, as I mentioned on Monday.
After a healthy pullback, we can re-enter trades again.
Options expiring late in the year – November/December should be fine – unless you want to take profits & re-enter trade after pullback. (It’s a personal decision dependent on your risk tolerance).
If you haven’t got a hedge on – bear put spread in (SPX) or (QQQ), now might be the time to think about it. We can squeeze money out of the markets in both directions.
As you know, one investor’s bull market is another investor’s bear market. Trading and investing are all about your own personal perspectives and objectives. There is not one proper way to invest and speculate in the markets (as I have said many times).
Looking at the Invesco QQQ Trust, which tracks the Nasdaq 100, you’ll see a sharp rise from the April lows. You can see that the MACD tracked closely with the QQQ price through May.
In June, QQQ broke through the former $540 double top resistance level, which is now acting as support and a target level should a pullback manifest.
To protect your gains in the (QQQ), you could bring in a short hedge via the ProShares Ultrashort QQQ ETF (QID) to protect gains. (QID) is trading around $24.61.
Keep in mind, as (QQQ) goes up, the (QID) goes down.
Wednesday brings significant tech earnings to the table. Alphabet, ServiceNow, and Tesla will be reporting.
Next week, the Fed Reserve meeting is upon us, as well as more earnings reports.
Other macro markets that could potentially impact the stock market need to be considered.
Look at this gold chart of the (GLD). We can see gold is now pushing up against a strong resistance area, threatening to break to the upside. If gold does break to the upside, silver will probably follow along. But always keep in mind that an upside break can turn into a false break, so please be aware of this.
The bond market is also worth attention here. The (TLT) chart is showing what could be interpreted as an inverse head and shoulder pattern. Note also the MACD divergence.
So, again, some profit taking and hedging before getting into the thick of earnings season after a historic 40% run in less than four months seems reasonable, and very sensible.
In the bigger picture, this possible pullback could be interpreted as just noise and part of a market rhythm. The AI-driven technology bull market (bar a few hiccups) should continue into year-end, and into 2026.
NEED TO KNOW CORNER
Bank of America has just raised its price on Amazon (AMZN). The bank has lifted its price target by $17.00 to $265. That suggests shares could gain 16.5% from their previous close.
Amazon is set to report financial results on July 31.
Reasons for the price hike target on Amazon:
Strong e-commerce data
Strong AI demand and Amazon Web Services growth
Currency tailwinds
Longer Prime Day sales
Risks:
Tariff uncertainty
Recessionary fears
SOMETHING TO THINK ABOUT
Cheers
Jacquie