After the SPX High, QQQ Is the Real Test 20260804
US Stocks · Options · News · Views
The market has strengthened, but confirmation is still missing
The S&P 500 needed only five trading days to climb from a one-month low to a record closing high. In the same week, sentiment flipped from fear to FOMO.
The repair has a clear foundation. Oil prices fell, long-term Treasury yields declined for a second day, and the valuation pressure on growth stocks eased. June JOLTS job openings fell to 7.359 million, but the labour market remains stable. That leaves inflation as the Federal Reserve's main near-term concern.
SPX has already broken out, but QQQ is still the key confirmation for technology stocks. It closed at $723.80, just below the $724 trigger. A clean move above $724 after the open would encourage investors to treat this rally as trend continuation rather than a temporary recovery. Another rejection could bring back volatile, high-level consolidation.
AMD delivered a solid quarter, but not enough to excite the market
AMD reported second-quarter revenue of $11.54 billion, slightly ahead of expectations. Adjusted EPS came in at $1.66, also above consensus. Data-centre revenue grew 107% year over year to $6.72 billion, making it the strongest part of the report.
The problem is that investors are no longer rewarding growth without examining its cost. Capital expenditure reached $808 million, almost three times the expected level. Free cash flow consequently missed expectations by roughly 20%. The client and gaming segment grew, but its operating margin fell from 21% to 15%.
That combination explains why the shares rallied before earnings and then gave the move back. AMD's long-term growth thesis remains intact, but the next leg higher requires evidence that elevated investment will convert into stronger profits and cash flow.
The first support area is $461 to $476. A stronger support zone sits at $442 to $453. If the broader market stays firm, buyers may defend the first range. If the indexes weaken, the second range offers a better margin of safety. The $366 area remains the major long-term support and a useful thesis boundary.
NVDA looks cheaper than AMD, and $216 is the momentum switch
The most attractive part of the NVDA setup is the combination of growth, valuation, and price. Its growth rate is slowing as the company becomes larger, but its forward valuation is still more favourable than AMD's, leaving more potential upside in the current setup.
Technically, $216 is the immediate momentum switch. A decisive break and hold above that level would suggest that the post-earnings volatility has not damaged the trend. It would also increase the probability of a quick move toward a new high. A drop back below $216 would show that short-term buyers are still hesitant.
This is a better confirmation trade than a prediction trade. Following a verified breakout is more reliable than guessing beneath resistance.
Semiconductors have not fully reversed
Semiconductors remain one of the most divided areas of the market. For SOXX, $580 is the critical level. It is both a heavy supply zone and the dividing line between the previous downtrend structure and a renewed uptrend.
Failure to clear $580 would leave the group vulnerable, especially after AMD's post-market weakness. A sustained move above $580 would confirm a genuine reversal and shift attention to the next resistance area between $595 and $615.
MU must first break above $969 to confirm that its decline has ended. It would then need to clear the $1,033 to $1,093 range before the market can seriously price another run at the highs.
For SNDK, the first recovery zone is $1,050 to $1,162. A true reversal requires a break above $1,326 to $1,467. Until those levels are cleared, storage stocks should be treated as high-volatility rebounds rather than established uptrends.
Software is recovering, but $107 still matters
IGV has reached the $101 to $107 target area, confirming that software stocks are recovering. That move is constructive, but it is still a rebound rather than a confirmed reversal.
The decisive level is $107. A valid open or close above it would signal that software is moving from the top of a range into a new trend. At that point, follow-through from names such as CRM, ORCL, and INTU would become more meaningful.
Another rejection near $107 would keep the current move in the category of a recovery inside a broader range.
SPCX faces a supply problem, not an earnings problem
The SPCX earnings report was respectable. Revenue beat expectations, operating losses narrowed, Starlink continued to grow, and the company retained a substantial cash position.
The more immediate risk is the first lock-up expiration on August 6. Roughly 911.5 million shares become eligible for sale, almost twice the current public float. Eligibility does not mean every holder will sell, but the market still has to absorb the possibility of a sharp increase in available supply.
The key signals after the expiration will be volume, buyer absorption, and price stability. Until the ownership structure settles, technical patterns have limited reliability.
The trade is about confirmation, not prediction
The broad market has clearly improved, but several important groups remain one step short of confirmation.
Watch QQQ at $724, NVDA at $216, SOXX at $580, and IGV at $107. Together, these levels represent the trend switches for the Nasdaq, the leading AI stock, semiconductors, and software.
The better approach is not to front-run resistance. Wait for price and capital flows to confirm that buyers are willing to keep pushing. If these levels hold after breakouts, the rally can broaden beyond the indexes into more growth stocks. If they repeatedly fail, reduce the urge to chase and wait for support.
The market has moved from fear to excitement. The next gains will not belong to whoever is most optimistic. They will belong to whoever still follows a plan.