KISS Regime Report — Week of 20 July 2026 — BULLISH CAUTION
One verdict. The reasoning behind it. Your posture for the week ahead.
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WEEKLY REGIME VERDICT
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BULLISH CAUTION 🟡
Posture: Selective only — reduced size, A-grade setups, lean the rotation
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THE REASONING
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SPY / QQQ STATUS
SPY slipped under its 8, 20 AND 50-day on Friday’s −1% session — but
those three MAs are stacked tight (744–749) and price is sitting at the
top of a two-month range, not breaking down. It remains far above a
rising 200-day. QQQ is the tell: it lost 700 and closed below its 8, 20
and 50-day, dragged by a hard rout in chips and AI names. That was the
exact downgrade trigger we flagged last week. Meanwhile small-cap value
(IWN) is still trending clean above rising short-term MAs — the rotation
we’ve been tracking is now confirmed on BOTH sides.
Key levels to watch:
→ SPY support: $735 → $696 (200-day)
→ SPY resistance: $749 (reclaim 8/20/50) → $757
→ QQQ support: $686 → $660
→ QQQ resistance: $702 → $719 (50-day)
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BREADTH CHECK
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% of S&P 500 above 50 MA: 64%
% of S&P 500 above 200 MA: 66%
Advancers vs Decliners (5-day): Decliners (tech-led)
New Highs vs New Lows: Mixed — value/defensive new highs, tech new lows
Verdict: Healthy but softening
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MACRO FLAGS — WEEK AHEAD
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→ Fed Chair Warsh testimony (Tue–Wed): first Congressional appearance as
Chair — tone on the rate path and balance sheet is the macro event
→ Alphabet earnings (Wed, after close): the key read on the AI trade
after this week’s chip rout; Tesla also reports
→ Intel earnings (Thu, after close): chip-sector sentiment gauge
→ July prelim Michigan Consumer Sentiment (Fri)
Backdrop: June CPI and PPI both came in COOLER than expected, pulling Fed
hike odds back — a tailwind. But WTI crude ran +14% on the week on the
US–Iran escalation and Strait of Hormuz disruption, VIX popped +12% to
~18.8, and US10Y is holding firm near 4.55%. FOMC is 28–29 July, so the
Fed is now in blackout.
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VERDICT RATIONALE
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The tape underneath is still healthy — 64% of the index above its 50-day,
66% above the 200-day, SPY well above a rising 200, and a genuine clean
uptrend in small-cap value. This is not a stand-down. But the names the
KISS system actually hunts — RS-leading momentum, tech-heavy — just lost
their short-term structure on real volume, and a fresh oil/geopolitical
shock arrived on top of it.
The difference from last week: the rotation’s new leaders are no longer
unconfirmed. Financials and Energy are now building daily trend strength,
Health Care and Comm Services alongside them. So we don’t fight the tape —
we follow it. Size down, demand A-grade bases ONLY, and hunt in the
sectors gaining ground (financials, energy, health), not the ones losing
it (tech, semis, materials). Every setup still gets the dynamic-ceiling
and LVTD gate — no exceptions in a week with a live geopolitical tail.
What would change it:
→ UPGRADE toward Bullish Clear: QQQ reclaims 719 (50-day) on volume, OR
a peaceful de-escalation pulls oil back and re-bids the whole tape
→ DOWNGRADE to Neutral: SPY loses its 200-day, OR breadth rolls back
under 50%, OR the Iran situation escalates into a supply shock
What invalidates this verdict:
→ SPY closing below $735 range support on heavy volume
→ A disorderly VIX spike above 25 on Hormuz headlines
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WATCHLIST + TRADE PLAN (PAID)
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Paid subscribers receive immediately below:
→ The Weekly Watchlist with annotated PCP / BOS setups
→ Entry levels, stop losses, and R-targets
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This week’s watchlist leans hard into the confirmed rotation: the
strongest bases in Financials, Energy and Health Care — the sectors
gaining ground — and steps aside from tech and semis. Everything is
decided before Monday opens. Upgrade at kisstrading.uk.
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Trade Tight · Think in R · Focus on Process
— Radu / KISS Trading
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⚠️ Educational only. Not financial advice. Always DYOR.