Markets have been grinding higher day after day in an unrelenting bullish push since the April lows. AI names are doing most of the heavy lifting—MSFT, NVDA, and TSM are leading the charge. Now that earnings season is upon us again, we’ll get to see whether the next leg up comes on the back of blockbuster earnings and guidance from the big boys on campus—or whether we get just enough of a letdown to finally serve up a meaningful pullback.

I’m not asking for much here. Just a humble 5–10% drop in the overall market to reset this incredible run and give us the legs to push even higher into 2026. Based on seasonality, the current run-up, and the pullbacks we saw in both July 2023 and July 2024, I still think a dip could arrive later this month or in early August.

Technically, the RSI on QQQ is right around the level where we’ve historically seen stalls or short-term tops. However, we haven’t seen any divergence yet—something that has shown up each time QQQ has topped over the last few years (see the green boxes in the RSI below). That absence of divergence could signal there’s still a bit more juice left in this move before any meaningful retest throws water on the party. SPY’s weekly RSI, on the other hand, is showing a bit of divergence right now. It doesn’t necessarily mean much—this market has powered through RSI divergence before—but it’s definitely worth keeping an eye on.

QQQ

To be clear: I’m not bearish—I’m actually pretty bullish. I just prefer to add on weakness rather than chase this move higher, especially with so many names looking extended. Historically, we’ve never seen two 20% pullbacks in the same year, so the next meaningful dip—something in the 5-10% range—should set the stage for a strong push higher into new all-time highs, especially when viewed through that historical lens. Until that elusive dip comes, I’m staying focused on names that still offer solid risk-reward setups, like OKLO, ALAB, GOOGL, BULL, and EOSE.

ALAB

Earnings season always keeps things interesting—and you’ve got to keep your head on a swivel. Take MU, for example. It was trading lower on Wednesday after SK Hynix, one of its competitors, got downgraded. That kind of correlated move can be frustrating when it goes against you—or pretty awesome when it goes your way. But either way, it’s tough to predict when your setup will suddenly get flipped upside down because of another stock’s earnings or headline during earnings season.

Just because a stock is extended doesn’t mean earnings will drag it back down to your buy zone. Case in point: TSM. The stock’s been going straight up for almost four months, and then it gapped up another 3.38% on earnings. If we break under Thursday’s candle, maybe we get a pullback into the $230s, but the broader point is: extended names can keep extending, especially when they’re in the hot sector.

TSM

We saw the same story with NVDA back in 2023—after that monster earnings gap on May 25, the market never looked the same. It was a massive moment that cemented AI as a real and unstoppable force.

Could NVDA do that again this earnings season? It’s possible, though I’d say not likely to the same degree. We already know about Blackwell, we know it’s going to be massive, and they’re still crushing it. But in a trend like this, surprises tend to break to the upside. NVDA seems to be making a run at the $5 trillion market cap, which would translate to a price of $204.92—before it potentially reverts to the $122.75 level at $3 trillion.

This makes dips in NVDA buyable. If we get a 15% pullback into the $140s, the risk/reward setup would be pretty solid for a move back toward the $5 trillion milestone.

NVDA