Good morning, traders…

As I was watching the market tumble this afternoon, I couldn’t help but think…

We keep hearing the same tariff news over and over…

But the stock market reacts like it’s brand-new. 

The major indexes climbed off a gap up yesterday morning, then trudged back toward yesterday’s pivot: the Powell‑driven low. 

Strong earnings from Meta and Microsoft helped pull tech higher in the morning, but the indexes shrugged and drifted. 

Here’s what’s going on:

• Jerome Powell’s press conference followed the July 30 FOMC meeting, where the Fed held the benchmark rate steady at 4.25–4.50% for the fifth straight meeting. Powell repeatedly flagged “downside risks” in the U.S. economy and made it clear that elevated inflation tied to tariffs will be looked through — all but ruling out a rate cut in September.
  
• U.S.‑EU trade deal: On July 27, President Trump and European Commission President von der Leyen struck a framework deal imposing a 15% U.S. tariff on most EU goods, down from the threatened 30%. In exchange, the EU will increase investment into the U.S. ($600 billion over multiple years) and purchase $750 billion in U.S. energy and strategic goods.
  
• Tariff concerns persist: Despite avoiding an immediate trade war, markets are wary of August 1 tariffs. The deal hasn’t been fully signed, and critical sectors like wine, spirits, steel, and pharmaceuticals face confusion over final terms. Meanwhile, planned tariffs on other countries like China, India, Brazil, and Canada remain in place and could rise further.

That’s why today is so crucial. The market is sitting at a key level. What the indexes do today could define setups for the next week.

Let’s Pull Up The Charts And See Where The Real Opportunities Are Hiding…

QQQ, SPY, and Where We Could Bounce

The Invesco QQQ Trust (NASDAQ: QQQ) touched the Powell low. That’s a critical zone. If it holds, expect a bounce. If it breaks, we may drop harder. 

The SPDR S&P 500 ETF Trust (NYSEARCA: SPY) hasn’t quite tagged that low yet, but it’s close. 

If it follows QQQ and breaks down too, we’ll know it’s more than just tech pulling back.

Microsoft Corporation (NASDAQ: MSFT) and Meta Platforms, Inc. (NASDAQ: META) held up decently after earnings. 

But the rest of the market didn’t seem to care. 

With volatility climbing, earnings reactions tend to be sharp, and we haven’t seen that. 

Watch how long that lasts.

As far as protection, I still lean toward ProShares UltraPro Short QQQ (NASDAQ: SQQQ) calls. Tight spreads. Plenty of volume. 

Some traders prefer Russell 2000 puts—iShares Russell 2000 ETF (NYSEARCA: IWM)—or even QQQ puts, but they can get pricey. 

SQQQ gives you a levered hedge that won’t eat your premium as fast.

If you have a larger account, SPX index puts are another viable option (excuse the pun).

My Top 4 Predictive Price Fusion Setups

Most of my Predictive Price Fusion picks are aimed at next week’s expiration. I’m avoiding tickers with earnings overhangs. 

Here’s what stood out:

NIO Inc. (NYSE: NIO) – China-based EV stock holding under $5. Big open interest on $5 calls for next week (August 8). Strong volume and relative strength today.

Alibaba Group Holding Limited (NYSE: BABA) – Stable through today’s selling. Watching the $125 calls for August 8. Could get extra juice depending on Amazon earnings.

iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT) – Defensive setup. Higher low forming. Watching for a push back toward $88+. Lots of open interest around $88 strike.

Super Micro Computer, Inc. (NASDAQ: SMCI) – Slammed off the scanner earlier this week. Already moved big, but worth watching for continuation if tech rebounds.

Let me know what you’re seeing. If you spot strength in a name or scanner flow you like, post it. Always better to hunt as a group.

Happy trading,
Ben Sturgill

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