“Are we going to get just the right amount of reflation, in just the right product/services categories where there remains the right amount of pricing power and the right amount of consumption slack to further fuel the right amount of accelerating earnings power?
Good outcomes are more frequent than bad outcomes!”
– Seth Golden, Chief Market Strategist at FinomGroup.com (Premium Members Only)
Mid-week Summary
Wednesday, July 23rd, 2025
Welcome to Market Mania!
Where the only thing more relentless than the headlines is the market’s ability to surprise.
As earnings season enters its most important stretch, corporate results are front and center. Investors are looking past political distractions and turning their focus to fundamentals. With major reports scheduled from MAG 7 names like Tesla (TSLA) and Alphabet (GOOGL), and several key industrial and semiconductor names, the price action thru the end of July will undoubtedly shape sentiment for the rest of the quarter. So far, early results have been underwhelming, with banks and select consumer companies struggling to bring back animal spirits. The question now is whether big tech can deliver the earnings strength needed to keep the broader market trending toward new highs.
The S&P 500 remains elevated after a strong run but is beginning to stall. Leadership rotation continues inside the index. Former high-fliers in the semiconductor (SMH) space have pulled back slightly, while defensives like health care (XLV) and consumer staples (XLP) are catching investor attention. This shift in positioning reflects growing caution, especially as the market moves into a seasonally weaker period. Quick reminder that FUND FLOWS ARE SCHEDULED, hence predetermined. The Fundamentals drive the long term trend. Technicals create the volatility within that long term trend. Seasonals aren’t really a thing. Per Seth, “The fund flows are going to flow. It’s just a matter of when and to what degree.” July has historically delivered strong performance, but as investors approach August and September, the pattern often turns more volatile.
Still, nothing about 2025 has followed a simple script. The resilience in equity prices this year has consistently surprised the consensus. Since the April low, the S&P 500 has rallied more than 25 percent with very few interruptions. The largest pullback since then was only about two and a half percent, and market breadth has remained surprisingly healthy despite concerns over narrow leadership. The index has now closed above its 20-day moving average for 59+ sessions in a row, a rare technical signal that has historically been followed by positive forward returns 100% of the time 3 months later, per @SubuTrade.
Economic data has added further support beneath the price action. Retail sales continue to outpace inflation on a real basis, and weekly jobless claims have dropped back to levels last seen in early spring. Consumer strength remains a defining feature of the expansion, and while inflation has shown signs of reaccelerating in certain categories, most notably utilities (XLU) and core services, overall pricing pressures still appear manageable. The Federal Reserve’s reaction function remains uncertain, especially in a politically charged environment, but so far the data has bought policymakers some time ahead of Jackson’s Hole in August.
Investor positioning also reflects this cautious optimism. Flows have been rotating toward quality and defensive sectors, while hedge funds have moved back to a net short stance in index futures. Meanwhile, historical studies and cyclical analogs, including comparisons to July in 1997 and 2014, suggest that the remainder of the year could see continued gains even if progress slows in the near term. Past cycles with similar policy and earnings dynamics produced shallow drawdowns followed by strong fourth quarter rallies.
Looking ahead, the market faces its next big test in the form of mega-cap tech earnings. These companies have driven much of the index’s performance in 2025. Strong results and steady guidance would reinforce the broader uptrend, while any disappointment could heighten volatility and further complicate an already fragile leadership picture. Investors are watching closely for commentary around margins, capital spending, and demand across both enterprise and consumer channels.
Disciplined investors are now being asked to weigh the possibility of short-term weakness against data that continues to support longer-term strength. With breadth improving, just the right amount of reflation, and no sharp deterioration in growth or employment, the most likely scenario remains one of continued rotation within a rising market.
Pullbacks should be expected, NOT feared, as they present opportunity for those sticking to process rather than chasing headlines.
As we move into the heart of earnings season and closer to the seasonal inflection point that typically defines the latter half of summer, the balance between caution and conviction becomes more important than ever. Successful positioning in this environment will mean respecting the data, adjusting incrementally, and remaining ready to respond when clarity returns.
How Low Volatility Streaks End Matter!
Difference in S&P 500 performance is eye-popping when separating past S&P 500 low volatility streaks (closing w/<+/- 1%) since 1950. Streaks that ended w/ a gain were bullish, those that ended w/ a loss were bearish. https://t.co/mVYOjGrIyd pic.twitter.com/PjQsA20Beu— Jeffrey A. Hirsch (@AlmanacTrader) July 22, 2025
In addition, the end of a long low-volatility streak in the S&P 500 offers important insight into what might come next. According to the above data from Jeff Hirsch since 1950, among 175 historical instances of low-volatility stretches, nearly 62 percent ended with the S&P 500 declining one percent or more. This tendency explains why an absence of 1% intraday moves are more often than not, followed by weakness (sounds like a coin worth flipping to me…😉). Might I add, how the streak concludes matters greatly. When these streaks end on an up day, the market overwhelmingly tends to continue higher with an 85 percent chance of double-digit (median) gains one year later. Conversely, if a low-volatility streak ends with a decline, the probability of continued softness increases notably at only 20% positivity rate and NEGATIVE double digit (median) fwd returns. Signal trigger date/closing price is anyones guess!
This nuanced view underscores that the market’s immediate path will depend heavily on the direction of the next significant move. I know right? 🥱 More boring, “data dependent” jargon alike that of “Our Honor, Jerome Powell”. No one likes to hear these things… BUT these systems have survived functioning this way for a reason, hence maybe so should you! React, don’t predict. A definitive upward break would align with historical patterns of continued strength and strong forward returns, while a downside break would invite increased caution and likely elevated volatility. With this in mind, Finom Group is raising our year-end target for the S&P 500 to 6,475 based on the current blend of earnings strength, technical confirmation, cyclical trends, and improving breadth. While the road ahead may include pockets of volatility, the broader setup remains supportive of a continuation in the primary trend. And remember, sometimes the best and hardest thing to do is absolutely nothing but stick to your game plan, per Michael Antonelli.
Let’s dive into this week’s full report and unpack the data, the risks, and the opportunities that lie ahead.
Market Mania is your daily digest of the most actionable insights you won’t find in your usual scroll—curated from and for thousands of market pros, asset managers, RIAs, and expert investors. We dig through the noise to bring you the best charts, articles, and ideas shared across the web each week.
TLDR: We hunt, you read, you decide 🤝
Here’s what’s catching the eye of the sharpest minds in the market today!
Chart(s) of the Week
🏆 Today’s Chart of the Week was shared by Seth Golden (@SethCL):
On average, there are only 17 negative return weeks in a Calendar Year.
Getting closer to the cluster of down weeks between 30th and 40th weeks of the year.
Kind of puts into perspective the definition of an uptrend, validating market travel higher over time.$SPX $ES_F $SPY… pic.twitter.com/V4kkqOFkC3
— Seth Golden (@SethCL) July 20, 2025
The market moves in rhythm, and right now it is pausing to catch its breath. Historically, the S&P 500 sees only about 17 negative return weeks each year. That means nearly 75 percent of weeks end higher, a simple but powerful reminder that long-term uptrends are defined by steady participation, not constant acceleration.
As we move through late July, we are entering a stretch that often produces softer returns. Weeks 36 through 39 have historically carried more downside, driven by seasonal factors like lighter volume, fund rebalancing, and the digestion of earnings. This is not a red flag 🚩. It is part of the natural cycle. Healthy markets need time to consolidate before they can push higher. These periods clear the way for the typical strength we see in the fourth quarter.
This is where discipline matters. Buy and hold remains the best performing strategy over time. Tactical strategies, like the 1% for 1% BOLT-ON, can help lower your cost average via compounding, but are only an accessory to a long-term approach, not a replacement. On the other hand, hedging strategies will often offer more harm than reward, especially when volatility is low and the trend is strong. Buying protection because it feels responsible can be costly when it cuts into upside and delays re-entry. Even when hedges work, they often breed bad habits. One lucky trade can reinforce a mindset that ends up sidelining you from more meaningful gains.
As weird as it may seem, new highs are NOT warning signs. They are confirmation of trend strength. The idea that markets must fall after printing records has no consistent basis in data. Leadership from large cap tech, growth sectors, and semiconductors continues to drive returns. A low volatility index does not mean risk is rising. More often, it signals healthy momentum beneath the surface and increasing S&P%500 annualized returns of roughly 47%+.
Short-term fluctuations are inherent in the investment process and should not be regarded as causes for alarm 🚨. The true risk lies in failing to maintain an investment position in high-quality ETFs and investing a sufficient amount. My primary objective is to achieve “enough” exposure, and I diligently strive (day in/day out) to avoid detrimental, low hanging, stock-picking strategies that might deter from any future outperformance. Yes we are all human! (I’ve bought TLT too…)
I frequently remind myself of my fundamental responsibility as an investor, which is often overlooked: #1: deploy your funds effectively! A prudent investor manages drawdowns by appropriately sizing positions rather than attempting to forecast the market’s peak. Allow time and compounding to work their magic while you concentrate on the process and cultivate patience.
How likely is a mkt corrections from all-time highs? Chart below shows how often $SPX has corrected greater than -10% over various periods of time, following each of the ~1,270+ all-time highs since 1950.
In other words, SPX rarely retests former lows or anything close to it… pic.twitter.com/a36Y5z5cAO
— Seth Golden (@SethCL) July 22, 2025
The trend remains intact. The market is simply pausing to reset. Stay focused, stay invested, and stay with the rhythm. 🥁 💯
Quote(s) of The Week
A little bit of this, a little bit of that!
Save like a pessimist and invest like an optimist.
— Morgan Housel (@morganhousel) July 19, 2025
Top 10 Tweets of The Week
“Healthiest bull market in my 25 years of investing.
10-day Put/Call Ratio informs how stupid risk-taking behavior was 2020-2021. That resolved by way of a nasty 11-month bear market, rectified P/C. While $SPX has rallied 70% since, risk taking behavior has normalized.” – SG
2021 vibes: Calls are almost 70% of the total market volume … hasn’t been this high since the 2021 meme days, Goldman's Garrett warns. pic.twitter.com/pqTGoTkeKA
— Holger Zschaepitz (@Schuldensuehner) July 21, 2025
Those shelves still empty bro?
Torsten Sløk of Apollo:
"Looking ahead, with Section 899 behind us and the trade war likely to be resolved within the next couple of weeks, the US dollar is expected to appreciate again." pic.twitter.com/ZrLSdTNkgu
— Kevin Gordon (@KevRGordon) July 22, 2025
Fun Fact: Vanguard owns nearly 8% of all MSTR stock…
“Bitcoin is not appropriate for long term investors.” — @Vanguard_Group
“We’re the largest shareholder of $MSTR, which has $75B worth of Bitcoin on its balance sheet.” — @Vanguard_Group pic.twitter.com/dMNiZ08ymQ
— ◢ J◎e McCann 🧊 (@joemccann) July 14, 2025
Time on the clock, you have?
Small caps are 20.5% cheaper than large caps on price-earnings ratio. The years that witnessed this discount are 1973, 1976, 1998, 2001 and 2020. Even investors who were early in 1973 and 1998 would have then witnessed two legendary small cap cycles: 1974-1981 and 1999-2018. pic.twitter.com/2VsOmw7Y70
— Jeff Weniger (@JeffWeniger) July 22, 2025
Why h0ld cash when you can hodl $BTC (sarcasm),…
cash has become trash…I am ok holding more thana that in my degenerate economy index at the moment
It pays 4 percent so it really is an asset right now so don't ignore it
with stablecoins likely ensuring the longevity of the dollar https://t.co/oMUt7Qc7Te
— Howard Lindzon (@howardlindzon) July 20, 2025
Just a matter of time?
Both Health Care and Technology weights in the S&P 500 are currently the most extreme since March 2000. pic.twitter.com/caJFf7HtFB
— Rob Anderson (@_rob_anderson) July 17, 2025
Might be a good time to start shopping for homes on Zillow… THIS IS NOT MY QUANT!
Do Not buy a house.
Unless you are a millionaire.
Rent for now.
Wait for a 2008 type market crash to buy your first house.
Understand?
— atlas (quant) (@Atlasx100) July 20, 2025
5th time must be the charm right? Event-u-alysis = OPPORTUNITY COST.
Chinese equities are on the verge of completing a textbook bearish-to-bullish reversal. pic.twitter.com/ogt8rIiaR3
— Alfonso De Pablos, CMT (@AlfCharts) July 19, 2025
Fresh Money Buy List still carries the old-bear sentiment/positioning and woeful underperformance. Finally caught religion, but!
– Seth Marcus
Morgan Stanley’s Mike Wilson, not long ago one of Wall Street’s most steadfast bears, says he sees a bull market building in stocks.https://t.co/p5ijRUrfTG
— Alexandra Semenova (@alexandraandnyc) July 17, 2025
MS' Mike Wilson earlier in the week was out with a bullish note saying he sees a bull market building, although he thinks we'll see a 5-10% drop in 3Q as the impact of President Donald Trump’s trade policies gets reflected on corporate balance sheets. He thinks the decline will… pic.twitter.com/llEKmIlkpU
— Neil Sethi (@neilksethi) July 19, 2025
Bookmarked, yet? (If you think this is a bearish post, let me go ahead and tell you its NOT)… 🙂
At some point, we're all going to remember this chart as a "sign". 🚨
Like valuations, divergences are not timing tools, and this one has been in place since May.
Performance ratios are more about leadership than up vs. down indices.$SPX $SPY $QQQ $NDX $COMPQ $TQQQ $VOO $NYA pic.twitter.com/aTxI2rEkN3
— Seth Golden (@SethCL) July 20, 2025
Join the Finom Group Family – CLICK HERE to Upgrade Now!
Master the markets with Seth Golden and our “Finominals” community! For just $24.99/month, unlock weekly 5000+ word macro research reports packed with charts and actionable insights. Go Premium at $79.99/month for daily Telegram Traders Corner, myth-busting Zoom sessions, and live 1%+ scalp/swing trading with Seth. Don’t let market noise win—join our Contributor or Premium Membership to build confidence and achieve your financial goals.
[Click here for a free Morning Market Setup sample from July 22nd 2025!]
Finom Group – Recent Reports
July 20, 2025
July 13, 2025
July 6, 2025
July 3, 2025
June 29, 2025
You’re all caught up now. Thanks for reading!
If you have any questions, feel free to message Seth Golden or contact us support@finomgroup.com
Comment below or tag us on X (@FinXWeekly) with your thoughts—your feedback drives our innovation.
