To The Moon

July arrives with the S&P 500 and Nasdaq sitting in record territory, AI darlings breaking barriers, and investors wondering whether to ride the wave or brace for a pullback. Seasonally, July is one of the market’s better months, but late‑summer volatility often lurks around the corner.

Below is a playbook to navigate a market at all‑time highs without succumbing to either euphoria or paralysis.

1. Respect the Trend — But Don’t Chase Blindly

Momentum still rules. Strength begets strength, especially when breadth is improving and earnings momentum is intact.

Avoid impulsive entries. Instead of market orders at the open, place staged limit buys on mild down‑days or intraday dips.

Identify leadership. Focus on sectors printing higher highs with rising volume—currently AI semis, cloud, and select industrial innovators.

2. Lean Into July Catalysts

Q2 Earnings Season (mid‑July kick‑off)

Plan: Hold core winners through prints if conviction is high; otherwise use options (calls or collars) to ride upside while capping risk.

Fed Speak and June CPI (early‑to‑mid July)

Plan: Expect algorithmic spikes around data releases. Consider short‑term straddles on rate‑sensitive indices or stay flat until dust settles.

Post‑holiday Liquidity

Plan: U.S. markets often drift on low volume between July 4th and earnings. Use that lull to scale into quality laggards rather than chasing hot names.

3. Rotate, Don’t Liquidate

Trim stretched positions (up 30 %+ YTD) by 10–20 %, freeing cash for new ideas.

Add to under‑owned sectors showing fresh momentum—financials on curve‑steepening, energy on geopolitical tension, select small‑caps on improving breadth.

Rebalance weekly, not monthly during earnings season; leadership can change fast.

4. Deploy Risk Controls While Staying Long

Tighten stop‑losses beneath recent breakout levels rather than trailing too loosely.

Use protective puts one‑to‑three months out on core index ETFs instead of selling winners outright.

Keep 10–15 % cash as “dry powder.” In an upward‑sloping market, cash is an offensive tool—ready for any earnings‑related air‑pockets.

5. Watch for Red Flags

Parabolic charts with negative divergences (price up, RSI down) often precede healthy pullbacks.

Crowded positioning in AI megacaps or single‑theme ETFs can amplify downside surprises.

Bond‑equity disconnects (yields surging while growth stocks stay bid) signal stress—stay alert.

6. Embrace the Mid‑Year Mindset

July is halftime. Use it to:

Audit your 2025 thesis. Are the reasons you bought still valid?

Lock in tax‑efficient gains. Trim high‑basis shares and offset with any strategic losers.

Set Q3 game plans. Summer chop can test conviction; prepare watch‑lists and entry prices in advance.

Quick Checklist Before Every July Trade

Is this a breakout or a blow‑off?

What’s my exit level before I click “Buy”?

Will a single earnings miss change the thesis?

How does this position fit my overall sector weightings?

Am I trading headlines or fundamentals?

If you can’t answer in 30 seconds, step back—clarity beats speed in a frothy market.

Final Word

All‑time highs are both thrilling and dangerous. Seize July by following the trend, planning around catalysts, and tightening your risk discipline. Trim, rotate, hedge—yet stay engaged. Markets reward those who manage exposure proactively, not those who exit in fear.

Remember: bulls make money, bears make money, but only disciplined traders keep it.

Happy trading, and may your July be profitable.