Below are highlights from the NDW Morning Update Video for the morning of 8/3/2026. Access the the video on the NDW Morning Update Video page. 

• Indices were mixed following Friday’s (7/31) trading with Crude Oil (CL/) and Nasdaq Composite (NASD) up over 1%, followed by emerging markets (EEM), up 70 basis points. Gold (GC/) fell more than 1%, while developed markets (EFA) were down 62 basis points.
• Among the charts to see additional action was the iShares U.S. Core Bond ETF (AGG), which dropped below $97.25, along with the iShares MSCI Emerging Markets ETF (EEM), which reversed back into Xs from recent lows. U.S. equity charts like the S&P 500 (SPX) – along with others – reversed in Xs and rallied to the 10-week trading band during Friday’s (7/31) trading.
• After seeing reversal higher to begin last week’s action, many indicators, like the bullish percent for the S&P 500 (^BPSPX), maintain near recent reversal highs.  ^BPSPX sits in the lower 60s currently, which has been a high point for the indicator for much of 2026.
• There are roughly 130+ S&P 500 stocks reporting earnings this week. Below are notable highlights of support and resistance.
  • Palantir Technologies (PLTR) – Reports 8/3 – PLTR is a 1 for 5’er that moved into a negative trend in the latter part of June and gave a second sell signal early last week. Initial support lies at $118, while additional can be found at $108, the June 2026 chart low. A move above $128 would return the stock to a buy signal, while a move above $140 would flip the trend back to positive.
  • Advanced Micro Devices (AMD) – Reports 8/4 – AMD fell to a 4 for 5’er after seeing the market RS chart reverse into Os early last week. The stock gave a second sell signal at $456 on 7/28 as shares fell to $432 before reversing back into Xs during the latter part of the week. Beyond current support at $432, additional can be found at $396. From here, it would take a move back toward highs in the upper $560s before seeing the stock return to a buy signal.
  • Caterpillar (CAT) – Reports 8/4 – CAT fell to a 3 for 5’er after seeing the market and peer RS charts reverse down into Os during trading early last week. After reaching highs in June, the stock gave an initial sell signal to kick off July. Last week’s action brought about a third sell signal at $832 as shares fell to the upper $770s before climbing back above $800. Beyond initial support at $776, additional can be found at $760 and $712.
  • CVS Health Corp. (CVS) – Reports 8/5 – CVS has been a 5 for 5’er since May of this year and currently ranks within the top quintile of the Retailing sector matrix. After a second buy signal in late June, CVS rallied to its highest level since early 2022 at $110. Last week’s action brought a reversal into Os from recent highs. Initial support lies at $98, while additional can be found at $90.

We are now one full month into the NDW Custom Model Competition. As a group, our competitor models are a bit worse off than they were at our last our performance update as even the top performing model is now slightly in the red (and slightly behind the S&P 500 over the same period). This has been a challenging period for trend following strategies as the existing leadership (i.e., semiconductors and other AI-related segments of the market) were mostly lower in July. The negative effects of the leaders lagging was potentially compounded as some trend following strategies may have exited positions soon before semis rallied at the end of July. That being said, we are only a third of the way through our three-month competition so there is still time for trends to solidify and our competitor models to regain their footing.

The market has been supported by the largest stocks over the last several years, with the mega cap technology titans consistently pushing the markets to new heights. But this year has been different, and relative strength is finally starting to shift away from the largest companies. 

Looking at the Invesco S&P 500 Top 50 ETF (XLG), the fund has put together a surpassingly slow start to the year. While the S&P 500 is up around 10%, the mega cap representative has gone up by a meager 2.5%, trailing the S&P 500 equal weight index by around 10% as well. Even going back to the end of October, the fund has gone essentially nowhere over the last nine months, with it currently sitting within 1.5% of its price at that time. All of this stagnation within mega caps has resulted in several notable relative strength developments. 

While XLG is still on a buy signal, it has consolidated notably over the last several months. On a relative basis, the fund lost near-term relative strength versus the S&P 500 equal weight index. Following that reversal, the fund moved to its first market RS sell signal since 2022, underscoring the intensity of relative strength deterioration of the mega caps in recent months. 

Given these RS changes, XLG has also seen its fund score cut in half from its highs. On May 19th, XLG displayed a fund score of 5.59, which is in line with where it has been for several years. The last time XLG held a fund score below 3.5 was in early 2023… until now. XLG currently holds a fund score of 2.75, sitting below the acceptable 3.0 threshold for the first time in almost four years, marking a significant departure from its prior strength. XLG’s fund score is even more notable in the context of the average stock. The Invesco S&P 500 Equal Weight ETF (RSP) has held a mediocre fund score below 3.5 for the last two and a half years, but recent action saw RSP’s score move above that level. RSP now holds more strength than XLG for the first time since 2023 as well. So, while mega caps have been weakening, the averages joes of the market have strengthened.

Recent weakness within mega caps has been primarily at the hands of the mega cap growth companies, with semiconductor manufacturers and other tech titans pulling back. The Nasdaq-100 moved to a sell signal last week for the first time since March, briefly entering correction territory. Additionally, the index also lost near-term market relative strength, reversing into a column of Os against the S&P 500 equal weight index (SPXEWI). Looking at the Invesco QQQ Trust (QQQ), its fund score has dropped nearly 1.5 points from its peak in May. That said, the index continues to hold long-term market relative strength, and QQQ’s fund score of 4.36 is still in very solid territory.  

One stock that is reminiscent of the broader mega cap space is Nvidia (NVDA), as it has somewhat mirrored the movement of XLG over the last two years. The stock is essentially flat over the last year after pulling back from May highs. The rangebound trading of the stock has seen it move to technically unfavorable territory as a 2 for 5’er. The stock currently faces resistance at $212, but movement above that level would return it to a positive trend. NVDA also lacks some peer and market relative strength, and it certainly doesn’t have the steam behind it that it once did.  

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool, click here.

Call

Novartis AG (NVS) Oct 16 $150 Call

Put

Generac Holdings Inc (GNRC) Nov 20 $200 Put

Income (Short Put)

Delta Air Lines Inc (DAL) Sept 04 $85 Short Put