Embracing Volatility - Week Ahead 7/27/26

FOMC, Seasonality, Oil Update, and Weekly Trade Idea

Last week was a standard sell the rip regime where selling the open and buying the close worked pretty well. Google reported earnings and while many can debate the earnings themselves, it’s the reaction that matters, and it was quite negative.

“The greatest good you can do for another is not just to share your riches, but to reveal to him his own.” -Benjamin Disraeli

We are squarely in the high volatility window of this cycle and it hasn’t disappointed. Staying hedged isn’t the worst idea as some of these selloffs can be violent and red flags continuing to mount. Although, I think some upside trades continue to show themselves and I expect more this week. Stay nimble, embrace the volatility, and it’s okay not to trade an environment that doesn’t suite your own trading style. Why rush it?

Market Backdrop for the Week Ahead

• Weekly Seasonal

• FOMC - Wednesday

• Earnings Calendar

• Index Technicals

• Week Ahead Trade Idea 💡

Ketchup on the 🌮 ‘s

The Iran war trapped many last week as traders positioned for a “taco” but the taco never came. Over the weekend we are seeing some signs of things cooling down in Iran and the White House. Futures are up big currently.

Taco’s don’t taste as good over the weekend! I believe we won’t know how this Iran war shakes out until early August as you will see in the seasonality below. The path we break into will be huge for the market but history says 2nd Term Presidents often find a way to get oil down before Mid Term Elections.

Weekly Seasonal

Tech may be poised to bottom (short term at least) this week. FOMC is Wednesday as that particular date does have a bearish lean with Thursday seasonally bullish. That combination may be a good setup for buying the dip mid week (if we see one)

FOMC

With what we have been seeing in yields, a more hawkish lean from Warsh may be partially priced in already. Any softer or more dovish tone could setup a bounce in something like TLT and rate sensitive names. With futures currently green from the Iran news over the weekend, TLT is showing up nearly a full 1% in the overnight market. I like the idea of being patient this week around FOMC, I want to let the setup come to me and then execute.

Earnings

Big slate of earnings this week, one of them is my trade idea with a 100% hit rate historically for the setup I’m seeing. Wednesday remains the key date to watchout for with META, MSFT, on top of FOMC. Thursday we have AAPL and AMZN who could be the saviors if Wednesday turns into a disaster.

We know META is spending more capex, so I don’t see risk there for the overall market. Microsoft earnings “reaction” is likely key for the software sector in general. A strong move could be a big one to the upside.

Apple has followed the seasonal path I shared to start the month and really helped carry the portfolio. Wouldn’t be surprised if it cooled off a bit.

Index’s

S&P500

With futures still green as I write this, a hold and break above 746 would be key to get continued strength. Rejecting there could setup a downside target near 725

NASDAQ

Tech filled the gap on Friday that just so happened to align with the weekly 20MA. Not surprised to see a bounce here but will it be more than that? Clearing 703 level would be a good start but then watch that downtrend line in the low 720’s.

Week Ahead Trade Idea

Amazon has a 100% hit in the 1H of August during a Mid Term Year. Lets review what I am seeing here.

Final Thoughts

Vol season is my favorite time of year, lots of trading opportunities. I wanted to open up some more data this week to free subs so hope you enjoyed.

My premium group will be getting a deeper dive for what I think comes next. The Polycarp Q3 Portfolio continues to perform well and I will be dropping the August build this week. Cheers!