Trading System Signals on 07/22/2025

The stock indexes did the opposite of yesterday, very fast and strong move lower at the open with some nice gains on the short side in the first 30 minutes followed by some sloppy price action for the rest of the day. The "prop and chop" behavior is extremely overdone but still persists. In recent years, when we have seen the sell off pre-empted or "suspended", the real follow through for the downtrend may "play out" in the evening session.

We have watched this weird prop up pattern the last few years, that seems normal to many based on recency bias and have developed the V-Reversal trading system based on what we consider "wrong" market behavior. One of these day's "prop up" liquidity won't be there to support the constant dip buying and short fighting that we have seen for so long which causes un-natural support in the equity indexes. Until then, we still benefit from this price action with V-Reversal.

The hypothetical results are: Stock Index Portfolio 18 = -$730

Two System Portfolio NQ = +$1,295

Coming into today, July was pacing around 8.5 million E-mini Nasdaq contracts for the monthly volume which would be the second lowest monthly volume of the 2020's. December 2020 was 7.67 million contracts. The pace picked up slightly today and NVDA had its first big down day in a while. The Russell 2000 futures were up about 1% and the NYSE Advance Decline line was +1119 while the Nasdaq futures were down -143. Big tech took a break on this divergent day.