Video summary
The S&P 500 market is entering a week characterized by increased fragility following a volatile end to the previous quarter and upcoming US holidays. While the broader index held its ground last week, leadership stocks in the AI and semiconductor sectors faced significant pressure due to concerns over oversupply in AI infrastructure, highlighted by Meta's fluctuating stock price and profit-taking among key chip manufacturers like Micron and Sandisk. This sentiment was not limited to the United States, as South Korea experienced extreme volatility with its Kospi index triggering circuit breakers before rebounding, while Japan weakened and China's tech sector suffered its worst decline since Liberation Day. Globally, investors appear to be reassessing their exposure to AI infrastructure, a shift compounded by softer macroeconomic data such as the June jobs report which has pushed market expectations toward a more dovish Federal Reserve stance, though the possibility of rate hikes in December remains priced in.
Institutional positioning is showing signs of cooling after a strong buying impulse from June lows, with smart money indicators dropping to their lowest levels since mid-May as institutions appear to be taking profits into recent rallies. Despite this shift, dealer gamma has risen for four consecutive sessions, creating a pinning effect that maintains stability in the broader market even as top-performing stocks struggle; however, these supports are vulnerable to breaking if catalysts emerge. The upcoming week presents two primary focal points: the release of FOMC minutes on Wednesday, which will clarify the Fed's seriousness regarding rate hike projections amidst dissenting voices, and the massive listing of SK Hynix ADRs in the US on Friday, expected to weigh on semiconductor sentiment and provide a major read on the memory cycle. Additionally, traders are advised to monitor oil prices, as geopolitical headlines involving Iran near the Strait of Hormuz could quickly impact crude levels which currently hover around $70 without significant pricing in for risk.
Technically, the market maintains a bullish bias on higher time frames, with the monthly chart remaining above its VWAP and testing a pivotal level at 6 while awaiting a close through the extended target at 7800. On the weekly timeframe, the index is testing the year-to-date value area high near 7655, with support established at the anchored volume average price around 7268, though current trading levels sit well above this floor. The daily chart suggests a potential ascending triangle scenario with volume points of control in the 7440 to 7450 range serving as a critical bull-bear zone; a breakout above this area would target the initial upside objective between 7740 and 7750, while a failure to hold support could lead to a test of the weekly pivot at 7300. The immediate intraday focus remains on the gamma flip level in the 7550s, where dealer action is expected to dampen volatility until that support holds or reverses into the delta flip zone around 7490 to 7500.
Given the cautious catalyst-heavy nature of this week, the recommended strategy is to remain selective and avoid chasing AI strength without proper downside protection. Traders should plan their entries based on bullish reversal patterns forming within the identified bull-bear zones rather than reacting aggressively to short-term fluctuations, especially as institutional demand has not yet improved to offer the same support seen throughout June. The primary weekly target remains a test of the value area high near 7630, but if support fails in the delta flip area or the market drops into the 7410 region, a more meaningful downside correction toward the swing high at 7590 and potentially the pivotal 7300 level could ensue. As always, the emphasis is on planning the trade before execution and managing risk carefully while waiting for the next clear catalyst to drive the market direction forward.
Read the full video transcript
Welcome traders to another Tickmill
trading update with me, Patrick
Munnelly. Want to update the S&P 500
view using the E-mini futures contract
and put together a trade plan for the
week ahead looking at some high
probability action areas
and some price targets that we can set
our sights on for for the week ahead.
So, where are we up to? Well, this week
the market comes in with a slightly more
fragile setup after a noisy end of month
end of quarter and obviously July 4th
holidays in the US. So, last week the
S&P held up slightly but the Nasdaq did
slip and the biggest story was really
beneath the surface.
AI and semiconductor leadership came
under pressure after Meta's cloud
computing headlines raised fresh
concerns about oversupply in AI
infrastructure. Meta briefly surged on
the news and then faded hard and that
triggered profit taking across key chip
memory names like Micron and Sandisk.
Pressure was limited
wasn't just limited really to the US.
South Korea obviously saw extreme
volatility with the Kospi hit by a sharp
drop that actually triggered circuit
breakers for staging a major rebound.
SK Hynix and Samsung both sold off
despite announcing major domestic
investments in memory and packaging
capacity. Japan also weakened. Taiwan
did held up slightly better but China
tech suffered its worst decline since
the liberation day route. So, globally
the message is clear. Investors are
reassessing their AI infrastructure
bets. On the macro side, the June's job
report was soft with only 57K jobs added
and ADP also pointed to weaker private
payroll growth. That's pushed the market
towards a more dovish Fed
interpretation.
July hike odds have been slashed, but
December still prices in the possibility
of a full hike. So, the debate remains
live. Positioning is where things get
more interesting. Quiet institutional
buying has started to fade. Smart money
indicators have dropped to their lowest
level since mid-May in just a single
session. This is not a full exit yet,
but it does show that the strong buying
impulse that we have been riding from
the June lows has started to cool.
Institutions bought that dip hard, rode
the recovery, and appear to be taking
some profits into last week's rally. At
the same time, dealer gamma has risen
for four straight sessions, creating a
pinning effect around the index. That
helps explain why the broader market
looks stable, even while leadership
stocks started to struggle. But, these
pins only hold until a catalyst breaks
them, and this week gives us two main
areas of focus. We have the FOMC minutes
on Wednesday, and then we have the SK
Hynix ADR listings in the US on Friday.
The options market is also under pricing
risk. Realized momentum remains fast,
but protection is still relatively
cheap. That mismatch helped last week,
and if put buying continues to unwind
whilst leaders weaken, a sudden rush to
hedge could become the downside
catalyst. This is not a market where you
need to be aggressive. For now, caution
makes sense until institution demand
improves or support clearly fails.
Calendar starts light today with ISM
services expected around 54.5. Tuesday
brings us trade balance data. Then
Wednesday's the main macro event with
the June FOMC minutes at 2:00 p.m. The
focus will be on how serious the Fed was
about the upgraded rate hike
projections, projections, how much
dissent there was, and where war stands
after the softer jobs data. Thursday
brings jobless claims and existing home
sales. Friday may look quiet on an
economic calendar level, but it matters
for the chip story. SK Hynix is is
expected to list roughly 29 billion in
fresh ADRs and the ticker SKHY, the
largest listing of the year. Now, that
could weigh on the semiconductor
sentiment into the end of the week and
provide a major read on the memory
cycle. Also, keep one eye on oil. Iran
headlines around the strait are starting
to bubble again, but crude remains in
around that $70 level or just below,
suggesting the market is not pricing in
much geopolitical risk.
The kind of ignored headlines can matter
quickly, so keep an eye on that. Bottom
line is that this is cautious catalyst
heavy week. Fed minutes can reset those
rate expectations, and SK Hynix listing
can pressure the chip trade. And
positioning is no longer offering the
same support it did throughout June.
Stay selective, avoid chasing the AI
strength, and consider keeping downside
protection while the market waits for
the next clear catalyst would be my uh
my high-level read. Moving to the
technical picture,
starting with the monthly chart, uh
bullish on the uh the monthly VWAP setup
here in terms of momentum. We still
continue to test that pivotal uh 6
and have yet to see a close through
there or the extended range target at
the 7800 level. So, we are seeing a
little bit of uh momentum come out of
the market here on the higher time
frame, but, um, we do remain in a
bullish, uh, stance. On the weekly time
frame, we're testing the year-to-date
value area high, which sits at that 7655
level. Again, until we start to see a
close above there, difficult to get an
all clear read on the upside. We do
have, um, support coming in at the 72 68
area, which is the anchored weight of
volume average price from the
year-to-date low, but, uh, we trade well
above there at the moment. That's a
level to keep an eye on if we do start
to see a deterioration in terms of, uh,
in terms of sentiment. Moving to the
daily time frame, again, our bias is
long here. We're trading above the daily
VWAP, which comes in in and around the
7520-7530
area. So, that's a constructive read for
now. What we are looking at is the
potential for an ascending triangle
scenario here. We have the volume point
of control on the daily time frame back
into that pivotal 7440-7450
area, which I'll be using as my weekly
bull bear zone. If we can get a break
through here, um, then we will be
targeting, uh, first upside objective is
going to be that 7740-7750
area. So, let's bring this into, uh, the
plan for the week in terms of levels
that I'm watching. So, on the 4-hour
intraday trading time frame, uh, we're
trading at the gamma flip level on the
weekly time frame here. This 75, uh, 50s
is where that, uh, that gamma flip
lives. And so, whilst we're trading
above there, we're expecting grinding
action to the upside with dealer action,
um, dampening volatility. If we start to
lose that support, then we'll be looking
for a test of the delta flip zone, and,
um, my daily bull bear zone coming in at
that 7490,
7500 level again. Any bullish reversal
patterns there, we're looking to engage
on the long side and ultimately looking
for the same path to the upside where
our initial target on the week is going
to be a test in the value area high,
7630, 7620 is our daily projected range
resistance. If we fail uh to hold
support in the delta flip area, then
we've got that weekly bull bear zone so
that's 7450, 70 uh Sorry, sorry, 7460,
7450 is really key. Again, bullish
reversal patterns in that area, I'm
looking to engage, maintain
uh a positive stance and a constructive
stance on the market and we'll be
looking for our same upside objectives.
However, if we do lose support into the
7410 area, then we will be looking for a
more meaningful downside and we have an
equality objective versus this swing
structure and the swing high at the
7590s which should see us testing the
pivotal 7300 level to the downside. But,
like I say, whilst we're above the bull
bear zone, we're looking at our long
areas as opportunities to engage on the
long side and play for the upside
targets as mentioned. As always, there
will be daily updates through the
Tickmill blog so uh that will keep you
abreast of my daily levels and daily uh
daily trading plans. And most
importantly, as always traders, plan the
trade, trade the plan, and manage your
risk. Until next time, thanks very much.