US equity indices jumped higher straight after the opening bell, with no breach of premarket support levels in ES. Strength was more pronounced in the Nasdaq, while leadership extended beyond MAGS as software names advanced. That broader tech participation, with semis and DRAM also moving up, helped drive a largely one-way session.
The prior Thursday move marked a reversal higher, Friday’s action was softer, and Monday removed the idea of a rollover. Tuesday then extended the advance, setting up either another open-driven surge or an initial pullback followed by a later push higher. Attention now turns to SNDK earnings, described as likely to be very volatile for tech outside MAGS.
Broadening Strength Across Tech and Derivative Positioning
We are seeing a clear breakout in the major indices, and derivative traders should position themselves to ride this upward momentum. While mega-cap tech stocks usually dominate the headlines, the real story is the broadening strength into software and semiconductor players. This shift is supported by recent options market data, which shows a significant rise in bullish call-option volume for broader tech ETFs, indicating strong institutional backing.
Tactical Approaches Amidst Earnings Volatility
This week’s price action—a sharp reversal last Thursday followed by a brief dip and a powerful push higher—shows that buyers are aggressively stepping in. Historically, when the Nasdaq enters August with strong year-to-date momentum, the index has ended the month in positive territory more than 60% of the time, defying the usual late-summer seasonal slump. We should focus on buying short-term call options on any minor intraday pullbacks in both ES and Nasdaq contracts.
The upcoming wave of tech and semiconductor earnings will bring sharp volatility, particularly for hardware and memory manufacturers. With implied volatility rising across the tech sector, we can use bull put spreads to collect premium while maintaining a bullish bias. By keeping position sizes controlled ahead of these earnings releases, we can capture the upside of this broadening breakout while managing our downside risk.
