"Buy-the-Dip Mentality Remains 'Firmly in Place' as Markets Show Unstoppable Underlying Bid"

KR Opinion

Market Overview

This is an abbreviated post of yesterday’s Kendall Report

As we progress through the second half of July and conclude the first full month of Q3, markets continue to maintain that underlying bid I discussed in Sunday night's YouTube channel video. The setup for this week suggests markets will keep grinding within their current sideways range, staying well within the daily market grid parameters for major indices. This pattern should persist primarily because the news cycle remains relatively light, creating what I believe will be a day trader's heaven with opportunities to scalp around daily market grid numbers and key weekly levels.

The "buy the dips" mentality remains firmly in place, and since making that observation, markets have rallied fairly substantially in the overnight session. I expect this general upward trend to continue, with the underlying bid keeping primary trends intact through the later part of August. However, an interesting development emerged with the DNI report by Tulsi Gabbard concerning the Russia hoax, which could prove quite interesting if it gains traction and leads to meaningful market impact.

Earnings Drive This Week's Action

This week marks a significant period in Q2 2025 earnings season, with 612 companies reporting across all days. The earnings releases are likely to have more market impact than economic reports, since we only have existing home sales, mortgage applications, and the usual jobless claims data. Tuesday and Wednesday represent the heaviest reporting days at 174 and 222 companies respectively.

Monday brings Verizon Communications ($172.7B market cap), NXP Semiconductors ($56.7B), and Roper Technologies ($58.7B). Tuesday features SAP ($379.1B), Coca-Cola ($303.8B), Philip Morris International ($278.9B), RTX Corporation ($202.4B), and Texas Instruments ($196.8B). Wednesday delivers the mega-cap technology concentration with Alphabet ($2.23T), Tesla ($1.03T), IBM ($262.1B), T-Mobile ($257.8B), and ServiceNow ($198.5B). Thursday peaks with 222 companies including Honeywell International ($153.2B), Union Pacific ($135.9B), and Intel ($99.5B), while Friday rounds out with HCA Healthcare ($87.2B) and others.

Notable earnings sentiment readings include Intel with a concerning -350.00% ESP and HCA Healthcare at -8.77%, suggesting significant negative surprises may be expected for these names.

WaveTech Database Reveals Unexpected Patterns

The recent database output has revealed patterns that diverge significantly from what I anticipated. Despite indices achieving all-time new highs and grinding at elevated levels, we haven't seen the expected increase in bullish sentiment. Instead, we've observed mild selling pressure entering the market, with the intermediate database hovering around the 55% bullish mark.

This situation presents an inverse scenario to 2024, when the database established a solid floor at 61% while markets continued their upward trajectory. Currently, we are encountering a ceiling in the 58% to 61% range that the database cannot sustainably breach. This resistance level signals a shift toward more choppy, sideways price action rather than continued upward momentum.

The daily database shows signs of deterioration, declining from its recent peak of 78% to 67%, with a trajectory suggesting it will continue to fall toward the 52% to 48% range. This decline in shorter-term sentiment indicators suggests the possibility of at least a minor market correction or an extended period of volatility as we progress through Q3.

Despite these mixed signals, the current intermediate reading of 55% bullish sentiment provides sufficient strength to maintain foundational support beneath markets, explaining why the "buy the dip" strategy remains viable. We continue observing upward biases on weekly and short-term charts across all major indices, supporting expectations that markets will continue their grinding advance at a measured pace.

Week Ahead Strategy

The low-event environment favors range trading strategies and scalping opportunities around established grid levels. Earnings releases, particularly Wednesday's mega-cap tech concentration, provide the primary catalysts for volatility expansion. The combination of light economic data and heavy earnings calendar creates an environment where individual stock movements may drive broader index behavior.

Markets show resilience with underlying bid intact, supporting the "buy the dips" approach while respecting established resistance levels. The WaveTech database readings suggest patience will be rewarded as clearer directional signals emerge, with the potential for renewed bullish traction if the intermediate database breaks above 62% in coming weeks.S&P 500 E-mini Futures Technical Analysis

Overnight premarket session shows S&P 500 E-mini futures at 6,351 in consolidation mode within the R02 resistance approach pattern. The WaveTech Models paint neutral momentum within a consolidating primary trend showing 6 out of 10 trend strength. A trading range has developed between 6,329 and 6,352, with a positive 16 points change representing 0.25% gain.

The weekly market grid provides crucial context, with weekly R02 resistance at 6,388 establishing the upper boundary and weekly S02 support at 6,283 marking the lower boundary. This creates a 105-point weekly range that should contain most price action given the low economic release calendar. Key intermediate levels include weekly R01 at 6,360 and weekly S01 at 6,310.

Price pressure momentum indicators show PPM1 at 0.1396 in neutral territory and PPM2 at 0.2407 in maintenance mode. The daily market grid reveals R02 resistance at 6,362 with 65% probability, sitting remarkably close to a Fibonacci level. With minimal economic releases ahead, volatility should remain contained within the weekly range, favoring range trading strategies.

NASDAQ 100 Futures Show Strength

NASDAQ 100 E-mini futures at 23,290 demonstrate compelling bullish momentum across multiple timeframes. The WaveTech Models show daily PPM1 at 0.1968 above the critical 0.15 threshold, while PPM2 sits at 0.2779, well above the 0.25 trend mode level, confirming robust momentum. Weekly timeframe analysis yields PPM1 at 0.2413 and monthly readings show PPM1 at 0.2665, suggesting sustained longer-term momentum.

The R01 breakout pattern confirmation at 23,290 has been achieved, validating the bullish thesis. The next significant target sits at R02 level of 23,341, corresponding with a 70% probability zone. Support levels include 23,281 at 85% probability. The combination of positive momentum readings across all timeframes, successful breakout confirmation, and favorable volatility conditions creates a high-probability setup for continued gains.

Gold Consolidates in Critical Range

Gold futures at $3,373 maintain position within the critical consolidation range between R01 support at $3,366 and R02 resistance at $3,378. Price pressure momentum shows PPM1 at 0.08 and PPM2 at -0.02, creating slight divergence that often precedes directional moves. The WaveTech Models assign 60% probability that gold will test the R02 level at $3,378, but if resistance holds, there's 75% probability of pullback toward R01 support.

The technical structure assessment rates the current setup as "normal, steady recovery" with trend strength of 5/10, indicating a transitional phase. The consolidation occurs within a broader uptrend context, with the market building energy for the next directional move.

Bitcoin Maintains Exceptional Momentum

Bitcoin futures at 119,068 present exceptional momentum characteristics with 80% probability of breakout extension. The WaveTech Models reveal PPM1 at 0.1294 in normal state while PPM2 shows 0.5002 in uptrend configuration, well above the 0.25 trend mode threshold. The market maintains strong uptrend primary structure with trend strength measuring 8 out of 10.

Current positioning above R02 pivot at 119,257 targets the R03 level with 80% probability of testing during the upcoming session. The psychological 120,000 level remains in focus, with the overnight high of 119,692 already challenging these levels. Risk management suggests R01 support at 117,931 maintains 75% probability of holding on any retracement.