Friday’s (8/1) price action capped off a negative week for US Equity indices as the S&P 500 Index (SPX) fell -1.6% Friday to finish down -2.36% for the week (7/25 – 8/1). The majority of US Equity indices reversed into Os from recent highs on their point and figure trend charts with the Dow Jones Industrial Average (.DJIA) and Russell 2000 (RUT) moving to sell signals. While Monday’s trading brought about a rebound for brought equities, Friday’s (8/1) trading led to a notable decrease in participation as stocks returned to sell signals.

The Bullish Percent for NYSE Stocks (^BPNYSE)-—which measures the percentage of NYSE traded stocks that maintain buy signals on their default point and figure trend charts-—reversed into a column Os following a roughly -3.5% decrease after Friday’s trading. This marked the largest one day decreases in the NYSE bullish percent indicator since early April and ranked within the 98^th percentile in terms of one day decreases for the ^BPNYSE going back to 1997. The bullish percent chart now sits at 52% and still suggests more than half of the more than roughly 1800 stocks maintain buy signals. It is worth noting that prior to Friday, the ^BPNYSE saw decreases of -1.64% (93^rd percentile in terms of largest one day decreases) and -2.11% (95^th percentile) on 7/30 and 7/31 for a three day decrease of -7%, the worst since early April.  

Given the decrease in participation, there may be stocks within client portfolios that have broken down and should potentially be evaluated. While higher technical attribute names (TA rating of 3 or greater) may have returned to sell signals recently, these are likely names that have recently pulled back from recent rally highs. The stocks within the potential crosshairs are those who have seen decreases in technical attribute to 2 or below and violated notable levels of support in addition to recently returning to a sell signal. Examples of such are shown below.

AvalonBay Communities (AVB) – Real Estate – AVB began 2025 as a 4 technical attribute stock before falling to an unacceptable 2 for 5’er after seeing a negative trend flip in April and a reversal into a column of Os on the market RS chart in early July. On the default point and figure trend chart, AVB returned to a sell signal following Thursday’s (7/30) by breaking a double bottom at $196 before falling to the lower $180s by the end of the week. This brought the stock to a new 52-week low, and a chart level not seen since April last year. Given the technical deterioration as of late, holders of AVB may look to lighten up or step away here on the reversal back into Xs intraday Wednesday depending on cost basis.

Old Dominion Freight Lines (ODFL) – Transports/Non-Air – Prior to the past roughly 15 months, ODFL had been a consist high technical attribute name for much of the past 15 years. Over the last year ODFL has bounced around in terms of trend on its point and figure chart and technical attribute rating. Action in July brought about multiple trend changes before seeing the stock settle in a negative trend after breaking down during Thursday’s trading. ODFL capped off the week with a violation of support in the mid $140s and a multi-year low with a move to $142. The stock now trades as a 0 technical attribute rating for the first time since December 1999. Owners of ODFL will likely look to step away from the position given its technical deterioration and offering no near-term support on its default chart currently. For those that may be looking for a bounce from recent lows, note that notable resistance as developed in the mid-$170 to mid-$180 range.

It’s that time of the year again, seasonal evaluations and trades for FSM models took place Tuesday. The last seasonal evaluation took place in early May on the heels of a volatile March and April for domestic equities. Many FSM models picked up more defensive and international equity exposure but as the domestic market improved over the last few months, this evaluation saw FSM models go back to the domestic equity market, particularly in the large cap growth space. For the most part, the rotation out international equities in favor of domestic equities was not as much due to weak international performance but the overwhelming strength of domestic equities. Highlighting this point, the All Global and International Diversified group has an average group score of 4.20 while the S&P 500 Index Funds Group has an average score of 4.92. Both groups hold strong average group scores and are respectable options currently.

Digging into exact model trades, the FSM T Rowe Price 5S PR4050 model made three trades. Going into the August evaluation, the model had three of its five holdings centered around international equity exposure. Two of the three international focused funds were sold, T. Rowe Price International Equity Index (PIEQX) and T. Rowe Price Overseas Stock (TROSX), with the three new holdings centered around large cap domestic equities. Within the new lineup, there is one purely international fund, T. Rowe Price International Value Equity Fund (TRIGX), left. Looking at sector exposure, the model is now centered around technology and financials which are both highly ranked sectors on our asset allocation tools.

Moving on to an ETF focused model, the FSM CoreSoultion US Core 2S PR4050 model made a change to one of its two holdings. During its last evaluation in May, the model picked up low volatility exposure to complement its large cap momentum holding, the iShares USA MSCI Momentum ETF (MTUM), which was an interesting combination at the time. As investors became more risk-on over the last few months this led the model to sell out of the Invesco S&P 500 Low Volatility ETF (SPLV) in favor of the Invesco QQQ Trust (QQQ) in August. With the combination of QQQ and MTUM, the US Core model is in aggressive posture for the rest of the year. As mentioned earlier, there were quite a few changes this quarter as the market is in much better technical standing than it was during the last evaluation period in May. The underlying key to success for any of our models, including FSM models, is continually shifting to find the areas within the market with the highest relative strength and they have done that this seasonal evaluation.

Daily Option Ideas for August 5, 2025