Mindset During Pullbacks
Pullbacks aren’t threats — they’re opportunities in disguise.
When you’re aligned with the trend, positioned with structure, and reading the tape objectively, a pullback isn’t something to fear. It’s where setups reset, current leaders take a breather, and new leaders often emerge. It’s where the next leg higher quietly builds beneath the surface.
Yeah, it feels uncomfortable — but discomfort isn’t danger. The odds rarely favor a new bear market kicking off right in the middle of trend strength and improving internals.
Keep your mindset clean. Don’t let every dip shake your conviction. Stay patient, stay prepared — pullbacks often reward the traders who don’t flinch.
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Macro Regime (weekly - 7/12)
Tailwind holds. Risk appetite and policy carrying the load.
Where we stand
• Regime score: 61, tailwind
• History: 86th percentile — stronger than most days over the last five years
• Lead engine: Risk Appetite (82, strong)
• Drag engine: Inflation (42, soft) — soft here means cooling, which supports the regime
What’s driving it
• Risk Appetite doing the heavy lifting: VIX down 24% over 21 days to 15.03, QQQ/SPY and SMH/SPY both supportive. Fear is drained and tech is leading.
• Policy strong at 81: 2s10s curve steepened +88 bps, a signal the rate path is cooperating with risk assets.
• Growth improving at 68 with IWM/SPY and Industrials/SPY firming — leadership is broadening beyond mega-cap.
• Liquidity the soft spot at 46: 10Y at 4.57% (+4 bps) and DXY +1.4% are the pressure points. Not breaking, but thin.
Positioning read
• Regime favors cyclical tilt and beta over defensives, with policy tailwind supporting duration-sensitive risk.
• Argues against crowding into pure momentum — Growth/Value down 2% says leadership is rotating, not narrowing.
• Breadth percentile at 42% is the caveat: internals are constructive but not confirming the tape.
Watch next
• Liquidity subscore at 46. A DXY break higher or 10Y through 4.75% would tighten conditions and put the tailwind at risk; a rollover in either would clear the last obstacle.
SITUATIONAL AWARENESS, GAMEPLAN, and TOP IDEAS 7/12
THE MARKET PICTURE (5-pillars checklist)
1. $QQQE Price Action — still constructive
QQQE 120.61, working the right side, holding above rising 21dma-structure. ATR Dist 21ema 0.54, not extended.
QQQ still lagging but holding. QQQE is the one trying to make the higher low and back off structure. That’s the pillar tag.
2. Breadth Regime (Nasdaq MCSI / MCO) — leaning risk-on, watching for the hook
MCSI -0.75, below 10dma (-0.84). Still under, still trending lower on the queues.
MCO +0.42, working back up. Breadth expanding underneath even with MCSI heavy. This is the reclaim setup, not the confirmation.
3. Internals — risk-on
SHY/HYG 1.03, magenta all month. Spreads tight. No fear bid.
VIX 15.03, magenta, below declining structure. Quiet.
4. Liquid Leaders Action — softening
LL Composite MCSI 0.89, below 10dma (1.11), rolling. LL MCO -0.54, below zero. Breadth of the leaders is fading — that’s the tell.
LL price 367.73, -0.68%, still above rising structure but the past-cycle leaders (semis, foundry, edge) are living below declining 21dma. Rotation is doing the work. Setups clustering: Cybersecurity full sweep ($PANW, $CRWD, $FTNT), GLP-1 ($LLY, $HIMS), Emerging ($DELL, $BRKR).
5. Portfolio & NER Feedback — constructive but unconfirmed
Probe layer day. Fresh exposure carrying the book, financed core thin. Held into the weekend on purpose.
Action: NEW $HIMS / ADDED none / TRIMMED none / CLOSED none
NER and NEΔ at the top of what I was comfortable holding over the weekend. Delta -2%, so the fresh layer isn’t paid yet. Guardrails stay loose while I’m still building.
THE GAMEPLAN
Tape is trying, but Monday is reactive, not predictive. /ES pushed a DTL breakout attempt Friday, QQQE working the right side, breadth expanding, small caps holding structure. Broader picture looks good. What I don’t have is confirmation, and now the Middle East headline is back in play after the ceasefire wobble. Futures are pricing that in and I’m not going to front-run how it gets absorbed.
Two open questions sit on top of the pillars for me. First, whether this rotation actually broadens — old leaders (semis, foundry, edge) all still below declining 21dma-structure, and the new leadership in software, healthcare, cyber has to hold while the old names come back. That’s the broadening thesis. Remains to be seen. Second is the news-driven overlay. Last week absorbed it cleanly. If we get escalation, the tape prices that in and weakness shows up.
The make-or-break pillar is Nasdaq MCSI reclaiming its 10dma and hooking higher. That’s the trigger to press. Until then I’m holding the probe, not adding. LL breadth softening is the flag I’m watching next to it — if LL MCSI keeps rolling while Nasdaq MCSI stays under, the rotation thesis loses air. If positions close below structure Monday I raise cash fast. If buyers step in and structure holds, I work the right side.
TOP IDEAS FOCUS LIST
Focus is on names sitting at or reclaiming rising 21dma-structure. These are the tells for reading the tape, not a buy list.
$TWST (225) — Genomics / Gene Therapy
$ALAB (297) — Connectivity Semiconductors
$BRKR (570) — Life Sciences Tools
$PANW (574) — Cybersecurity
$RAL (739) — Defense IT & AI
$CRDO (858) — Connectivity Semiconductors
$HWM (932) — Aerospace Components
$TTWO (1267) — Gaming
$ZETA (1620) — Marketing Automation & CDP
$HIMS (2344) — GLP-1 / Obesity
$APP (2441) — Mobile & Programmatic Advertising
PORTFOLIO UPDATE 7/12
Hey guys, coming into the week with a constructive tape but nothing confirmed yet — and the Middle East situation back in the picture after Friday’s ceasefire headline is the first thing the market has to digest.
Market picture
Broad market still looks strong. /ES pushed a breakout attempt out of the DTL Friday, trying to work toward new highs. QQQ still lagging but holding structure, and QQQE looks better — trying to work the right side. Breadth still expanding, MCSI above the 10dma on the queues. That’s constructive.
Leaders of the past cycle are still trading below their declining 21dma-structure despite strong bounces last week. Rotation into other groups still going on. Not the setup where I chase — the old leaders haven’t proven anything yet.
So all in all, tape is trying but Middle East risk resets the read. If bad news hits and my positions close below structure, I raise more cash. If buyers step in and structure holds, we work the right side back toward new highs. Reactive Monday, not predictive.
On my book
NER and NE Δ are higher than I’d normally carry — right at the limit of what I was comfortable holding over the weekend. Would’ve liked better traction on the fresh layer Friday, didn’t get it, so the cushion on new exposure took some stress. Delta at -2% is telling me the layer isn’t getting paid yet.
Book is green and top-heavy — most of the exposure is fresh, financed core is thin. That’s normal for where I am in the process — still progressively increasing exposure, not managing a mature book. The guardrails tighten when the book matures; right now I’m still building.
Held into the weekend on purpose to see how this news gets absorbed before making the next call. Decisions come early this week — if positions break structure, cleanup happens fast.
Good luck guys ✌️
Today’s action:
NEW: HIMS
ADDED:
TRIMMED:
OUT:
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Themes Lab — 7/12 🧪
Top-down read on where leadership is concentrated, where it’s cracking, and where rotation is building across 180+ themes.
LEADING THEMES (RS)
• Managed Care — RS 77 (#1)
• Genomics — RS 76 (#2)
• Cybersecurity — RS 74 (#3)
• CRO + AI — RS 71 (#4)
• Connectivity Semiconductors — RS 71 (#5)
Healthcare taking the top of the board — Managed Care, Genomics, and CRO+AI all climbing while chips rotate underneath.
COOLING AT THE TOP
High-RS themes losing trajectory — leadership showing cracks, watch for failed setups (any trophies inside these themes are excluded from TOP SETUPS below for this reason):
• Foundry — RS 68 (Breaking Down), key names losing structure: $INTC, $TSEM
• CDN & Edge Computing — RS 68 (Breaking Down), key names losing structure: $NET, $AKAM
• Connectivity Semiconductors — RS 71 (Fading), key names losing structure: $ALAB, $CRDO
TOP SETUPS @ 21dma-structure area
• $PANW 99 — Cybersecurity [Leading]
• $LLY 98 — GLP-1 / Obesity [Leading]
• $CRWD 98 — Cybersecurity [Leading]
• $TWST 96 — Genomics [Leading]
• $FTNT 97 — Cybersecurity [Leading]
• $HIMS 87 — GLP-1 / Obesity [Leading]
• $OSCR 86 — Managed Care [Leading]
• $DELL 99 — AI Servers & Hardware [Emerging]
• $AFRM 93 — Payments Infrastructure [Emerging]
• $BRKR 88 — Life Sciences Tools [Emerging]
THEMES SETTING UP (full breadth)
Watch the themes where the whole leadership board is coiling at the 21dma-structure area together — that’s where the cleanest follow-through tends to come from:
• Cybersecurity — $PANW, $CRWD, $FTNT all setting up (3 of 5 leaders)
• GLP-1 / Obesity — $LLY, $HIMS all setting up (2 of 2 leaders)
TAKEAWAY
Healthcare and Cybersecurity carrying the tape while Foundry and Edge Computing crack underneath. Rotation is building into Life Sciences Tools, Payments, and AI Servers — watch DELL and BRKR as the cleanest Emerging setups.
LEADERS STALKLIST
Liquid Leaders Universe (top RS)
SNDK, MU, WDC, BAND, BE, ICHR, GH, HNGE, TXG, VSCO, AMD, STX, DELL, FTNT, MXL, CNC, TENB, ILMN, INTC, LTH, TIGO, TWST, DDOG, CIEN, HUM, PENG, OKTA, NTRA, FROG, MKSI, ACMR, OSCR, ALAB, CRWD, PANW, LLY, CAKE, RELY, NAVN, STM, LNTH, GTX, BB, ANET, IRDM, SN, ATI, NET, JBHT, SHAZ
Liquid Leaders 21dma-structure Pullback scan (LONG)
SNDK, ICHR, AMD, VSCO, DELL, TWST, VSAT, ALAB, FTNT, ACMR, AMAT, OSCR, ONTO, LLY, BRKR, PANW, BB, VIK, XYZ, CRWD, RAL, TXRH, AVT, DAL, CRDO, HWM, FRO, TT, BROS, MAS, ETN, TTWO, ODFL, AMBA, FLR, ZETA, ALGN, W, BIRK, SW, GEN, HPQ, HIMS, RH
Liquid Leaders Episodic Pivot (EP) sorted by Gap (Potential new Leader/Catalyst)
None
REFERENCES
PT Wiki Is Now Live!!
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