This week, Bitcoin surged past the $112,000 mark, confirming the bullish momentum flagged last week. While crypto headlines are heating up, the focus remains on cross-asset market regimes, not on chasing crypto trends. The overall market regime since April’s lows remains “risk-on,” with both Bitcoin and various retail names hitting new highs.

Key Highlights:

• S&P 500: Flattish performance for the week.
• Brazil: Under pressure after the U.S. imposed a 50% tariff.
• U.S. Dollar: Slight bounce after a 10% decline over six months; now at 1.17 vs. the euro.
• Bitcoin: Up 7% for the week.
• Copper: Major breakout following U.S. tariffs.

  

   

The Dispersion Trade: Winners & Losers

A major theme continues to be dispersion trading—selling index volatility and buying single-name volatility. While indices like the S&P and NASDAQ stayed flat, there was significant divergence among individual stocks:

• Software Sector: Early signs of AI-driven disruption; expect some names to face 60–80% declines in coming years. Watch ETFs like IGV for opportunities.
• Airlines: Strong performance, with sector ETF JETS up ~10% after positive earnings.
• Cyclicals: Mixed signals, but discretionary names are worth monitoring.

  

   

Sector Performance Table:

Macro & Rates Update

• 10-Year U.S. Yield: Steady at 4.4%. Despite efforts to push yields lower, rates remain sticky.
• Fed Watch: No rate cut expected at the next meeting. Odds for a September cut are around 70%, but expectations for Fed easing are fading.
• Volatility: S&P implied volatility at 16%; realized volatility much lower. VIX 9-day at 13%.

  

   

Technical Analysis Recap

• Airlines (JETS): Breakout on strong earnings and volume.
• S&P 500 / NASDAQ: Sideways trading, but both remain at all-time highs.
• Russell 2000: Outperforming S&P and NASDAQ since late June.
• Bitcoin: 7–8% move higher, confirming last week’s bullish call.
• Copper: Breakout after U.S. tariffs.
• JP Morgan: Pulled back after a breakout; earnings season starts Wednesday.
• Nvidia: Hit $4 trillion market cap midweek, with retail-driven call option activity.

Market Regime & Retail Flows

• Leveraged ETFs: Massive growth since 2020, especially among retail traders in names like Nvidia and Tesla.

  

  Source: Nomura

• Options Activity: Retail traders heavily favor options, often resulting in losses.
• Market Breadth: Concentrated gains in a few names; overall breadth remains weak.

Upcoming Events: Macro & Earnings Calendar

• Tuesday: CPI (Inflation)

  

   

• Wednesday: PPI (Producer Prices)
• Thursday: Retail Sales
• Friday: Housing Starts, University of Michigan Confidence
• Earnings Season: Kicks off with JP Morgan, ASML, TSM, Netflix, and more.

  

   

Q2 earnings growth expectations have been lowered to 4% (from a typical 7%), setting a low bar for the season.

Strategy Corner

• Volatility Remains Compressed: Despite macro events and earnings, the market is pricing in little movement (SPY weekly straddle at ±1.3%).
• Protection Trades: With July seasonality favorable but August less so, consider S&P downside spreads with 7–10% protection over the next two months. Current risk/reward is 9:1.

Community & Mentoring

Interested in joining the trading community or mentoring program?

• Discord: 1 free channel, 30+ premium channels ($75/month)https://discord.com/invite/Yf42SgAx7f

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• Mentoring: Limited seats for September start

Have a good Trading Week!

For any questions or to join our mentoring sessions, email us at

Greg📩 Contact: greg@duponttrading.com