Optioneering Team Market Update July 31, 2026

Market Rebound Signals Potential Momentum Flush Bottom

Thursday’s session brought a powerful and welcome surge off the recent lows, providing a strong bid to a market that had been weathering intense downside pressure. This aggressive rebound was fueled by impressive earnings from mega-cap tech heavyweights—notably Microsoft—and, even more importantly, what appears to be a classic capitulation event in the momentum unwind. The relentless forced selling that plagued top AI and momentum leaders reached a crescendo mid-week following reports that a heavily leveraged, high-profile AI-focused hedge fund faced massive margin calls and was forced to liquidate its portfolio. This forced liquidation acted as a major purging event, lifting the suffocating mechanical supply off the market. This structural clearing may very well mark the definitive bottom for the momentum flush, allowing many of the hardest-hit names to finally establish a firm floor.

Thanks to Thursday’s decisive push higher, the tech-heavy Nasdaq 100 has officially pulled back out of correction territory, making the weekly close crucially important to see if buyers can sustain this momentum. Despite the turbulent price action over the past month, the foundational structure of the headline S&P 500 remains completely intact. Crucial downside support levels continue to hold firm, keeping the benchmark neatly bound within its multi-month consolidation range. With the recent low-end test successfully defended, the S&P 500 is now turning back toward the upper boundary of its range to potentially challenge overhead resistance once again.

Underneath the surface, the broader market continues to display remarkable internal health. The S&P 500 Advance/Decline line maintains its upward trajectory of higher highs and higher lows, while approximately 70% of index constituents hold firm in long-term uptrends. The capital rotating out of the tech unwind hasn’t abandoned equities—it has actively expanded market breadth. This dynamic was highlighted earlier in the week when the Equal Weight S&P 500 notched a new all-time high even as cap-weighted indexes struggled. While tech works through chart repair, focusing on the Equal Weight index alongside market-leading sectors like Healthcare, Financials, and select Energy names remains the premier tactical strategy as this bull market continues to broaden out.

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Optioneering Team Market Update July 31, 2026