EB Daily Market Report - Wednesday, August 6, 2025

Executive Summary

• Futures were mostly higher overnight and our major indices gapped up at the opening bell
• We've clearly seen relative strength in the growth-oriented NASDAQ 100 ($NDX, +1.23%) as we've moved throughout today's session
• Cryptocurrencies are mostly higher on this "risk-on" market environment today, with Solana ($SOLUSD, +4.00%) one of its key leaders
• Commodities are again mixed as crude oil ($WTIC, -1.29%) falls back closer to $64 per barrel, approaching a 6-week low set on June 24th
• There was no meaningful economic data out today, but the 10-year treasury yield ($TNX) is up 4 basis points after its yield dropped during 5 of the previous 6 sessions
• Consumer stocks are leading the way higher as discretionary (XLY, +1.89%) and staples (XLP, +1.58%) are the top 2 sectors
• Technology (XLK, +1.04%) is the only other sector to top 1% on today's move thus far
• Retail stocks are particularly strong with broadline retail ($DJUSRB, +3.58%) buoyed by Amazon.com's (AMZN, +3.76%) big jump
• Astera Labs (ALAB, +28.95%) and Arista Networks (ANET, +17.82%) are two big beneficiaries of better-than-expected quarterly earnings results
• Applovin Corp (APP, +2.52%) and DoorDash (DASH, +0.99%) headline the list of companies reporting after the bell today; DASH, in particular, looks very strong heading into its earnings report

Market Outlook

Today feels like the opposite of yesterday. The NASDAQ 100 got off to a solid start on Tuesday, the day after Palantir (PLTR) reported excellent results. Then the NASDAQ 100 faded. Today, Advanced Micro Devices (AMD, -6.46%) is trying to recover after a big gap lower following its earnings. We've seen the NASDAQ 100 strengthening throughout today's session, following that negative reaction on AMD. Technically, however, nothing has changed. The QQQ remains in a fairly tight trading range for now, as pointed out yesterday:

It's bullish to see the NASDAQ 100 climb back above its 20-day EMA and staying there and eventually breaking out is the bullish story from here. I need to see it though. U.S. stocks seem tired to me and with earnings season starting to wind down a bit and rate cuts anything but imminent at this point, I believe it makes sense to take a bit of a skeptical view for now. Please keep in mind that I am absolutely BULLISH and am still looking for the S&P 500 to climb to 7000 by year end. But, as a trader, my tendency is to build cash when I think the market has entered a period of consolidation. The loss of 20-day EMA support after printing a negative divergence and bearish engulfing candle on heavier volume suggests we could see more selling and/or consolidation in the very near-term.

I'm okay being more neutral about stocks right now.

Sectors/Industries

One industry that's been incredibly beaten up the past few months is specialized consumer services ($DJUSCS). There are a few stocks in the group like eBay, Inc. (EBAY, +1.63%) that have been able to trend higher, despite the overall weakness in the industry, but this has been one very ugly area of the market. A positive divergence has surfaced, however, which could result in further near-term strength and a possible 50-day SMA test ahead:

After I see a positive divergence print, I look for price action to clear the declining 20-day EMA and make a run at the 50-day SMA. Also, we could see an upcoming PPO centerline test as well. Should we see a break above the 20-day EMA, stocks within this space could show more leadership.

ChartLists and Trading Strategies

I mentioned the DJUSCS's positive divergence and the fact that EBAY has been strong. I like EBAY to go higher based on this current technical view:

EBAY is lobbying for a spot on one of our portfolios for next quarter. I love the recent earnings results as revenues, $2.73 billion (actual) vs. $2.66 billion (estimate), and earnings, $1.37 (actual) vs. $1.30 (estimate), both easily surpassed consensus estimates. The best current entry point (support) is 88.20, in my view, which is the top of gap support after those solid quarterly results.

EBAY is the only specialized consumer services stock currently on our Strong Earnings ChartList (SECL), at least as of Friday, August 1st. There 7 DJUSCS stocks on our Raised Guidance ChartList (RGCL), however, including EBAY, LRN, ATGE, FTDR, SCI, BFAM, and LOPE. LRN just reported results and gapped up big this morning. FTDR gapped up big yesterday, but then reversed hard, after reporting its quarterly results. ATGE's candle today is one of the best it's seen over the past few months as it climbs back above its 20-day EMA. BFAM also gapped up last Friday after reporting results. It's since pulled back and today tested its now-rising 20-day EMA.

Upcoming Earnings

We have included Upcoming Earnings ChartLists on our website for each day throughout earnings season (likely through late August). Be sure to check out these ChartLists on our website.

Economic Reports

None

Happy trading!

Tom