The S&P 500 and NASDAQ are continuing to rise, hitting new all-time highs. Today’s gains have already gone beyond yesterday’s highs, which hints at the potential for another record closing if this trend keeps going. On the hourly NASDAQ chart, the trendline around 21,935 could be the next target since there’s no major resistance until that point. Support levels to watch are the July 31 high at 21,457.48, as well as moving averages at 21,270.15 and 21,174.38. A drop below these levels could show a shift to a bearish market.

Current Market Performance

The Dow is up 278 points or 0.63%, reaching 44,738. The S&P is up 27.92 points or 0.43%, standing at 6,473.39. The NASDAQ has gained 101 points or 0.46%, now at 21,782. The Russell 2000 small-cap index is also up, increasing by 15.69 points or 0.69% to 2,298.27, after a rise of 2.99% yesterday. Netflix is showing strong prices, testing the July 21 high of $1,237.06. If it surpasses $1,242.93, the bullish trend will likely continue. However, if it drops below the 200-hour moving average at $1,216.37, momentum may weaken. With the S&P 500 and NASDAQ in record territory, we should focus on strategies that can take advantage of this upward trend. The recent Consumer Price Index data for July 2025 shows inflation at 2.8%, which reinforces that this trend is likely to continue. Thus, we should look at trades that cater to bullish investors. In this setting, buying call options on indices like the QQQ is a great way to benefit from further gains toward 21,935. The Volatility Index (VIX) is around 13.5, historically low, making these options inexpensive. This creates a cost-effective method to maintain long exposure while managing risk. For those seeking income, selling out-of-the-money put spreads on the NASDAQ is an attractive option. Using major support levels like the July 31 high around 21,457 as the short strike allows us to earn premiums while the market remains strong. This strategy profits from a rising market and time decay, as long as prices don’t drop sharply.

Monitoring Potential Reversals

Nonetheless, we need to stay alert for any signs of a reversal. A clear break below the 50-hour moving average near 21,270 would indicate that bullish momentum is weakening. In that case, buying puts or setting up bear call spreads would be the key strategy to profit from a potential downturn. In individual stocks, Netflix presents a similar setup. A rise above $1,243 could be a chance to use short-term call options to benefit from upward movement. On the other hand, if it fails to break that level or dips below the $1,216 moving average, it may indicate that the rally is ending, making it a good candidate for puts. This market strength continues the powerful trend that began in late 2023 with the AI boom. Recent data, such as the addition of 210,000 jobs last month, shows the economy is still growing steadily. This environment supports a bullish outlook, but we must be aware that markets at all-time highs can react strongly to negative news. Create your live VT Markets account and start trading now.

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