Bullish Momentum - But Mind the Gaps

As of the end of the trading week on Friday, August 7, 2026, 88% of the companies listed in the $S&P 500(.SPX)$ have officially posted their actual earnings results for the second-quarter corporate reporting cycle.

Overall, the corporate reporting cycle has exceeded Wall Street’s original expectations, driving the index to its broadest and highest profit expansion in several years considering:

• 86% of reporting companies have beaten their consensus Earnings Per Share (EPS) estimates. This is well above the historical 5-year average of 78% and the 10-year average of 76%.

• Approximately 77% of S&P 500 companies have exceeded their revenue expectations. All 11 sectors of the S&P 500 are concurrently reporting positive revenue growth for the quarter.

• The blended year-over-year earnings growth rate for the S&P 500 (SPX) stands at 50.4%. If this holds, it will mark the single highest earnings growth rate reported by the index since Q2 2021.

• The blended revenue growth rate, currently marks a 14.1% year-over-year, marking a substantial top-line expansion for major U.S. firms.

While corporate fundamentals are performing exceptionally well (and that’s a major bullish factor for the SPX), the global macro and geopolitical context introduces complex undercurrents.

Macro

The July jobs data delivered an unexpected contraction, with non-farm payrolls dropping by 23,000 jobs (missing expectations for an 83,000 gain) and the unemployment rate ticking down to 4.1%.

While a drop in hiring looks weak superficially, equity markets translated this as a buffer against further monetary tightening, fed funds futures priced the probability of a September rate hike down to 44% (from 55%), giving the market near-term breathing room and fueling the bullish action on Friday.

Geopolitics

Since war broke out in late February, energy shipping transit via the Strait of Hormuz (which normally moves 20% of global oil) has faced major disruptions.

This week, oil markets experienced volatile swings over an Oman-brokered diplomatic layout. CL=F fell -11% this week closing at $77 after a published Iranian draft bill proposed taxing transit and banning U.S. and Israeli vessels from entering the channel.

With all that said, investing and trading rarely present the perfect environment. If you wait for a solid corporate context like the one we have now, with inflation, jobs, consumer sentiment, GDP, and other macro factors favoring the market, and geopolitics entirely peaceful and cooperative, you may find yourself waiting a very long time (if not forever), out of the market or always managing to find a factor to expect a decline.

For that reason, my focus remains on price action analyzed through technical indicators, always keeping the fundamentals behind the charts in mind. By setting targets and risk management with modeled support and resistance levels (proven over more than two years of this publication to be zones where institutional algorithms react) we navigate the markets with discipline and clarity about the context.

Here are the high probability setups that played out this week:

• $Palantir Technologies Inc.(PLTR)$ : Triggered a bullish reversal by recovering the 124 central weekly level 🎯, exceeding its target by far with a 39% weekly move.

• $Tesla Motors(TSLA)$ : Executed a bullish reversal, hitting the 328 extended target for a +5.4% weekly gain 🎯.

• $Meta Platforms, Inc.(META)$ : Bounced off a recovery of 564. While noted transparently that the +8% target of 603 might take more than a single week, the stock still rallied +6.3% 🎯.

• $Alphabet(GOOG)$ : Bullish setup to hit the 381 extended target (+6.9%) 🎯. Before a precise reversal from that modeled zone.

• $SPDR Gold ETF(GLD)$ : Remained bullish as anticipated, surpassing the 388 target for a +7.3% weekly gain 🎯.

• $Microsoft(MSFT)$ : Reached its 491 bullish target for a secure +5.8% move 🎯.

• $SpaceX(SPCX)$ : Highlighted in Thursday’s daily post to paid subscribers with a successful bullish setup above 111 and providing a complete set of levels to trail stops for the eventual bullish move that indeed happened 🎯.

That is 7 high-probability setups successfully playing out. Trading is never about perfection, of course; this week also included a bearish setup for $Apple(AAPL)$ that remains in progress and has not yet reached its target.