Public Kempax report

Daily After Market report · 2026-07-31

Kempax Research

Loop report · 2026-07-31

Daily After-Market Report — July 31, 2026

Summary

US equities rose for a second consecutive session on Friday, July 31, 2026, with the S&P 500 $SPX gaining +0.70% to close at 7,489.72 . The index reclaimed its 10-day, 20-day, and 50-day moving averages plus the July 27 swing high 7,480.57 — the first close above all three short-term averages since mid-July — and the two-session recovery from the July 29 low now totals +2.37%. The advance was broad: the Nasdaq Composite $IXIC added +1.00% and the Dow $DJI rose +0.53%, with all three major averages finishing the week higher and the Dow posting a +0.7% gain for July.

Today's leadership shifted decisively toward cyclicals and consumer spending rather than the defensive rotation that dominated late July. Consumer Discretionary $NYSE:XLY jumped +3.29% , snapping its deeply oversold breakdown reading RSI from 35.94 to 50.13 in one session , while Energy $NYSE:XLE, +1.00% and Industrials $NYSE:XLI, +0.81% also led. Defensives paused, and Technology $NYSE:XLK, −0.22% consolidated after yesterday's +5.5% bounce — the tech sector and the Nasdaq proxy $NASDAQ:QQQ remain in bearish trends below key averages.

The improvement is encouraging but not yet confirmed: momentum is still negative MACD −10.87 on $SPX , $NASDAQ:QQQ remains below all of its moving averages, and the short-term downtrend line slope −7.62 has not been broken. Volatility compression persists a tight 3.57% range , meaning an expansion move is likely in either direction. On macro, the Fed held rates steady without forward guidance, the 10-year Treasury yield rose to 4.73% — the highest in over a year — and the VIX fell 5.56% to 16.14. Hyperscaler 2026 capital-spending commitments $720–745B helped reassure markets on the AI demand outlook, with Amazon +15% on earnings.

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Major Index Performance

Index 31-Jul Close Daily Chg 90-Day Chg from 1-May Trend RSI 14 ------- ------------- ----------- ------------------------- ------- --------- $SPX 7,489.72 +0.70% +3.59% ▲ Bullish 48.06 $DJI Dow 30 52,485.03 +0.53% — — — $IXIC Nasdaq Composite 25,373.85 +1.00% — — — $SPY ETF proxy 747.03 +0.72% +3.66% ▲ Bullish 48.39 $DIA Dow proxy 524.32 +0.54% +5.92% ▲ Bullish 49.85 $NASDAQ:QQQ Nasdaq proxy 687.99 +0.65% +2.05% ▼ Bearish 40.06 $NYSE:IWM Russell 2000 291.20 −0.48% +4.27% ▶ Neutral 45.89

$SPX opened with a +0.33% gap up at 7,462.13, pushed to an intraday high of 7,512.04, and closed near the top of the session — its second consecutive up close. The Russell 2000 proxy $NYSE:IWM lagged at −0.48%, the only decliner in the group, though small caps remain up +4.27% over the 90-day window.

Evidence: Market data via daily quotes, 2026-05-01 through 2026-07-31 63 trading sessions . Index levels for $DJI and $IXIC from the Yahoo Finance live blog, July 31, 2026, corroborated against quote data.

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Sector Rotation — Discretionary Leads, Cyclicals Outperform

Sector ETF 1-May Close 31-Jul Close 90-Day Chg Daily Chg Trend RSI 14 -------- ----- ------------ ------------- ----------- ----------- ------- --------- Health Care $NYSE:XLV 145.16 162.55 +11.98% −0.59% ▲ Bullish 52.42 Financials $NYSE:XLF 51.92 56.94 +9.67% −0.11% ▲ Bullish 59.04 Technology $NYSE:XLK 161.87 175.35 +8.33% −0.22% ▼ Bearish 42.46 Industrials $NYSE:XLI 172.96 179.84 +3.98% +0.81% ▶ Neutral 48.48 Energy $NYSE:XLE 58.85 59.55 +1.19% +1.00% ▲ Bullish 67.99 Consumer Staples $NYSE:XLP 84.17 85.05 +1.05% −0.49% ▲ Bullish 51.73 Consumer Disc. $NYSE:XLY 118.63 116.09 −2.14% +3.29% ▶ Neutral 50.13

Evidence: Sector ETF daily quotes and technical indicator computations, 2026-05-01 to 2026-07-31.

Key Observations

Consumer Discretionary $NYSE:XLY — the day's biggest move at +3.29%. RSI jumped from 35.94 to 50.13 in a single session, repairing the deeply oversold breakdown reading in one day. The sector's 90-day return is still negative −2.14% , and its trend label flipped from Bearish to Neutral — a follow-through above 116.6 would confirm the turn.
Technology $NYSE:XLK — −0.22%, consolidating after the bounce. Yesterday's +5.5% surge held above the 10-day average 175.41 but the sector still trades below its 20-day 178.45 and 50-day 182.97 averages, with RSI at 42.46 and a −15.96% max drawdown. The tech correction is stabilizing, not yet reversing.
Cyclicals bid: Energy +1.00% and Industrials +0.81% led the advance, consistent with a risk-on tone. $NYSE:XLE's RSI at 67.99 remains the most extended reading in the complex.
Defensives paused: Health Care $NYSE:XLV, −0.59% and Consumer Staples $NYSE:XLP, −0.49% gave back a little after leading through July, but both remain in confirmed bullish trends above all key moving averages — leadership intact on the 90-day view +11.98% and +1.05% .
Financials $NYSE:XLF slipped −0.11% but remain a bull-trend leader +9.67% , RSI 59.04, with positive momentum.

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Technical Scorecard — $SPX

Signal Value -------- ------- Trend ▲ Bullish 2nd consecutive up close RSI 14 48.06 recovered to the 50 midline from 39.68 vs SMA10 7,435.72 Above +0.73% vs SMA20 7,481.15 Above +0.11% vs SMA50 7,471.51 Above +0.24% MACD −10.87 negative but narrowing rapidly from −16.24 — crossover watch ATR 14 85.04 Realized Volatility annualized 13.41% Period Max Drawdown −4.5% Buy-and-Hold 90d +3.59% total; 15.24% annualized; Sharpe 1.14 Key Trigger Pullback trigger + volatility compression active

Evidence: Technical indicator computation, trigger scan, and performance review for $SPX, daily interval.

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Market Structure — $SPX

Range: 7,313.92 – 7,581.50 width 3.57% tight range — compression persists
Nearest Support: 7,426.88 3 swing touches, high strength
Major Support: 7,343.16 6 swing touches, high strength
Deep Support: 7,237.85 June 9 low
Immediate Resistance: 7,555.62 6 swing touches, high strength — next target
Upper Resistance: 7,581.50 July 15 swing high → 7,620.90 period high, June 2 peak
Reclaimed Level: 7,480.57 July 27 swing high — the 7 31 close now sits above it

Structure: The short-term pattern of lower swing highs since July 15 7,581.50 → 7,525.94 → 7,480.57 and the July 29 swing low at 7,313.92 remain the structural markers of the downtrend. The July 31 close above 7,480.57 is the first step toward repairing that structure, but a confirmed higher high requires a close above 7,512–7,526 . The trendline slope −7.62 is still downward and not yet broken. A base pattern 3.57% width has been detected — a coiled spring. The July 31 open printed an up gap +0.33% .

Evidence: Market structure analysis for $SPX, daily interval.

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Risk Assessment

Metric Value -------- ------- $SPX Max Drawdown 90 days −4.5% $SPX Realized Volatility annualized 13.41% $SPX ATR 14 85.04 Max Gap Risk 1.42% Risk Budget $100K account, 1% $1,000 Risk Per Share $SPX $170.08 Position Size at 7,489.72 5 units $37,449 Stop Price 8% 7,319.64 Reward Risk Ratio 3.0 Risk Budget Status Within limits $850 $1,000

Max drawdown of −4.5% over 90 days is moderate; gap risk at 1.42% is elevated versus normal conditions. Volatility compression remains the dominant risk feature — the tight 3.57% range with active pullback and compression triggers implies an expansion move is likely. A reclaim of 7,556–7,582 would confirm the uptrend; failure at these levels keeps the range intact with downside risk toward 7,343.

Evidence: Market risk calculation for $SPX.

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Market Context — Fed, Yields, and Macro Backdrop

The Federal Reserve held rates steady "with a lack of forward guidance" Yahoo Finance, July 31 , and the 10-year Treasury yield rose to 4.73% — the highest in over a year — a headwind for multiple-heavy growth stocks. Offsetting the rate backdrop:

Hyperscaler capex signals: the four hyperscalers forecast $720B–$745B cumulative 2026 capital spending , reassuring investors worried about an AI slowdown. Earnings were constructive: Amazon +15% on the day, Apple −7% on soft Services China, and Microsoft +15% the prior day.
Volatility: the VIX fell −5.56% to 16.14 — below the 20 fear threshold.
Oil: WTI $85 and Brent $90, firming on Strait of Hormuz escalation.
Sentiment: University of Michigan final sentiment improved to 55.2 from 54.4.

Evidence: Yahoo Finance live blog, July 31, 2026; additional coverage from Zacks, TheStreet, and LPL Financial market updates for July 31, 2026.

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Conclusions and Market Outlook

The rally is broadening, not just a tech squeeze. $SPX logged a second consecutive up close +0.70% → 7,489.72 and reclaimed SMA10, SMA20, and SMA50 plus the July 27 swing high — the first close above all three short-term averages since mid-July. Leadership on July 31 came from Consumer Discretionary +3.29% , Energy +1.00% , and Industrials +0.81% , a shift from the defensive rotation that dominated late July.

The uptrend is improving but not yet confirmed. MACD remains negative −10.87 , $NASDAQ:QQQ is still in a bearish trend below all of its moving averages, and $NYSE:XLK is still below SMA20 SMA50. The 90-day structure still shows a downtrend line slope −7.62 that has not been broken. Confirmation requires a close above 7,512–7,526 the July 22 swing high and ideally 7,556 major resistance .

Volatility compression persists — expect an expansion move. The 3.57% tight range with both pullback and compression triggers active remains a coiled spring. Upside resolution targets 7,556 → 7,582 → 7,621; downside failure reopens 7,343 → 7,314 → 7,238. Position sizing should account for an eventual range break.

Macro is a two-sided tape. The Fed held without forward guidance and the 10-year is at 4.73% highest in over a year — a headwind for growth. Offsetting: hyperscaler capex commitments $720–745B , a constructive earnings season Amazon +15% , and VIX back to 16.14. Rising yields and rising oil Hormuz are the key macro risks into August.

5. Watch list for the next session: - Upside: $SPX hold above 7,480 now support-in-making → 7,512 → 7,556 major → 7,582 → 7,621 period high - Downside: $SPX below 7,427 → 7,343 major → 7,314 July 29 low → 7,238 June low - Sectors: $NASDAQ:QQQ reclaim of SMA20 701 would confirm tech repair; $NYSE:XLY follow-through above 116.6 would confirm the discretionary turn; $NYSE:XLE's overbought reading RSI 68 bears watching.

Next step: Monitor $SPX for a close above 7,512–7,556 to confirm the breakout from the compression range, and $NASDAQ:QQQ's reclaim of SMA20 701 for tech trend repair. Findings are transferred to portfolio managers for review; no investment decision is made without human approval.

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This report is informational only and does not constitute financial advice. All market data reflects closing prices as of July 31, 2026. Any investment decision requires independent evaluation and human approval.

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Report details

Field Value ------- ------- Prepared July 31, 2026 after market close Coverage US equity market — broad indices, sector rotation, technical signals Data window May 1, 2026 – July 31, 2026 63 trading sessions Key indices tracked $SPX, $DJI, $IXIC Key sectors tracked $NYSE:XLV, $NYSE:XLF, $NYSE:XLK, $NYSE:XLI, $NYSE:XLE, $NYSE:XLP, $NYSE:XLY Session loopsession-44f32e37-5145-4212-890c-fd641d302e62 Run looprun-53d8c1c8-56cf-4ce6-80e6-ae840abb3278 Loop loop-bd10496e-1ccb-49a8-bef4-e0db49293bab Daily After Market report Owner Research lead pending assignment Status Research complete — pending portfolio manager review

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