Special Bulletin: July 31, 2025 (2pm Update)

Risks are Rising

The only thing hotter than the summer heat wave lately has been the stock market (and maybe the Brewers in the MLB – unfortunately for my Cardinals). The stock market’s recovery from the CNN, MSNBC, ABC, CBS, NPR, etc. wrongly induced April tariff scare-off (I mean, sell-off) has been astonishing. (Although not as astonishing as the aforementioned networks shabby attempts at journalism.)

But beware: the risks are rising. What risks? Namely the risk of a sharp correction or pullback in the immediate future. Typically, a catalyst is needed to trigger a wave of profit taking, “stop running” or fear selling. The market may have just received that catalyst yesterday courtesy of the Fed. Chairman Powell made it clear that no rate cuts are imminent. Investors are still digesting his comments.

Also, stocks often run into turbulence in the 3rd quarter. There are many opinions why that phenomenon has happened in certain years throughout history, and no one is for certain, but we feel the fact that many mutual funds have their fiscal year end on October 31st may have something to do with it. (We will leave that for another day.)

Tomorrow is August 1st. Usually, the first of a month has an upward bias with all the inflows for 401k’s and other retirement plan contributions. So we will see how it goes tomorrow. This afternoon’s weakness (having been hidden earlier in the day by spectacular price moves in 2 of the “Mag 7” stocks) may be a stealth start to a wave of profit taking by investors. Rest assured, if this weakness is only a speedbump then the stock market will snap back quickly.

One more risk to consider: Did somebody say “August 1st?” Isn’t that the hard deadline for tariffs on all the procrastinating countries? Maybe President trump relents again. Maybe not.

Our Current Market Outlook was downgraded to “Uptrend Under Pressure” with a yellow light as of 3pm on Friday, July 11th with the SPX closing at 6,264.14. As of this moment, the S&P500 has advanced almost 1.5% in the past 20 days. The rally is still very much intact but weakness in certain growth stocks and specific sectors recently caused the downgrade in our risk management signal for the S&P 500 and Nasdaq. This may prove to be only a period of profit taking and rotation by the pro’s. The next few days will be very telling.

Having said all of this, remember the long-term trend is still up as long as the 21-day (and more importantly, the 50-day) moving averages are comfortably below and supporting the major indexes price advance. However, remain open for a test of the 21-day mav’s.

“Cast your bread on the surface of the waters, for you will find it after many days. Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth. If the clouds are full, they pour out rain upon the earth; and whether a tree falls toward the south or toward the north, wherever the tree falls, there it lies.“

“And Jesus said to them, “Render to Caesar the things that are Caesar’s, and to God the things that are God’s.” And they were amazed at Him.”

Ecclesiastes 11:1-3, Mark 12:17 NASB 1995

Game plan: If the recent weakness expands, expect a test of the 21-day mav’s on the main stock market indexes. Keep an eye on the Fed. Pray for discernment from the Lord Jesus regarding stewarding His wealth, and for the peace of Jerusalem (Psalm 122:6-7). May they prosper who love her.

Note: You can learn more about The Triumphant Core Four risk management system by clicking here.

Have a Triumphant day! ®