The S&P 500 and NASDAQ continue their upward momentum, reaching new all-time highs. Gains today have already surpassed yesterday’s intraday peaks, suggesting another possible record close if the trend persists.
On the hourly NASDAQ chart, the rising topside trendline near 21,935 could serve as the next target, with no significant resistance until then. Support levels include the July 31 high at 21,457.48 and moving averages at 21,270.15 and 21,174.38. A break below these would signal a shift towards a bearish market.
Current Market Performance
The Dow industrial average has increased by 278 points or 0.63% to 44,738. The S&P index is up 27.92 points or 0.43% at 6,473.39, while the NASDAQ index has gained 101 points or 0.46% to 21,782. The Russell 2000 small-cap index is up 15.69 points or 0.69% at 2,298.27, having increased by 2.99% yesterday.
In the case of Netflix, the price has extended higher, testing the July 21 high at $1,237.06. Passing the $1,242.93 level would sustain the bullish trend, but a decline below the 200-hour moving average at $1,216.37 could weaken the upward momentum.
With the S&P 500 and Nasdaq pushing into new record territory, our immediate focus should be on strategies that benefit from this upward momentum. The recent July 2025 Consumer Price Index report, showing inflation holding at a manageable 2.8%, gives little reason to fight this trend. Therefore, we should consider trades that align with buyers remaining in full control.
Given this environment, buying call options on indices like the QQQ offers a direct way to participate in further gains toward that 21,935 level. The Volatility Index (VIX) is sitting near 13.5, which is historically low and makes the cost of buying these options relatively cheap. This presents a cost-effective way to maintain long exposure while defining our risk.
For those of us wanting to generate income, selling out-of-the-money put spreads on the Nasdaq is an appealing option. Using key support levels like the July 31 high around 21,457 as the short strike allows us to collect premium while the market stays strong. This strategy benefits from both a rising market and time decay as long as prices do not fall sharply.
Monitoring Potential Reversals
However, we must remain vigilant for signs of a reversal. A decisive break below the 50-hour moving average near 21,270 would be our signal that bullish momentum is failing. In that scenario, buying puts or establishing bear call spreads would become the primary strategy to capitalize on a corrective move.
On a single-stock basis, we see a similar setup in Netflix. A move above $1243 could be played with short-term call options to ride the corrective rally higher. Conversely, a failure at that level or a break back below the $1216 moving average would signal the rally has run out of steam, making it a candidate for puts.
This current market strength is a continuation of the powerful trend we saw ignite back in late 2023 with the artificial intelligence boom. Recent data, like last month’s addition of 210,000 jobs, confirms the economy is still expanding steadily. This backdrop supports the bullish bias, but we must remember that markets at all-time highs can be sensitive to any negative surprises.
