July Wrap-Up: After 4-Month Gains, Will August Fall into Which Scenario?

Tiger_comments
07-31
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As July trading officially comes to a close, U.S. stocks delivered a solid "summer report card": $NASDAQ(.IXIC)$ rose for a fourth consecutive month, gaining 3.70% in July. $S&P 500(.SPX)$ climbed 2.17%. Market sentiment remains supported by crypto strength and AI-driven optimism.

🗓 A Look at Historical Trends: August Isn’t Bearish, but Volatility Tends to Rise

When July ended with gains, August followed with gains 14 times — a 70% probability.

However, August is also one of the most volatile months seasonally, especially in post-election years, where the first eight trading days tend to be weak.

⚠️ But it’s September that truly earns the “danger month” title:

In the past 24 years, 15 Septembers ended in decline. August often acts as the starting point for risk-off behavior.

Tom Lee noted: “When July performs strongly, August often sees short-term pullbacks.”

⚠️ A Pullback Isn't Necessarily a Bad Thing: But Are You Ready?

Several potential risks remain on the radar:

August 1: Some U.S. tariffs take effect, potentially disrupting markets.

Uncertainty around tariff policy, a Federal Reserve on hold, and elevated S&P 500 valuations may trigger a pullback. Seasonal weakness in August and September could amplify single-day volatility.

SPY seasonality chart

💬 From an Investor’s Perspective, Now Is a Critical Juncture

Here are some data points to consider (2000–2024):

Total Green August = 15; Total Red August = 10

1. If the July was green, August was green 14 times.

2. If the July was green, August was Red 6 times.

September on the other hand was Red 15 times.

2025 will either follow Scenario 1 or 2 — What’s your guess?

Questions for You:

  • Do you think August 2025 will continue the rally or start a correction? Why?

  • If the market corrects by 10%, will you buy more, hold, or reduce exposure?

  • Which sectors or ETFs are on your August watchlist or potential dip-buy list?

  • Can you tolerate a 10–20% drawdown in the next month?

  • Or would it be wiser to lock in gains and wait for the next buying opportunity?

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SeptemBEAR is here: Are Your Portfolio Ready for Volatility?
In September, the VIX may fly as we may see September Effect hit again. ------- 1. Is the market in danger with September effect approaching? 2. What's your strategy to cope with risks?
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Comments

  • Shyon
    08-01
    Shyon
    I think August 2025 may see some short-term pullbacks after July’s strong rally, but I don't expect a sharp correction yet. AI optimism and crypto momentum are still supportive, and history shows a 70% chance that August ends green after a strong July. That said, volatility tends to rise in August, especially in post-election years, so I’ll stay cautious. I’ll also be watching closely how markets react to the new tariffs taking effect on August 1.

    If the market drops 10%, I’d likely buy more — especially in sectors like SOXL, tech ETFs like QQQ. A 10–20% dip doesn’t bother me if fundamentals remain strong. I use dollar-cost averaging and see pullbacks as long-term opportunities. It's all about staying focused on the bigger picture, not reacting to short-term noise.

    I won’t lock in profits just yet, but I’m watching for signs of weakness in September. If needed, I might trim exposure and keep some cash ready. For now, I stay invested but prepared.

    @Tiger_comments @TigerStars

  • 1PC
    07-31
    1PC
    August will be the month for Corrections 😁 as there is a Chinese saying of 七上👆八下👇 [Chuckle] [Chuckle] [Chuckle]. Must follow the rhythm 🪘.  On the other hand, Markets have Risen to an extreme, so be prepared for a correction 😉. @JC888 @Barcode @yourcelesttyy @koolgal @Shyon @Shernice軒嬣 2000
    • Shyon: 
      Thanks for sharing
  • Star in the Sky
    07-31
    Star in the Sky
    Aug should be a month of more drips than raising. I intend to buy some REITs when dip happens.
    The stock markets need to return to the normal trends. Most of the markets have rocketed up for months especially US markets.
    Just like a balloon, if we continue inflating it, it will eventually burst.
    Burst or deflated, the damage is very  much different.
    So, currently I choose to unlock profits and accumulate my cash.
  • WanEH
    08-08
    WanEH
    我觉得8月开始，市场会开始回调。毕竟之前已经上涨太多了。而且特朗普的关税反复无常，造成市场动荡不安。投资者信心不佳。 @Tiramisu2020
  • BTS
    08-04
    BTS
    After 4-Months Gains, the market may see a mild correction or sideways consolidation in August

    A 10% market pullback is likely to be a buying opportunity, as long as there are no major signs of economic deterioration

    Sectors such as semiconductors, energy, cybersecurity, and dividend-focused ETFs are worth monitoring for potential opportunities

    Locking in some gains is a wise move and a prudent strategy amid potential market dips。。。
    Tag :
    @Huat99

  • Peter Soon
    08-03
    Peter Soon
    Potentially we will see a pull back in August and correction in September as market valuation has been over extended. If market corrects by 10%, I will add position especially on semiconductors/ technology sectors. I can tolerate a 10-20% drawdown in the next month and buy the dip as market still in long term uptrend. Of course, it would be always wiser to lock in some profits and wait for next buying opportunity.
    @Jinleong @Pang Kiat , what's your thoughts?
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