On July 28, Eastern Time, the Nasdaq Composite Index (IXIC) continued its strong performance, closing up 70.27 points, a rise of 0.4%, at 21,178.58 points, setting a new record for the highest closing price in history. During the session, the index briefly reached 21,202.18 points, creating a new intraday high. On the same day, the S&P 500 Index rose slightly by 0.02%, while the Dow Jones Industrial Average fell slightly by 0.14%, showing a divergent trend.
Pump Momentum: Trade Benefits and Technology Stocks Lead the Rise
The core factor driving optimistic market sentiment is the easing of trade tensions between the US and Europe. US President Trump officially announced an agreement with the European Union to reduce tariffs on European goods exported to the US to a unified rate of 15%, significantly lower than the previously threatened 30% rate. This agreement effectively avoids a potential large-scale trade conflict and injects a strong boost into the stability of the global supply chain. Chris Turner, an analyst at ING, commented: "This agreement reduces key uncertainties, especially significant on the eve of the originally scheduled tariff implementation date of August 1."
Tech giants become the main driving force behind the index rise:
- Tesla (TSLA) rises by 3%, and its CEO Musk announces a $16.5 billion next-generation AI chip foundry agreement with Samsung Electronics
- AMD surges by 4.3%, Nvidia (NVDA) rises by 1.9%, and Meta (META) and Amazon (AMZN) record gains of 0.7% and 0.6% respectively
- The semiconductor equipment and materials sector strengthens simultaneously, with companies like Dell Technologies and ASML seeing gains of over 2%
Technical Structure and Quantitative Signals: Intensified Bull-Bear Game
From the perspective of the moving average system, the Nasdaq is currently in a "bullish arrangement" state (Chai theory terms: female upper position & flying kiss), with the slow line and fast line having little contact, indicating that the trend has not shown significant entanglement. This pattern is consistent with the trend since 2024—only April’s closing was slightly below the monthly MA5, while the remaining 11 months remained firmly above this moving average, forming a strong upward pattern along MA5.
The quantitative model has issued a short-term warning signal. The golden cross model shows that after 7 key moving averages formed a golden cross recently, the current price has surpassed the forecast peak average of 15,588.58 points, indicating an "expected downward adjustment." Meanwhile, AI big data predictions based on historical pattern matching present conflicting situations:
- Average bullish amplitude for the next week: +1.54% (median +1.06%)
- Number of bullish samples 523 times vs bearish 304 times, bullish/bearish ratio 1.72:1
- However, the prediction range is extremely wide, with the most optimistic bullish at 28.93% and the most pessimistic bearish at -47.89%.
Super Week Storm: A Turning Point of Five Major Events Gathered
Despite the indices hitting new highs, the real test for the market has only just begun. This week has been dubbed "Super Week" by analysts, with multiple key events taking center stage:
- Tech Giants Earnings Season: Meta and Microsoft will release their earnings reports on July 30, followed closely by Apple and Amazon on July 31. Investors will focus on validating the effectiveness of corporate AI capital expenditures, particularly the return cycle of cloud infrastructure investments.
- Federal Reserve meeting (July 30): Although the market expects a 96.9% probability of keeping the interest rate unchanged at 4.25%-4.5%, Chairman Powell’s remarks will become a barometer for the expectation of rate cuts in September.
- Non-farm payroll data (August 1): Expected new jobs in July is 102,000, lower than June’s 147,000; the unemployment rate may rise slightly to 4.2%.
- The final deadline for Trump’s tariffs (August 1): Countries that do not renegotiate trade agreements will face a "global uniform tariff" of 15%-20%.
- Inflation indicator PCE released: The core PCE data for June, which the Federal Reserve is most concerned about, is expected to remain stable at 2.7% year-on-year, while overall inflation rises to 2.5%.
Adam Turnquist, Chief Technical Strategist at LPL Financial, cautioned: "Historical data shows that after the S&P 500 sets consecutive five-day records, the average return in the following month is -0.4%." Tony Pasquariello, head of Goldman Sachs’ hedge fund business, also warned that the risk-reward ratio in U.S. stocks has shown signs of short-term deterioration.
Short-term Outlook: Key Window for Lip Kiss Pattern and Central Construction
From the perspective of the structure of the Chan theory, the "Deep Blue 11 Up" trend that the Nasdaq started from the low point in October 2022 has entered the 6th segment of the green downward phase (Green 6 Down). The key support level is around 15,708.54 points. If this level holds, the index may build a deep blue center, accumulating energy for the continuation of the subsequent trend. This process requires the monthly MA5 and MA10 to gradually converge to form a "lip kiss" pattern — that is, the short-term moving average approaches the long-term moving average but does not break below, in order to ensure upward momentum.
Morgan Stanley analyst Daniel Skelly pointed out: "The current market is at a high level, and volatility has dropped to its lowest since February. Investors need to be wary of complacency and the risks of chasing rises." Vital Knowledge analyst Adam Crisafulli added: "In the context of good news being fully priced in, investors remain hesitant to chase historically peak stocks."
Future Outlook
This Wednesday’s three major events – tech earnings reports, Federal Reserve decisions, and non-farm data – will serve as a litmus test for whether the Nasdaq can hold above 21,000 points. If corporate AI spending narratives are validated by performance and the Fed signals dovishness, the index may challenge 21,500 points; conversely, if inflation proves sticky or earnings guidance is weak, the pullback target of 15,440 points indicated by the golden cross model may become the bears’ benchmark. As free capital strategist Jay Woods said, "It will be a week filled with both love and fear, with an explosion of macro and corporate information." Between the technical formations that kiss the blue silk and the tech narratives that follow the bright moonlight, the market is awaiting a new round of directional choices.
