Jul 28 – Aug 1, 2025
Nick SchmidtAugust 3, 2025SPY-2.41%QQQ-2.21%
Strong opens into weak closes all week. That's the hallmark of a weakening market and it showed up every single day. Monday I was up 10% at the open, the biggest single day jump of the year, and by the end of the week TSLA was stopped out and I was mostly in cash.
The distribution pattern was clear in hindsight but hard to act on in real time because the opens kept looking strong. Leaders started losing the 10-week, SPOT, UBER, quantum names, and the breadth underneath was deteriorating even though the surface looked fine. Took a partial on SMCI into Monday's strength and started a new META position Thursday on the earnings gap.
Mostly cash now with selective exposure. The best thing that can happen for bulls is this gets uglier and washes stuff out, resets sentiment, and gives us clean setups on the other side.
TSLA stopped Thursday. Took partial on SMCI Monday. Mostly cash.
Took partial profits on SMCI into strength, up 20% from 10-week entry.
TSLA stopped. Bought META on earnings gap at prior highs with 3% position risk.
Something from Stan Weinstein that I keep coming back to. People wait for heavy volume selloffs as the confirmation that things are breaking down but that's not how it always works. When everything together is moving lower, even though volume is light, it can just keep going lower and lower without the heavy volume ever showing up. This week was a good example because the declines weren't dramatic on any single day but the cumulative damage was real.
TSLA getting stopped was fine. The only actual mistake that screws up momentum is selling the leaders too soon. Losses with managed risk don't matter because most of the year's performance comes from a couple of trades. If I keep the losses small and let the winners work, the math takes care of itself. The problem is never the stops, it's cutting the winners short.
When the market keeps going up everything looks like a leader and it's impossible to tell what's actually strong versus what's just riding the tide. This week gave that answer because the pressure exposed the names that were just along for the ride. The ones showing relative strength during the pullback are the focus for the next move because they've proven they have real demand underneath.