S&P500: -1.49% | NASDAQ: -2.26% | DJI: -0.72% | OIL: $86.63 | BTC: $77,286

The big story this week was crypto and the bond market. The crypto market was relatively simple: it got bullish. BTC and ETH rallied over 25% adding billions in market cap. Many were wondering when crypto was going to have capital begin flowing and rotating into it, and it appears like a lot of the gains from AI are flowing into crypto right now; momentum is strong going into next week. The next biggest story is the bond market. The US30Y hit the highest level since 2007 and the US10Y is sitting above 4.7%, all putting pressure on US equities. This comes at a time when the US economy hit $40 trillion in debt as well. So all eyes have been on the US bond market and debt and the levels these assets/metrics are hitting is causing some fear among investors. To help ease some of the fears, the US Treasury increased to a 4$ billion per operation of buybacks to help improve the liquidity in the longer dated bonds (10 and 30 yr mostly). This helped momentarily, but yields bounced back after a day, keeping pressure on the stock market, which had the SPY and QQQ slip over 1%. With equities selling off a bit this week and bond markets getting hot, crypto seems to be an outlet for investors. We will continue to be monitoring the situation and will be watching for key levels in the equity markets to see if stocks still have some bullish legs to run higher and make all-time highs.

Market Theory #1: Our Bullish Wave Count 🟢

Daily Market Breakdown

With price trading below the daily 8EMA, we can see more downside. With that said, there is massive volume awaiting below at the fib retracement levels that seem to be support levels. We are expecting these levels to hold and act as support and send the markets to new all-time highs. If we see price fall through this volume, then that would be something concerning and likely a larger correction taking place.

Economic Data

Some more inflation data is coming out as well as GDP growth. This one is likely to get some reaction out of it, as investors are looking at all the Capex being spent and want to see results from the spending. We are still likely very early to seeing any sort of real results, but narratives may begin to circulate based off GDP growth rates being slow or not.

Market Sentiment

Back into neutral as equities fall and yields rise. Not at all a surprise. The VIX still hanging around 15, which is low and credit spreads remain tight, with HY sitting at 2.75%. As of now, no major red flags we are seeing in the market sentiment side of the house.

Closing Comments

The bears got a little more to chew on with what is going on in the bond markets. The fact that Bessent tried to ease fears by doubling the treasury buyback from $2-$4 billion, and yet yields rallied the next day, did not sit well with investors. The interesting thing is that we are finally seeing crypto diverge from equities. Will this remain the new norm? Only time will tell, but this has to be a good sign for bulls in crypto. Right now we have a 3-way battle between equites, bonds, and crypto and we will see which side momentum is on.

All though the markets were relatively flat, but ultimately made all-time highs, we saw as this week as a bullish one for the stock market. Started off with a bang with Jensen from NVDA partnering with the largest names in capital markets to allocate $500 billion for the AI buildout. This is obviously bullish for NVDA, but we see this as bullish for the AI trade, as more capital is going to be flowing into the ecosystem. Additionally, cooling CPI and PPI prints helped ease some of the inflation fears, although based off of yields and the bond market, we still suspect that investors fear inflation will be sticky. However, the coolish print we suspect is going to eliminate most of the fears of a hike for the rest of 2026. Credit spreads remain extremely tight and the VIX closed the week below 15. We see the markets as remaining risk-on for August as long as the geopolitical environment continue to inch towards a peace deal in the Middle East.

Market Theory #1: Our Bullish Wave Count 🟢

Economic Data

Market Sentiment

The markets are sitting in greed in a healthily level with the VIX sitting below 15, we are in a risk-on environment.

Closing Comments

For the second week in a row, we are solely focusing on one market theory. After researching the macro levels, we see risk-on remaining the short-term appetite for investors. There are several factors that led us to this conclusion. We have the $500 billion allocation for the AI buildout, credit spreads remaining very tight, cooling CPI/PPI prints, VIX closing below 15, and the sentiment sitting in the middle of Greed. We are still sitting in risk-on positions, but am constantly building our portfolio that we plan on holding through any sort of weakness. The hype in the markets is real, and it is important to enjoy these moments, but understand that things could flip. Currently, we do not see that happening, barring any sort of geopolitical change.

• EPS: -0.37 vs. -0.05 (expected) 🔴

• Revenue: $753.21M vs. $698.89M (expected) 🟢

• Subscribers grew to nearly 2.9 million (+19% YoY in Q2 2026)

• Rest of world revenue: $131.384M (+1,641% YoY)

• Gross margin: 64% vs. 76% for Q2 2025

• Net income: -$86.3M for the second quarter of 2026 compared to net income of $42.5M for the second quarter of 2025. ($47.5M were due to legal)

• Adjusted EBITDA: $60.3M for the second quarter of 2026 compared to $82.2M for the second quarter of 2025.

• FCF: $-68.2M for the second quarter of 2026 compared to $-69.4M for the second quarter of 2025.

• Raises full year 2026 revenue guidance to a range of $3.1B to $3.3B and updates Adjusted EBITDA guidance to a range of $275M to $325M

Commentary: On the surface this was a poor quarter with FCF remaining negative and flat YoY, massive EPS miss, net income deep in the negative, decline in margins and EBITDA was down compared to last quarter. However, after digging into the report, most of that negative was $47.5M in legal (which is a concern on its own being that they have found themselves in lawsuits more than an investor would want). What we are bullish on is their international growth, subscriber count, and raised guidance. Overall, we are not looking to add to our position, we are going to be holding it and monitor performance moving forward.

Technical Analysis

A volatile stock, but currently trading in a tight channel. We have price in a bullish uptrend making higher highs and higher lows. If price can find support at the bottom end of our trend line and make another higher high, we suspect we are in wave 3 and will be able to provide a better price target moving forward.

S&P500: +0.34% | NASDAQ: +0.55% | DJI: +0.60% | OIL: $86.79 | BTC: $63,360

Last week was pure cinema in the stock market. We had tons of earnings with mixed reactions, back-and-forth with the direction in the Iran War, FOMC, and Leopold’s hedge fund selling a portion of their fund to Citadel. Starting with the mixed earnings, we saw META and GOOG’s stock drop after they announced increasing Capex and reported a big drop in FCF. MSFT, on the other hand, clearly emphasized that they will remain FCF positive and that they are keeping 2026 Capex unchanged but have plans for YoY growth in Capex moving forward. MSFT saw a strong reaction after earnings, and as did AMZN, who saw explosive growth in AWS. The markets are doing their best to price in the current status of the Iran War, but is having difficulty doing so since it has been changing so frequently. The FED decided to leave rates unchanged, but the markets seem to be fearing that rates will remain higher for longer and inflation is going to be sticky. We saw bond yields rally as the 10yr. hit 4.7%. Lastly, in a cinematic fashion, Leopold’s fund, Situational Awareness, was pushed into a corner and has to sell a portion of the fund to Citadel. There were narratives floating around the finance world that Citadel created fear by saying the FED will hit us with a surprise hike, just to see equities plummet forcing Leopold to be margin called and forced to sell. No causation clearly, but intriguing nonetheless.

Market Theory #1: Bearish Wave Count 🔴

Market Theory #2: Bullish Wave Count 🟢

Daily Market Breakdown: Short-term forecast

The markets truly are at a very important level. Price has recaptured the 50WMA and is now approaching the previous volume POC that has been acting as resistance. There is a little more volume behind this recent rally and now is the time for the buyers to keep that momentum and push through the volume POC and make new all-time highs. If we see a rejection, we see the 200WMA, along with the 0.382 fib level, getting tested.

Economic Data

Some job information, but overall slower week and the focus will more so be on earnings

Market Sentiment

This Fear and Greed index complements our daily market breakdown; the market is truly in a delicate state and we could see it going either way between buyers and sellers.

Closing Comments

The big story this week will be the bond market and earnings. We have a ton of names reporting this week, and the biggest one will be SPCX. This will mark their first public release, and will also be the cue to unlock millions of shares that will hit the public market. As far as yields, we know Trump pays close attention to that market, and with the 10yr. hitting 4.7%, we have a feeling he is going to do whatever influence he can to simmer that down. From a. technical standpoint, the key level well will be watching is 7,580 on the futures, this is where there is a clear level of resistance, we will find out this week if that holds as resistance, or becomes a launching pad for price action.

• EPS: $-0.56 vs. $-0.56 (expected)

• Revenue: $294.4M vs. $291.01M (expected) 🟢

• Gross profit: $113M, up 76% Y/Y (record).

• Adjusted EBITDA loss: $18.7–19M, improved 54% Y/Y (from ~$41M).

Key Operating Metrics

• In-force premium (IFP): $1.43B, up ~32.5% Y/Y — 11th consecutive quarter of accelerating growth.

• Customers: 3.31M, up 23% YoY (~166k net adds).

• Premium per customer: $433, up 8% Y/Y.

• Gross loss ratio: 60% (with 7% favorable prior-period development).

• LAE ratio: Record-low 5% (vs. industry average ~9%).

• Adjusted FCF: +$19M (5th consecutive positive quarter).

• Cash & investments: ~$1.2B (including ~$330M regulatory surplus

Commentary: Another solid quarter for LMND. A +76% Y/Y gross profit is exactly what you want from a growth name. Guidance remains constant with growth, and we are seeing +20% in customers. We saw some chatter on X about the CFO leaving, but this was a planned transition and zero red flags surrounding that issue.

Technical Analysis

The market had a negative reaction following the earnings and we saw price gap down and make a marginally new low. As of now, these are our current price targets, but if price continues to slip and make new lows, we will adjust these targets. Regardless, our long-term view and forecast remains bullish. Even if price drops down to the 0.786 fib level, we remain bullish. Likely to test the 0.618 fib level and weekly 200WMA, and we’ll see how price reacts when that happens.

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• EPS: $5.75 vs. $1.823 (expected) 🟢

• Revenue: $200.61B vs. $197.03B (expected) 🟢

• AWS revenue: $42.2B (+21% Y/Y // its fastest growth in 18 quarters)

• Advertising: ~$19.8B (+26% Y/Y)

• Operating income: $27.5B (+43%Y/Y)

• Net income: $62.6B (+245% Y/Y)

• FCF: -$7.6B (-142% Y/Y)

  • Operating cash flow: $161.4B

  • Purchases of property and equipment, net of proceeds from sales and incentives: $-169B

• Capex guidance raised (reports of ~$220B for 2026) due to increased memory costs

Commentary: Another absolute monster quester for AMZN. The EPS bears was enormous, and the big headline was the massive growth they are seeing in AWS. Across the board, in nearly every metric, AMZN is continuing to deliver very strong numbers. Moving forwards things are looking like they will not be slowing down either. Even with the raised 2026 CapEx of ~$220B (up from prior ~$200B guidance, partly due to higher memory costs), Amazon will still not have enough capacity to meet all the demand it has for 2026. Additionally, Jassy said he believes this dynamic (demand outpacing supply) will also be true in 2027 and “In fact, the demand we already have for 2028 is striking.” The stock market rewarded this growth, despite the negative FCF and raised Capex. GOOG and META were not so lucky, but AMZN numbers just cannot be looked passed. The underlying theme we see here is that the AI ecosystem is still in early innings and demand shows no shortage in slowing down. This is bullish for the sector, hence why we suspect we are seeing constant rotation in and out of certain names.

Technical Analysis

AMZN has been trading in a nice channel slowly making its way to our 161.8% extension. Although at times price action has been choppy, we are seeing higher highs and higher lows, and that is all you can ask for. The positive reaction aligns well with our theory and forecast, and we see no change to our long-term price targets.

Here are all the drawdowns from all-time highs (Rounded to the nearest % based off Wednesdays close)

• NVDA: -20%

• META: -26%

• MSFT: -30%

• MU: -41%

• SNDK: -57%

• INTC: -42%

• TSLA: -40%

• ORCL: -66%

• AMD: -27%

• GOOG: -17%

• PLTR: -40%

Okay, if I were to show you these numbers, what would you expect the overall market to be down? Maybe at a minimum you would guess -10%, I mean the largest companions in the world are all in a severe correction…

Well you would be wrong. SPY is only down -4% from all-time highs. That is remarkable given what is happening to some of the biggest names, not only in tech, but in the world. The biggest story for the stock market in 2026 has been how resilient it has been. Truly unbelievable. And on top of these names being in massive pullbacks, the 10yr is flirting with 4.7%, the FED is holding firm to their 2% inflation target and kept rates unchanged, and there is a War in Iran that is causing tremendous amount of uncertainty and is having an economic effect with rising oil prices. This truly is a one-of-a-kind market we are living in.

Daily Market News

We felt that it was important to really paint the picture of the type of market we are currently living in. Now going over some of the stock market news this week, the largest one has to be earnings. GOOG and META both received negative reactions after massive decreases in FCF (GOOG was negative) and both raising Capex moving forward. MSFT on the other hand kept Capex unchanged in the short term and emphasized remaining FCF positive, and the stock rallied. Cleary, investors are signaling that they are worried the Capex is going to continue to swallow FCF and ultimately begin to effect margins. Also, it seems safe to say that one could speculate that with FCF being burned for Capex, companies may have to tap into the bond market. We saw NVDA, META, and ORCL do this and recently ORCL got downgraded to a rating just above junk. Also in the midst of a high yield environment, it may begin to get dicey and it will be imperative to keep an eye on credit spreads to try and gauge investors’ risk appetite.

The other big story was FOMC. The FED kept interest rates unchanged and stuck with their target of 2% inflation. There were no votes to cut, and a few to hike. Guidance now from the FED is nearly zero, so investors have to play to facts, rather than the verbiage coming from the chairman.

All-in-all moving forward we see the market as bullish and insanely resilient but continuing to have massive headwinds.

• EPS: $1.76 vs. $1.66 (expected) 🟢

• Revenue: $22.8B vs. $21.86B (expected) 🟢

• YTD cash flow from operations: $3.1B

• Domestic

  • Non-GAAP Operating margin: 8% (+1% Y/Y)

  • Operating profit: $1.188B (+21%Y/Y)

  • Revenue: $14.930B (+6% Y/Y)

• International

  • Non-GAAP Operating margin: 12.4% (-2.8% Y/Y)

  • Operating profit: $623M (-8.7% Y/Y)

  • Revenue: $5.044B (+12.5% Y/Y)

• FCF: $1.6B

• Dividends paid: $2.7B

• $4.7B cash on balance sheet

• Raised FY26 guidance

Commentary: UPS delivered a solid quarter. International growth was the only negative, but most was in the margin compression due to increased fuel costs. The revenue grew nearly 13%, so we are not all too concerned. The fact they delivered $2.7B in dividends to investors while maintaining $4.7B of cash on the balance sheet is extremely healthy. The business itself is poised to take advantage of massive tailwinds. Increases in economic activity with the AI buildout will lean heavily on transportation and a move towards physical AI will likely boost product and increase margins.

Technical Analysis

After price hit its all-time high in Jan 2022, it went into a deep and long ABC correction. This lasted nearly 4 years and retraced all the way down to the 0.786 fib level; a very deep pullback. Since then, we saw a massive surge in trading volume and a strong bounce that resulted in a nearly 50% gain off the bottom. Since then, price has been finding its way and is currently holding the weekly 50WMA and the 0.618. If price can continue to hold this level it would maintain the higher low and continue turning the trend in favor of the buyers. Additionally, UPS is offering a 5.81% dividend at these levels, and with $4.7B in cash on the balance sheet, we have high confidence in management to maintain that return of capital to shareholders.

S&P500: -1.03% | NASDAQ: -2.90% | DJIA: -0.40% | OIL: $85.50 | BTC: $65,090

A wild week as we enter the thick of earnings season. We saw some good and some bad with earnings, but overall the market is giving off bearish vibes. We saw a pretty aggressive gap down on the SPY and the markets failed to recover to close out the week. TSLA was on the bad side of earnings and the stock felt the pain, dropping 14% on Thursday. INTC and GOOG had very strong earnings, but investors seemed to not enjoy the negative FCF and increase in Capex from GOOG as the stock fell nearly 7%. This little nugget might be important as we go into a massive earnings week with META, AMZN, AAPL, MSFT; all of whom are massive Capex spenders (besides Anit-capex AAPL).

The other major story going on is the ongoing conflict in the Middle East. The whiplashing back and forth between air strikes and a peace deal seem to be frustrating the market as they have been reactionary recently. This showed its face on Thursday when oil topped out around $93 and the 10yr. flirted with 4.7%. This coincided with the VIX touching 20 for the first time since June. Overall, it tells us that fear is present, but it still seems like the market is maintaining its resilient nature and broadening out the strength across the different sectors in the market.

Market Theory #1: The Bearish Count 🔴

Market Theory #2: The Bullish Count 🟢

Daily Market Breakdown

Over the last couple of weeks, the markets have leaned bearish in the short-term. We are currently being suppressed by the daily 8EMA (yellow) and price saw a gap down and zero recovery at the tail end of last week. This week there are plenty of potential catalyst that could send price down the the 0.382 fib level which aligns with the daily 200WMA (purple).

Economic Data

Very big day on Wednesday as we will get the FED interest rate decision. The market is expecting rates to remain unchanged, but more importantly investors want to hear the hawkish or dovish tone of the chair. The following day will be some inflation data that may or may not go with what the FED said the day before.

Market Sentiment

Again, we said there is fear present in the market, and that is showing in the fear and greed index.

Closing Comments

This week is a massive week. The biggest headlines will be the earnings from the largest companies in the world, FOMC on Wednesday, Inflation data on Thursday, and the ongoing headlines coming from the White House concerning the conflict in the Middle East. There is massive uncertainty surrounding the markets. We saw a negative reaction from investors about GOOG and its negative FCF and future potential compressed margins, and that many be concerning too many as we enter the thick of earnings season. This fear that is lingering may show its face, just waiting for a catalyst. This is the week where it is important to have a strategy, understand your holdings, and also reconfirm your investing timeline with yourself. We wish you all a green week.

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• EPS: $9.11 vs. $2.877 (expected) 🟢

• Revenue: $119.796B vs. $117.06B (expected) 🟢

• Operating Income/Margin: $40.77B/34%

• Revenues by Segment

  • Subscriptions, platforms, & devices: $12.91B (+15% Y/Y)

  • Google network: $7.303B (-1% Y/Y)

  • Youtube ads: $11.055B (+13% Y/Y)

  • Google Search & Other: $63.27B (+17%)

  • Google Cloud: $27.768B (+82% Y/Y)

• Capex Q2: $44.924B (+100% Y/Y)

• FY26 Capex: Increased from $180-$190B to $195-$205B

• FCF: -$5.855B

• Gemini monthly app users: 950M

Commentary: Another amazing quarter for the juggernaut, Google, and one of the purest AI plays in the market. However, the obvious big red flag is the FCF and Capex. During the earnings webcast, they even doubled down and mentioned raised Capex guidance for FY26 and said Capex will increase significantly in 2027.

The reaction initially, and currently being sustained throughout the overnight, was/is negative. The stock dropped initially over 2-3% and is currently down around 2.2%. The reason this is somewhat concerning is because this falls into the lap of one of the leading bear narratives. Capex will grow and grow and grow and FCF will be next to nothing and margins will begin to diminished and narrow and we won’t see the benefits of all this money spent for who knows how long. Furthermore, due to the lopsided in the supply and demand of the AI ecosystem, Google said the following:

Investors are now seeing the results of this AI race, and have to decide if the momentary negative effects on FCF, margins, and possible net income, are worth the Capex buildouts, and if and when will these hyperscalers see the fruits of their labor.

Technical Analysis

Google is in a very interesting place on the chart. We have a very clean, 5 waves up that hits all the appropriate fibonacci levels and extensions perfectly. After hitting the 200% extension, which is your standard wave 5 target, we saw price begin to pullback. We are still in that corrective structure and price is likely to test the weekly 50WMA and 0.236, which is your first, but shallow, retracement. If that levels fails to hold, we would be targeting the 0.382 as our next likely target. If price is not in its full ABC correction and the weekly 50WMA and 0.236 act as support, we will be targeting the 261.8% extension.

S&P500: -1.19% | NASDAQ: -2.18% | DJIA: -1.01% | OIL: $83.64 | BTC: $64,515

Last week we got a lot of choppy price action with Friday giving us our worst day of the week. We saw decent gap downs in the most of the major indexes and the downside was being led by memory and semis. SNDK fell nearly 30%, INTC around 14%, and MU around 14%; just to name a few. Seems like there were a couple of things floating around the market last week that could be the cause of this weakness.

The first is that a lot of these names that sold off we're the ones that saw massive run ups this year. Profit taking and cooling off is normal and expected when a name is trading over 200% from its weekly 200WMA (MU). Stocks are not built to move in straight lines, and when they move impulsively, as strong as many of these names did, they tend to fall aggressively.

Secondly, the Capex bear narrative seems to be coming back. It seems like investors are again fearing that constant raises in Capex is going to really effect FCF and margins. META announced they are leaning heavily into selling compute and stepping into the cloud business and the stock fell nearly 3% on the news. Additionally, it seems like companies are aware of this and dipping into the bond market to raise debt to fund the Capex buildout rather than send all their FCF into Capex.

Lastly, the War in Iran is seemingly back in full swing. Kinetic strikes have resumed and oil is back above $80/barrel. The conflict seems nearly further than ever before from a peace deal. The fear for investors is that if oil prices remain elevated for a longer period of time, we will likely see it begin to affect the US consumer. Last month we saw the largest MoM inflation drop in nearly 6 years, but that is likely to change if oil prices remain elevated, as energy was the largest influence on the latest CPI print.

Market Theory #1: Bearish Wave Count 🔴

Market Theory #2: Bullish Wave Count 🟢

Daily Market Breakdown

Price has been trading in a very tight range; price structure, RSI, and MACD all confirm this. Up until Friday, things were leaning bullish, however, with Fridays selloff, we seemed to have broken this structure. Now, the thing with trend lines is that they are subjective. However, we can see a break of a structure to some degree, and other technicals confirms this. Price lost the daily 8EMA and has rejected the daily volume profile that is taken from our last major low. As of now, the consolidation we are seeing at the top of the range is acting as resistance. If that continues, we would be targeting the daily 200WMA and 0.382 fib level. Remember, both market theories can have price dip to these fib levels and not have their overall theories be invalidated.

Economic Data

Nothing major coming out this week. The bigger headlines will be earnings and the conflict in the Middle East.

Market Sentiment

Big jump in fear for the markets. A week ago we were neutral and now we have moved into fear. The VIX saw a +12% day on Friday. These two readings align with what we are seeing in the charts, something happened on Friday and weakness seems to be entering the market.

Closing Comments

Clearly something shifted at the end of last week, hence why we titled this weeks newsletter “Something shifted on Friday.” Now we gave you 3 over-arching reasons we suspect are the culprits, but regardless of which is the blame, the data is confirming this seemingly shift in sentiment and control. The fear and greed index jumped into fear, the VIX saw a +10% day, and price action lost the daily 8EMA. Going into this week what we are going to be looking for is the following: If selling continues, is it going to be a broad market selloff where nothing is safe, or will we see the market continue to prove its resilience and just rotate gains into another sector of the market?

• EPS: $0.80 vs. $0.79 (expected) 🟢

• Revenue: $12.6B (+13% Y/Y)

• Operating margin: 33%

• Net income: $3.401B

• FCF: $1.525B

• Operating income: $4.2B (+11% Y/Y)

• Expected revenue growth Q3: +12%

• FCF: $1.5B vs. $2.3B Q2 2025 (The negative Y/Y number is due to the Warner Bros. Termination fee and taxes surrounding that event)

Commentary: Overall not a great quarter for Netflix. There were some beats, but not by large amounts. There was also a lot of misses, the biggest one being FCF. Big drop down from last year, and they are partially blaming the WBA termination fee. They are reaffirming guidance for the rest of year, but this seems to be like a transition quarter. Actually aligns with the stock performance. Price has been in an ABC correction and seems like investors were pricing in this quarter already. Could be good news that we are closer to a bottom than the top. However, stock prices did continue to selloff after this release.

The overnight price action puts price below the weekly 200SMA, and we are seeing confluence at the 0.618 fib level. That is the golden standard when it comes to retracements and we have historical volume that may come in and act as support. That is where we will be looking to potentially make an entry.

• EPS: $6.38 vs. $4.907 (expected) 🟢

• Revenue: $112.03B vs. $110.81B (expected) 🟢

• Earnings from Operations: $8.0B

• Updated Full Year 2026 Earnings Outlook Range to $18.45 to $18.95 Per Share; Adjusted Earnings Range of $19.50 to $20.00 Per Share

• Net margin: 4.9%

• Cash flows from operations were $11.1B

• Shares repurchased: $5.0B

• Q2 2026 medical care ratio was 86.7% compared to 89.4% in Q2 2025

• Optum supported more than 120 million consumers and generated revenues of $65.7B and earnings of $4.0B, representing 160 basis points of margin expansion year-over-year.

• OptumRx’s Q2 2026 revenues were $38.3B compared to $38.5B in Q2 2025

Commentary: UNH has shown its powerhouse status at delivering value back to the shareholders. EPS crushed, share buybacks are healthy, dividends paid and revenues are looking strong. UNH has, and is continuing to be a leader in the health space. Stability is a common theme across metrics with some aspects of growth

Technical Analysis

UNH is in a very healthy state from a technical/chart perspective. After hitting its all time high, price went into a deep correction. We saw a clean ABC correction that landed at the 0.618 fib level. After this we got a strong bounce followed by a pullback. This was our intermediate structure, and that second, smaller pullback held creating our first major higher low and reversing the trend. Since that, price went impulsive and aggressive, which is very typical for a wave 3, and has recaptured the weekly 200WMA. The white wave count are our intermediate price targets.

• EPS: $20.98 vs. $14.507 (expected) 🟢

• Revenue: $20.34B vs. $16.22B (expected) 🟢

• Net Earnings: $6.63B

• Annualized ROE: 23.5%

• Assets Under Supervision: $4.04T

• #1 in announced and completed M&A, equity & equity-related offerings and leveraged lending; #2 in high- yield debt

• Increased quarterly dividend by 11% to $5.00 per common share in 3Q26

• Net revenues in Global Banking & Markets: $15.52B for Q2 of 2026, 53% higher than the Q2 of 2025 and 22% higher than the Q1 of 2026.

• Net revenues in Asset & Wealth Management: $4.60B for Q2 of 2026, 20% higher than Q2 of 2025 and 13% higher than Q1 of 2026.

• Net revenues in Platform Solutions were $221 million for Q2 of 2026, 64% lower than Q2 of 2025 and 46% lower than Q1 of 2026. The decrease compared with Q2 of 2025 primarily reflected net markdowns recognized in net revenues related to the Apple Card loan portfolio, which was transferred to held for sale in the fourth quarter of 2025.

• Global core liquid assets averaged $555 billion for the second quarter of 2026, compared with an average of $494 billion for the first quarter of 2026.

Commentary: Goldman posted a strong earnings showing significant growth and was met with a positive reaction from investors, as the stock jumped 9% today. A healthy Asset and Wealth is confirming that the stock market has been very robust and people are creating wealth and searching for ways to have it managed. This has been a common theme I have noticed and heard across the industry. Banking operations are booming and this is in a relatively high rate environment. As more and more companies tap into the bond market, GS is signaling that capital is ready to deploy and fuel that Capex AI buildout.

Technical Analysis

GS has been on a teat since 2024. We are in an extended wave 3 we suspect and based off the positive earnings reaction, we see our next price target zone being the 200-261.8% extension. RSI and MACD are showing sings of exhaustion and bearish divergence, but as we know, price can rip higher despite these lagging signals. We only show this to signal to investors to use caution. Yes, earnings were a home run, we see more runway, but current conditions would be mild-medium risk from a purely technical standpoint. For reference, price is trading 70% above its weekly 200WMA.

The Positive Side: Supportive Risk Appetite🚀

Several core indicators point to a healthy market environment:

• High-Yield Credit Spreads (ICE BofA OAS) sit at 2.69%. This is on the tighter side historically, signaling that investors are comfortable taking on credit risk with relatively low compensation. Tight spreads reflect confidence in corporate balance sheets and overall economic resilience.

• VIX at 17.15 remains in a moderate, non-panic range. The “fear gauge” is not flashing warning signs of broad equity market stress.

• MOVE Index around 77 shows very low volatility in the Treasury market. Bond investors are relatively calm, which removes one major source of systemic pressure.

Taken together, these readings paint a constructive picture: liquidity is ample, fear is subdued, and the market is operating in a risk-on mode. This environment has historically favored equities, particularly those with strong fundamentals.

The Red Flags: Where Caution Is Warranted 🚩

However, not everything is smooth sailing. Several developments deserve close attention:

• Rising 10-Year Treasury Yield (~4.62%): Yields have climbed meaningfully. Higher rates increase borrowing costs across the economy — from mortgages to corporate debt — and raise the discount rate applied to future cash flows. This directly pressures equity valuations, especially in growth and long-duration sectors.

  

• Hyperscaler AI Capex Boom Meets Higher Cost of Capital: Big Tech continues aggressive spending on data centers, power infrastructure, and GPUs. While strategically vital, elevated yields raise financing costs and hurdle rates for these massive, multi-year projects. If returns on this Capex take longer to materialize than expected, we could see digestion periods or pullbacks in the AI supply chain.

• Inflation Data This Week: June CPI drops tomorrow. Any hotter-than-expected print (particularly in core services) could reinforce sticky inflation narratives, push yields higher, and complicate the Fed’s policy moving forward. We suspect investors will be more sensitive due to the looking uncertainty surrounding oil prices.

• Oil Prices (~$78–80): Energy costs are rising again as the conflict in the Middle East continues to heat up. Consumers are already facing some inflationary pressure, but elevated oil prices over a long period of time will make that situation a lot worse.

Conclusion

The combination of tight credit spreads, low VIX, and subdued MOVE suggests the market’s internal health is still solid. However, the rise in long-term yields introduces real tension — especially as it collides with the enormous capital demands of the AI buildout.

Bottom Line: The market continues to show amazing resilience in the midst of pretty wild macroeconomic/geopolitical conditions. For the short-term we do not see any major red flags, but there remain certain things in the background to really keep an eye on moving forward.

S&P500: +0.91% | NASDAQ: +1.08% | DJIA: -0.36% | OIL: $73.78 | BTC: $63,733

Last week the markets were kind of all over the place. In the beginning of the week we got some downward pressure as the War in Iran began to heat up again. Oil prices are now back above $70 and there is more worry and fear in the market that the conflict is far from over and high energy prices may become an issue again. However towards the end of thee week, Trump came out and said Iran wants to make a deal. So we are back to the back and forth rhetoric surrounding the conflict between the US and Iran, but the markets did responded positively to that. Additionally, there were some things happening in the equity markets that were notable. SPCX officially joined the NASDAQ, and META is continuing to expand into the AI ecosystem. They are getting into compute, AI imaging/coding (Muse Spark), and plans to produce its own in house AI chip, Iris. This has reaffirmed that demand is not going anywhere and has brought back bullish momentum to the AI trade.

We titled this weeks newsletters, “Not so fast…” because it appears that the conflict in the Middle East is back in a more substantial way and may be putting pressure back onto the US economy. On the other side of things, hyperscalers are back to signaling that the AI trade is very much alive and continues to be risk-on pushing everything forward.

Market Theory #1: Our Bearish Theory 🔴

Market Theory #1 states that the markets have completed 5 waves up from the October 2022 lows and will not be starting a correction down to our fib levels. The strongest level of confluence is the weekly 200WMA and 0.382 fib level.

Market Theory #2: Our Bullish Theory 🟢

Market Theory #2 states that the markets are currently in wave 3 and will continue to make higher highs and higher lows on its way to its primary wave count price targets.

Daily Price Breakdown

Although price gave us a shallow pullback, we did test fib levels in a 3 wave move. Price has held the daily 50WMA and looks like it wants to make new all-time highs. If we see resistance continuing, then the daily 200WMA (purple) at the 0.382 comes into play. But from a technical standpoint, this appears more bullish. The volume is declining during this flat correction, which tells us it is a corrective structure and not so much impulsive.

Economic Data

Pretty big week for economic data. Tuesday we are getting June inflation data and this is now coming on the heels of rising oil prices. Markets may be more sensitive if we get a hot print. Again, the inflation narrative seems to be the more persistent bear narrative in the markets. So we will be watching this one closely. But remember, stocks tend to perform well in inflationary environments as they tend to protect your capital and people pour money into equity markets. The real bear narrative comes when inflation, mainly energy prices, remain elevated for long periods of time and it really begins to effect the consumer. We already saw PepsiCo blame weak North America performance on inflationary pressures in the US. The other big day is Wednesday as Warsh will testify to Congress and will be faced with some hard questions. Investors want to see how hawkish/dovish he is when facing inflation/macro economic issues.

Market Sentiment

Surprisingly we are at neutral. We think this is a testament and another example of how resilient this market has been and how much they are following earnings and Capex, rather than noisy geopolitical situations.

Closing Comments

Going into this week, it feels like there is a lot of momentum beginning to pick back up. The markets ended the week with the last half showing strength and the Fear and Greed pushing towards Greed even in the midst of ongoing strikes on Iran. The market seems to be signaling that they are focused on the AI trade, Capex, earnings, and growth rather than geopolitical noise, speculative future inflation effects, and increased exposure to debt from hyperscalers. We saw ORCL get their credit degraded as they have continued to push heavily into Capex despite major hits to their FCF. Although this isn’t a major red flag yet, we are seeing more hyperscalers take to the bond market. META and NVDA have both done this and some are beginning to speculate that FCF is going to be entirely engulfed by Capex and that these companies are going to be forced to hit the bond market to keep up with demand. The Capex worry we faced months ago seems to be resurfacing, but as long as big tech is risk-on, we see the markets remaining bullish. Just something to keep in mind and continue to watch for divergences and trends that could effect earnings in the future.

• EPS: $2.20 vs. $2.186 (expected) 🟢

• Revenue: $24.18B vs. $23.95B (expected) 🟢

• Net revenue increased 6.4% (q/q) and 7.3% (Y/Y)

• Operating profit: $4.023B

• Gross profit: $13.11B

• Operating margin: 16.6% (Q2 2025 was 7.9%)

• PepsiCo Food North America (PFNA) revenue: -2%

• PFNA Operating profit and EPS as a percentage change: -3.5%

• For 2026, the Company continues to expect:

  • Organic revenue to increase between 2-4%

  • Core constant currency EPS to increase between 4-6%

  • Capital spending to be below 5% of net revenue

  • A free cash flow conversion ratio of at least 80%

  • Total cash returns to shareholders of approximately $8.9B, comprised of dividends of $7.9B and share repurchases of $1.0B.

Commentary: Earnings, for the most part, came in-line with investor expectations. The stock dropped around 3.5% and is most likely due to the weakness in North America. PepsiCo statement on that is the following:

Interesting that specifically mentioned inflation being the cause of this. Could be a little signal from big time brands that Americans are feeling some pressures, but that is a conversation for another article. If North America sales are down due to inflation, we expect those bottom lines to get back to status quo as inflation comes down. For PEP earnings, we are getting everything we expect from a legacy value stock. They are either meeting, or slightly beating expectations, and reaffirming guidance as well. International metrics are improving, and with increased exposure during World Cup 2026, we see this as something going to be sticky for their growth moving forward. Dividend and share buybacks are healthy, giving value back to shareholders.

Technical Analysis

Price has been in a correction and has fallen to the 0.382-0.5 fib zone where price has tested the monthly 200WMA. Price rarely falls below the 200WMA, and if it does, historically that has not lasted long. Additionally, at these low levels we have seen a steady increase in trading activity which could signal that buyers are taking advantage of lower prices and locking in a solid dividend yield. Speaking of which, the dividend PEP is paying out is 4.03% with a strong track record of increasing. We see as price offering a very strong opportunity for investors to get a solid entry that will likely see some capital appreciation.

Well the beginning of the week brought about a nasty selloff in the semi/memory sector. MU is currently -30% from all-time highs, and other names are getting hit as well. Too many this makes sense and was expect. A lot of names in this sector have exploded well over 100+% YTD and were extremely overbought.

Obviously a lot of talk about a “bubble” has been floating around circles. We disagree that the stock market as a whole is in one. Maybe certain sectors of the markets are in one, and memory and semis may be deflating now as many names are in an “official bear market correction,” but the market as a whole we actually see healthy signs. The biggest green flag in our opinion is the fact that the markets are diversifying.

Above is a chart illustrating that the gains in the market are being spread out to other parts of the market and are no longer concentrated within the Mag 7. This is bullish. This is a good sign. While the Mag 7 is taking a breather, and selling off, other areas of the markets are outperforming and taking the lead. Gains from AI are likely going to continue as we will see bottom line growth, profit margins increase, and guidance revisions for revenue and EPS rise across thee market.

Here is another example of how small caps are outperforming the SP500. Again, this is healthy and showing that gains are being spread across the whole market.

So how does this tie into this week? We see as the semi and memory selloff as being isolated to those specific names, and capital likely to rotate to other names. The 2026 market has been resilient in the face of a lot of adversity, and is staying resilient by rotating out of overbought names and flowing into other areas of the market.

The biggest red flag, however, is the ramp up we are seeing in the Middle East. We seem as far from a peace deal as we did when this conflict first kicked off, and we are now seeing oil prices beginning to rise again. Prolonged elevated energy prices will begin to effect everyday Americans and put inflationary pressures on an already sticky inflation situation. This, to us, is our biggest bear narrative that we see having the potential to grow some legs.

Technical Analysis

The short-term is a little more unclear. The decrease in volume on the little bounce we have seen is likely the hesitation investors are having for a couple of reasons. 1. The memory and semi selloff may be spooking some investors that it will spread to other parts of the market. And 2. The ramp up between the US and Iran again is now putting pressure on oil prices and seems to be an ever ongoing conflict that many do not have an appetite for. With that said, price has still held the daily 50WMA and showed some resilience today. If price breaks down and loses the 50WMA, we see a strong likelihood that price tests the 200WMA and the 0.382 fib level.

S&P 500: +2.33% | NASDAQ: +2.90% | DJIA: +2.12% | OIL: $68.66 | BTC: $63,247

We ended an explosive Q2 and entered Q3 with some big announcements. META and HOOD had some exciting announcements and in the beginning of the week and NVDA announced that they have ventured into the AI compute business. We have seen countless times that compute is in enormous demand, and shows no sign of slowing down. So much so that META is going to begin to sell AI cloud compute and is making a massive bet for demand remaining high. MU is providing capital for Trump accounts and the President has tweeted a few times about MU and its amazing business. PLTR hit a very key retracement level at the same time Alex Karp was on CNBC defending the nature of his companies business and the need for an application layer on these AI models. Could be softwares unsung hero in the next couple of weeks if PLTR is able to push to higher prices. Tons of news and momentum is behind the AI ecosystem while credit spreads remain narrow. We see bullish tailwinds for risk-on, especially if crypto joins the party. The only bear narrative we currently see present is the ongoing Iran War and sticky inflation. We titled this weeks Market Pulse, “Time to Keep Going?” because it seems like the bulls are ready to take prices higher and the hyperscalers continue to push the AI narrative forward.

Market Theory #1: Our Bearish Wave Count 🔴

Market Theory #1 states that the markets have completed 5 waves up and have now entered their primary ABC correction. For this correction, the bears would be targeting the 0.382 fib level which aligns with the weekly 200WMA. If the bears end up being weaker than anticipated, then the 0.236 fib level would be the shallowest pullback for this correction.

Market Theory #2: Our Bullish Theory 🟢

Market Theory #2 states that the markets have completed its primary wave 1 and 2 structures and are currently in primary wave 3. The markets do not move in straight lines, so this theory is merely stating that the markets will continue to make higher highs and higher lows on its way to these price targets.

Short-Term Market Breakdown

For the last few weeks, and even months, we have been calling for a pullback. Now, we have gotten one, however, it has been weaker than we have expected. There is still a chance we go lower, however the charts are turning bullish on the daily timeframe. Price has pulled back to the 0.236-0.382 zone, which is a valid retracement zone (although it is very shallow). Price has recaptured the daily 50WMA, RSI is showing bullish divergence, and the MACD looks like it wants to flash a bullish crossover. This would align with market theory #2 as this shallow pullback signals that the markets are stronger than expected.

Economic Data

Market Sentiment

The markets have bounced out of extreme fear and are making their way towards neutral. This trend would align with what we are seeing on the charts in the technicals on the daily chart and would signal that market theory #2 may be at play.

Closing Comments

Short-term technicals and the bullish momentum in the AI ecosystem tells us that we should see all-time highs this week. META and NVDA both signaling that AI compute is in massive demand and credit spreads remain very tight. With so many sectors within the AI ecosystem, we see a strong case for rotation within the sector which keeps pumping the stock market. Once memory and semis get overbought, money may rotate to either data centers, back into hyperscalers, or just the broad market. We feel like this market has been all about rotation. From hyperscalers to semis, to memory, to data centers, and now health has been catching a bid. The tailwinds from AI will reach across all the market and it is incredibly difficult to price that in, and even more so to know when the music will stop.

With Q2 behind us, we started Q3 off with a bang. We had some big announcements from HOOD and META, and still have an ongoing war with sticky inflation. RobinHood had their Flat Earth announcements that once again proved their aggressive expansion and constant growth mentality. Big emphasis on crypto expansion, AI agentic trading, and international growth. The other big announcement was Zuck announcing that META will sell AI cloud compute. We see this as long-term bullish for the sector and view it as META making a bet that cloud compute is going to continue to be in massive demand.

On the other side of things, we have the Iran War ongoing and seemingly further from a peace deal than we once believed. Inflation is sticky and maintaining its pressure on the US economy which we believe is keeping the bears close by. The markets, however, are continuing to follow earnings and growth, with prices just 2% shy of all-time highs. Credit spreads remain narrow and tight, and we still see the markets as risk-on and ready to push higher.

Technical Analysis

Although we still see room to the downside own our daily chart, price has recaptured the daily 50WMA and looks like it wants to push higher. The bullish announcements coming out, especially META selling cloud compute, may be the catalyst for the correction to be complete. The market internals seem to show that sellers are no longer in complete control and that buyers are very much present. However, if price gets more bearish, we expect the daily 200WMA (purple) to come in and act as support. As always, we will be monitoring the market and watching these key levels.