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- Alpha Report Issue #141
Alpha Report Issue #141
Current state of the stock market
Brandon
July 18, 2026
Current read is 37 on the fear greed index vs 49 last week.
The Fear & Greed Index ended the week at 37, but with the market just a few percent from all time highs, I think we're closer to 52. I don't see much fear in this market right now. It feels much more neutral than fearful. (this is why I made a MUCH better IWB fear greed index in Discord)
Market Fearful = Potential Opportunity/Deals. (consider buy calls/sell puts/buy shares)
Market Greedy = Potential Over Valuation. (consider buy puts/sell shares/take on less risk)
I like to be bullish when there is extreme fear
I like to be bearish when extreme greed.
Opportunity is out there, just gotta find it!
The Fear & Greed Index finished the week at 37, but I see it closer to 52 with the market still trading near all time highs. Q2 earnings season just began, and this is when some of the best opportunities can show up as companies report results and update guidance. Stay patient, stick to the fundamentals. Its going to be volatile!
Historical Fear/Greed Index Level.
The S&P 500 remains well above its 125 day moving average, which is not fear not the top right of the chart. This again is why I made the IWB fear/greed index that is much better than this. That being said, yes we are above the 125 day and that warrants caution.
The higher the chart goes = more people buying puts
The lower the chart goes = more people buying calls
Notice how the herd buys calls & put at the exact wrong times…
Vix is important to understand for options as it effects premiums drastically.
Higher the VIX, the more we can sell puts for. (good)
30 year fixed mortgage rate held at 6.48% Today, vs 6.48% last week.
10 year treasury bond yield increased to 4.55% Today, vs 4.56% last week
2 year treasury bond yield fell to 4.18% Today, vs 4.21% last week.
Not much action this week with interest rates. Market is still digesting the Iran situation & Kevin Warsh at the fed.
As I always say, interest rates are gravity!
As interest rates/bond yields INCREASE, stocks become LESS attractive because bond yields go UP which makes the risk free bond look MORE attractive.
If you watched your account this week & felt your stomach drop a little…good! That means you're paying attention. But let me ground you before you do something dumb.
Nobody should have expected the pace we were on to continue.
Pull up a 5 year chart of the NASDAQ. Look at the angle of that climb over the past stretch. You can't sit there & tell me you expected the market to keep going up at that pace. I've been saying for a while the market was running hot & volatility was coming. Now it's here. That's not a crisis like many are saying online…. That's the market doing what markets do.
Here's where I actually think we are: the market is basically at fair value right now. Not cheap. Not a bubble. Fair. And fair value with strong earnings growth behind it is a pretty decent place to be.
The AI "efficiency scare" (again)
Part of this week's dip came from another one of those AI efficiency headlines a new model (Kimi) claiming you can do the same AI workload with way less compute. Same script as the DeepSeek panic. Market sees it & immediately goes "nobody's going to need chips anymore, did these companies just waste billions?"
Here's what usually happens: companies realize they can now do double the work for the same cost. So they don't spend less. They do more. The ROI on AI spending goes up, not down. (GOOD!)
Think about it this way… the phone in your pocket has more compute power than the entire space program that put people on the moon. That cost hundreds of millions. Your phone cost a thousand bucks. Did computing demand go down because it got more efficient? Obviously not. It exploded.
Efficiency breakthroughs in AI are going to keep happening. Each one will cause a headline & a dip. And each one makes AI more useful, which means more demand, not less.
What earnings are actually telling us
Only about 10% of the S&P 500 has reported Q2 so far, so it's early. But of the companies that have reported, 88% beat on earnings & 85% beat on revenue.
Now… beats alone don't mean much. If expectations are garbage & you step one inch over the garbage, congrats, you "beat." What matters is the actual growth number. Blended earnings growth is tracking around 24.7% YoY right now, & with the way early reports are coming in, that number could drift even higher.
That's strong. Really strong.
The market will follow the EPS in the long run.
Yes, it will be bumpy, but the patient investor will likely be rewarded.
"But Brandon, the market's expensive"
The forward P/E on the S&P is around 20.3. The 5 year average is 19.9. The 10 year is 19.
People see that & panic. "We're above the average!"
I never want to be the "this time is different" guy. But interest rates are lower than the long term average & earnings growth is stronger than the long term average. That combination matters & helps support this market for now. Again… we will get lots of volatility. Be prepared.
The stuff that could shake things up
There's real geopolitical noise right now. The oil shipping situation in the Middle East could get messy if it escalates, & that would absolutely cause volatility. Earnings season is ramping up. There's always a black swan possibility nobody sees coming.
I'm not dismissing any of it. I'm just saying: volatility is the price of admission in the stock market. It's not a signal that something is broken. Most day to day moves aren't signal at all. They're noise…
Why I'm actually excited
Right now, today, we get to invest in genuinely transformational companies, some at fair valuations, with strong earnings growth, in a decent economy. That's rare. In 1999 I'd have been the annoying guy telling everyone valuations were insane while they laughed at me from their 3x leveraged tech funds. That's not where we are IMO.
So harness this window. Be patient. Buy what makes sense when it makes sense.
Keep your emotions in check.
Expect volatility.
Talk soon, Brandon
P.S. — Earnings season kicks into full gear over the next two weeks. Big tech, semis, all of it. If you want my full breakdowns/live trades/real time market updates/access to me in real time/+ so much more… that's what the discord community is for below.
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Economic/Earnings Calendar For July 20 - July 24
(all times in pst)
Monday July 20:
7a Conference Board Leading Economic Index (June)
Verizon Earnings (premarket)
Tuesday July 21:
7a Existing Home Sales (June)
7a State Employment & Unemployment Data (June)
Coca‑Cola Earnings (premarket)
Lockheed Martin Earnings (premarket)
General Motors Earnings (premarket)
Wednesday July 22:
AT&T Earnings (premarket)
Tesla Earnings (post market)
Alphabet Earnings (post market)
IBM Earnings Earnings (post market)
ServiceNow Earnings (post market)
Thursday July 23:
5:30a Initial Jobless Claims
6:45a S&P Global Flash Manufacturing PMI (July)
6:45a S&P Global Flash Services PMI (July)
7a New Home Sales (June)
Intel Earnings (post market)
Friday July 24:
American Express Earnings (premarket)
Verizon Earnings (premarket)
Everything will be broken down in real time in Discord!
