Premium Subscriber Insights: SPR Exclusive Insights (Delayed Release)
Date: Mon, Jul 20, 2026 at 1:11 PM
Subject: Weekly Market Outlook: Weekly Trend Shifts into the Bearish Zone as Geopolitical Risks Reshape Market Direction
Dear SPR Premium Subscribers,
The U.S. equity market experienced significant volatility throughout this week, with particularly sharp declines on Thursday and Friday. Selling pressure accelerated rapidly during the latter part of the week, causing buying and selling flows to shift decisively in favor of sellers and bringing the market's two-week recovery attempt to an abrupt halt.
As a result, the weekly trend—which had been approaching a transition into a renewed uptrend—reversed sharply and moved back into a corrective structure.
More importantly, the market was positioned at a critical inflection point between the Bullish Zone and the Bearish Zone. Following this week's selloff, the weekly trend has now entered the Bearish Zone, marking the first confirmed week of what appears to be a broader deterioration in market structure.
This development suggests that the market is no longer experiencing a temporary correction within an existing uptrend, but is instead transitioning from a corrective phase toward a broader downtrend.
Accordingly, the scenario we had previously outlined—anticipating a renewed weekly uptrend beginning in mid-July—should now be considered invalidated under current market conditions.
Although widespread profit-taking across AI semiconductor and technology stocks contributed to this week's weakness, we believe the decisive catalyst behind the market's structural shift was the rapid re-escalation of geopolitical tensions between the United States and Iran.
From a macroeconomic perspective, market conditions had continued to improve. Inflation data remained on a gradual cooling path, expectations for monetary policy had become increasingly supportive, and the broader economic backdrop remained constructive enough to support a potential weekly bullish transition.
However, those favorable fundamentals were ultimately overshadowed by external geopolitical developments.
Renewed military confrontation between the United States and Iran, combined with the effective collapse of expectations surrounding a ceasefire-related MOU, sharply increased geopolitical uncertainty across the Middle East.
As tensions escalated, crude oil prices moved higher, reigniting inflation concerns and introducing renewed uncertainty regarding the Federal Reserve's policy outlook. Risk appetite deteriorated rapidly, and selling pressure intensified across growth-oriented sectors, particularly AI and semiconductor stocks.
Consequently, expectations for a short-term bullish trend beginning in mid-July were interrupted far earlier than anticipated, with the market instead shifting toward a downward trend at an accelerated pace.
Importantly, this decline is broadly consistent with the larger bearish scenario discussed in our previous monthly reports, in which we projected a more meaningful market downturn beginning around late July to early August. The primary difference is timing—the current market appears to have brought that transition forward by approximately two weeks.
Furthermore, because the monthly trend is also beginning to transition into a corrective phase, the newly emerging weekly downtrend is increasingly likely to evolve into a more sustained structural decline rather than a short-lived technical correction.
Accordingly, we expect selling pressure to remain the dominant force in the daily market structure over the near term. While intermittent technical rebounds are certainly possible, they should currently be viewed as temporary relief rallies rather than evidence of a new sustainable uptrend.
Under these conditions, we believe that preserving capital and managing downside risk should take priority over aggressive long positioning.
In the very short term, however, the magnitude of this week's decline could attract technical bargain buying early next week. Although additional downside volatility may persist through Monday, buying interest could gradually emerge around Tuesday as oversold conditions begin to stabilize.
Even if such a rebound develops, we believe it should be viewed primarily as an opportunity to rebalance portfolios, realize profits where appropriate, and strengthen risk management ahead of the next potential downside leg, rather than as confirmation of a renewed bullish trend.
Looking ahead, with expectations surrounding the U.S.–Iran ceasefire agreement having effectively collapsed, developments related to military escalation, diplomatic negotiations, and the direction of crude oil prices are likely to remain the most influential external drivers of market sentiment. These geopolitical factors will continue to play a critical role in shaping near-term market direction and volatility.
SPR will continue to monitor these developments closely and will provide timely updates whenever meaningful changes to our market outlook occur.
Thank you for your continued trust and support of SPR Premium.
If you have any questions regarding this analysis, please feel free to contact us at any time.
Thank you.
SPRㅣ Stock Pretiming Report team.
All forecasts are probabilistic and subject to change as market conditions evolve. Investment decisions remain solely the responsibility of each investor.)
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