Public Kempax report
Daily After Market report · 2026-07-29
Kempax Research
Loop report · 2026-07-29
Daily After-Market Report — July 29, 2026
Summary
US equities closed sharply lower on Wednesday, July 29, 2026, extending a broad risk-off rotation led by an accelerating technology and AI-sector sell-off. All three major indices finished in the red. The S&P 500 $SPY broke below key support at 735.21 on elevated volume. The Nasdaq-100 $QQQ plunged over 2% to a fresh 30-day low with deeply oversold momentum readings. The Dow Jones $DIA shed more than 2% with volume 80% above its 20-day average. Capital continued to rotate from growth and technology into energy, financials, and defensive sectors — a spread of nearly 20 percentage points separates the best- and worst-performing sectors for the month.
---
Major Index Performance
Index Close Jul 29 Daily Change Monthly Change from Jun 29 30-Day Range ------- --------------- ------------- ---------------------------- -------------- $SPY 729.46 −1.54% −1.56% 729.10 – 755.58 $QQQ 661.73 −2.04% −8.61% 661.14 – 737.62 $DIA 515.41 −2.18% −1.20% 514.82 – 532.54
$QQQ bore the heaviest selling pressure, closing the month down over 8.6% and recording a new 30-day low at 661.14. $SPY and $DIA held up better on a monthly basis but both sustained above-average selling pressure with volume well above their 20-day averages. All three indices closed below their short- and medium-term moving averages, signaling broad technical deterioration.
---
Sector Rotation — Out of Growth, Into Value and Defensives
Sector ETF Jun 29 Close Jul 29 Close Monthly Change Direction -------- ----- ------------- ------------- --------------- ----------- Energy $XLE 53.58 58.65 +9.46% ▲ Outperforming Financials $XLF 53.72 56.68 +5.51% ▲ Outperforming Consumer Staples $XLP 84.37 87.36 +3.54% ▲ Defensive bid Health Care $XLV 160.74 166.24 +3.42% ▲ Defensive bid Materials $XLB 50.66 51.74 +2.13% ▲ Mild Utilities $XLU 46.02 44.91 −2.41% ▼ Industrials $XLI 182.76 176.66 −3.34% ▼ Consumer Discretionary $XLY 117.12 111.61 −4.70% ▼ Cyclical selling Technology $XLK 185.41 166.57 −10.16% ▼▼ Deep sell-off
The sector dispersion for July is extreme: a 19.6 percentage point spread between Energy $XLE, +9.46% and Technology $XLK, −10.16% . This is a textbook risk-off rotation — capital is fleeing growth and technology names and flowing into energy, financials, and defensive staples and healthcare. Cyclical selling is also spreading, with Consumer Discretionary −4.70% and Industrials −3.34% both negative on the month.
---
Key Trends
1. AI Tech Sell-Off Accelerates — $QQQ Deeply Oversold
- $QQQ closed at 661.73, down 8.61% for the month and at a new 30-day low.
- RSI 14 at 21.82 — deeply oversold, the lowest reading in the trailing window.
- $QQQ trades 6.0% below its 20-day simple moving average 704.33 and 4.2% below its 10-day SMA 690.72 .
- $XLK Technology sector lost 10.16% for the month — the worst sector by a wide margin.
- External market commentary points to AI-chip valuation concerns driving the July 2026 sell-off.
- Oversold conditions can persist in a trend; no reversal signal has formed yet.
2. $SPY Support Breakdown with Volume Confirmation
- $SPY closed at 729.46, breaching identified support at 735.21 a level with multiple prior swing touches .
- Volume surged to 67.3 million shares, 44% above the 20-day average of 46.6 million — a high-volume breakdown.
- The session opened with a gap down of approximately 0.12%.
- RSI 14 dropped to 30.74, approaching the oversold threshold 30 .
- $SPY closed below both its 10-day SMA 741.83 and 20-day SMA 745.79 , with both averages now rolling over.
- ATR 14 expanded to 7.69, reflecting rising realized volatility of 10.6% annualized.
- The market structure shows a textbook downtrend: lower highs 755.58 → 750.02 → 745.53 and lower lows 740.03 → 739.51 → 740.80 → 735.21 → 729.10 .
3. Energy Leads — $XLE Surges with +9.46% Monthly Gain
- $XLE rallied from 53.58 to 58.65 +9.46% , the strongest sector performer in July.
- Energy posted gains in 15 of 22 sessions with three distinct swing highs 56.97, 58.53, 60.38 .
- $XLF Financials also strong at +5.51%, supported by higher rate expectations.
- Defensive rotation confirmed: $XLP +3.54%, $XLV +3.42%.
- Cyclicals under pressure: $XLY −4.70% and $XLI −3.34% .
---
Technical Scorecard
Signal $SPY $QQQ $DIA -------- ------ ------ ------ Trend Neutral → Bearish Bearish Neutral → Bearish RSI 14 30.74 near oversold 21.82 oversold 39.87 vs SMA10 Below −1.7% Below −4.2% Below −1.0% vs SMA20 Below −2.2% Below −6.0% Below −1.5% Volume vs 20d Avg Elevated +44% Elevated +41% Elevated +80% Key Trigger Support break active Deep oversold, no reversal Following SPY lower
---
Risk Assessment
Metric Value -------- ------- $SPY Max Drawdown 30 days −3.38% $SPY Realized Volatility annualized 10.6% $QQQ Realized Volatility annualized 21.0% $SPY ATR 14 7.69 expanding Risk budget $100K account, 1% $1,000 Implied stop 8% from 729.46 714.08
The $SPY drawdown of −3.38% over the trailing 30 days is moderate, but the pace of deterioration is accelerating. $QQQ volatility at 21% annualized is more than double the $SPY reading, consistent with a tech-led correction. The expanding ATR suggests position sizing should remain conservative.
Market Structure
- $SPY 30-day range: 729.10 – 755.58 width 3.63% tight range, now breaking down
- Key support levels: 738.89 multiple touches, high strength , 735.21 broken today
- Key resistance levels: 753.36 multiple touches, high strength , 745.53 low strength
- Structure: Lower highs and lower lows forming a textbook downtrend. Breakdown confirmed below 735.21.
- Trendline slope: −0.68 flat to slightly negative
---
Conclusions and Recommendations
- Risk-off rotation is accelerating. The technology and AI-led sell-off has driven $QQQ to deeply oversold levels RSI 21.82 , while capital rotates into energy, financials, and defensive sectors. The 19.6 percentage point spread between the top and bottom sectors is extreme.
- $SPY support at 735.21 has broken on elevated volume. The high-volume breakdown through a multi-touch support level signals institutional distribution. Next structural support sits near 729.10 today's low . A close below that opens the path to the 720 area.
- Energy $XLE and Financials $XLF are the leadership sectors. Continued strength in these groups confirms the rotation thesis. Defensive sectors $XLP, $XLV are also attracting flows.
- Elevated volatility and volume warrant caution. With $SPY ATR expanding and $QQQ volatility above 21% annualized, long-side entries should wait for a higher low to form and for volume to confirm any reversal attempt.
5. Key levels to monitor: - $SPY reclaim of 735.21 — a failed breakdown would be a bullish signal. - $QQQ RSI bounce from oversold — potential mean-reversion setup, but do not anticipate a bottom without confirmation. - Continued $XLE strength — validates the rotation thesis. - $SPY hold above 729.10 — essential to prevent a deeper breakdown.
---
This report is informational only and does not constitute financial advice. All market data is sourced from daily quotes and technical analysis as of the July 29, 2026 market close. Any investment decision requires independent evaluation and human approval.
---
<div style="font-size: 0.85em; color: 666;"
Report details
Field Value ------- ------- Prepared July 29, 2026 after market close Coverage US equity market — broad indices, sector rotation, technical signals Data window June 29, 2026 – July 29, 2026 22 trading sessions Session loopsession-730adf78-e45a-424e-b245-fa6aa96b24cd Run looprun-689014e8-5c9f-44a3-ac5a-754d7d99732a Loop loop-bd10496e-1ccb-49a8-bef4-e0db49293bab Daily After Market report Owner Research lead pending assignment Status Research complete — pending portfolio manager review
< div