The TML Talk | August 1st, 2025

Market Overview

• This week, markets encountered their first notable pullback after an extended run, closing below key short-term averages like the 21- and 23-day lines on the Nasdaq and S&P, marking the end of one of the longest market cycles on record. The reversal came amid ongoing earnings volatility, Fed commentary, tariff discussions, and geopolitical tensions, but nothing appears fundamentally broken—leaders that drove the advance are digesting gains constructively, with relative strength shining through in pockets like aerospace/defense, fintech, semiconductors, and emerging biotech plays. Small caps and the Dow weakened earlier but held logical supports at their 50-day lines, suggesting the broader uptrend remains intact, though a deeper test toward prior highs or the rising 50-day could unfold as part of healthy rotation.
• Crypto-related names and proxies paused alongside Bitcoin and Ethereum after sharp rallies, yet showed resilience with no major breakdowns, aligning with the market’s need for a breather following outsized moves. Breadth narrowed amid the churn, but money flows into defensive areas like select biotechs and infrastructure themes indicate rotational support rather than outright capitulation. As long as volume remains controlled on the downside and volatility cools without heavy distribution, this 5-10% recalibration could set up for renewed upside, with focus shifting to names exhibiting tight action and relative outperformance during the pause.
• Leading setups maintained poise near supports, respecting shorter averages or prior pivots even as indices faltered, underscoring the importance of monitoring where institutional interest persists. Thematic strength in space, drones, quantum-adjacent power, and AI infrastructure continued to underpin participation, bolstered by liquid IPOs and fresh bases forming in high-quality groups.

Actionable Takeaways

• Enforce Market Cycle Discipline: With the cycle ending on a close below the 21-day, halt new buys and tighten stops on existing positions; use the indicator to signal re-entry only after reclaiming that level, avoiding FOMO-driven adds that amplify downside risk.
• Prioritize Relative Strength Leaders: Scan for stocks holding above their 21-day while indices test supports, sorting up-on-volume results by 6-12 month RS to identify rotation into resilient groups like aerospace or fintech—focus on liquid names with earnings catalysts for conviction.
• Manage Earnings Risk Proactively: In volatile reports, favor post-earnings clarity over pre-report gambles; trim extended holdings if implied moves exceed cushions, blending technical holds at averages with fundamental checks to navigate gaps and fades.
• Embrace Rotational Patience: Track prior leaders like hoods or robloxs for re-entry on tight pullbacks to 21/50-day confluences, ignoring wide/loose action in favor of setups confirming higher highs/lows—use weekly/monthly views for longer-term context without forcing trades.
• Refine Position Sizing for Volatility: Limit enhancers like whippy IPOs to small sizes that satisfy trading urges without disrupting core holdings; build cash defensively now, redeploying into names shaping early-stage bases as the cycle resets.
• Incorporate Group Confirmation: Favor stocks with thematic basket support, such as space/drone plays or semi infrastructure, watching for volume spikes and RS line upturns to validate entries—avoid isolated movers lacking peer strength.

Stock Mentions and Commentary

Communication Services – Interactive Media & Services:

• $ASTS: Holding tight at short-term averages with minimal downside breach, relative strength standout amid market weakness; liquid leader in satellite theme, watch for resumption above 21-day as potential early-stage buy.
• $META: Grinding steadily but paused at highs, earnings out with deceleration but still solid; benchmark for Nasdaq health, not flashy yet rotational anchor—monitor for context over direct action.
• $RBLX: Digested earnings gap aggressively after tripling into reports, now basing constructively near supports; core leader with monthly breakout potential, add on tighten-up for next leg higher.
• $RDDT: Explosive post-earnings move on heavy volume, reversing market trend with tight closes; high-potential enhancer, pay close attention for base resolution as money rotates in.

Consumer Discretionary – Restaurants & Retail:

• $DASH: Coiling at green-line breakout zone with controlled action, slower but promising on longer terms; earnings loom, favor post-report for directional shift—keep eye on upside resolve.
• $ODD: Respecting orange line support amid whipsaw, healthy consolidation after strong advance; shaping well technically, watch RS line clearance for upside bias in specialized retail.

Financials – Capital Markets, FinTech, & Crypto Infrastructure:

• $CHYM: IPO whipsaw but holding higher highs/lows above 21-day, potential for 1999-style power; enhancer in hot fintech, needs tightening for engagement—monitor volume for cues.
• $HOOD: Stellar hold at supports despite gap-down volatility, earnings fine with relative strength shining; core position, buy more on breather as top leader in brokerage/crypto space.
• $IBKR: Advancing conservatively with group confirmation from peers like Schwab; reliable benchmark for fintech health, lesser exposure but track for rotation signals.
• $SEZL: Stellar run digesting at supports, highest-ever volume on earnings catalyst; enhancer with gas left, watch for new base setup as IPO leader.
• $SOFI: Stair-stepping higher with minimal damage, DeFi standout respecting averages; institutional appeal anchors conviction, core for growth plays post-breather.

Health Care – Biotechnology:

• $CDTX: Holding tight in biotech rotation, reasonable revenues with no major breaks; enhancer for market health, low hurry but monitor flow.
• $COGT: Biotech holdout with support at averages, part of broadening strength; thin but viable enhancer, group context key.
• $HIMS: Resilient in healthcare supplies, stair-step action without breakdown; revenue stream supports, enhancer for swings—watch event risks.
• $HNGE: IPO in healthcare refusing to crack, liquid enough with whippy ranges; enhancer to see if shapes better, conditional watch.
• $NKTR: Undercut recovery with tight holds, high volatility but healthy in group; enhancer for risk-tolerant, verify catalysts.
• $RYTM: Favorite in biotech batch, shaping for breakout with revenues; event risks but enhancer with position potential—fundamentals favor.
• $SMMT: Speculative biotech holding notably well, liquid with earnings; enhancer watch, pay attention if money flows persist.
• $TMDX: Stellar monthly/weekly in equipment/supplies, stable revenues outside pure biotech; liquid leader, rotational strength worth noting.

Industrials – Aerospace & Defense, Infrastructure:

• $AVAV: Drone leader with highest-ever volumes, tight flag at supports; core position in strong group, breakout watch as theme leader.
• $PSIX: Stair-step march in own bull market, tripled with logical pullbacks; enhancer but liquid, keep eye despite whip.
• $RKLB: Space tech blasting to highs, minor breather post-breakout; enhancer in hot theme, watch 50-day catch-up for base.
• $SMR: Prior nuclear leader digesting, wide/loose but potential for runs; enhancer, manage volatility—group rotation key.

Information Technology – Semiconductors, Software, & AI Infrastructure:

• $ALAB: IPO power with Nvidia ties, wide but stronger than market; enhancer in semis, watch tighten for leadership.
• $APLD: Massive upside bars in data centers, liquid with revenues; potential big leader, relative strength standout—earnings catalyst ahead.
• $APP: Sideways basing perking up into earnings, healthy relative to weak tape; watch gap reaction for rotation catch.
• $ARX: Flagging with interest spike, liquid but uncertain; last-minute enhancer, monitor for resolve or fade.
• $BKSY: Space tech breather post-breakout, not ideal but constructive; enhancer if bases, group theme supports.
• $DAVE: Shaping right side after pullback, software strength returning; enhancer for setup, prior leader vibes.
• $NET: Stellar cybersecurity hold, earnings reversal but supported; liquid institutional quality, big leader potential.
• $NVDA: Clean breakout pausing at supports, healthy breather needed; semi titan, watch purple line or 50-day for adds.
• $NVTS: Lower-priced semi holding fine, pink day resilience; enhancer in group, no major issues—liquid enough.
• $ORCL: AI benchmark marching up averages, stellar long-term; high-quality leader, expect hold at supports.
• $SMCI: Pushing higher in semis, stage-one reset after undercut; powerful enhancer, rotation beneficiary.
• $TSSI: IPO stellar performer stair-stepping, liquid with power; enhancer that could hot up, watch tighten.

Materials – Industrial Metals & Mining:

• $MP: Flagging but failure risk with earnings, DoD/Apple contracts add intrigue; enhancer in materials, careful on whip.

Thematic ETFs, IPOs, & Bitcoin Proxies:

• $GLXY: IPO stair-step with power, reminds of 1999 winners; high-conviction watch, drool-worthy if tightens—held prior highs.
• $IBIT: Bitcoin proxy pausing with crypto breather, steady despite pull; enhancer for exposure, track tone.

Utilities – Alternative & Nuclear Energy:

• $OKLO: Nuclear whippy but leader potential, needs time; enhancer for managed upside, risk volatility.