Market backdrop
The Dow down over 700 points reads as a scary headline, but the picture beneath it is calmer. The first half of the year was driven by the semiconductor index, up over 70%, and the technology index up over 30% (over 30% even equal-weighted). Those overextended, overleveraged pockets have room to fall, and technology is now hitting a moment of support, so the real test is happening now. From a technical view it's a good setup. Earnings estimates call for 20% earnings growth next quarter, the second consecutive quarter of growth, so the bar is high. Those earnings provisions run high relative to price declines, which produces attractive valuation. What matters is earnings follow-through. Headline risk from the Iran conflict is live; watch the 2-year note. The rotation out of the best-performing sector of the first half looks healthy so far.
Mastercard (MA)
Mastercard is down close to 9% year to date and off about 2% on the day, with earnings due July 30. The thesis rests on a gap in AI. The picks-and-shovels trade already pointed to Nvidia and infrastructure buildout; the newer gap is interconnectivity between AI agents. Agentic AI is now active, and Mastercard is building the guardrails using stablecoin to let agents actually pay. The mechanism is the X42 protocol: where a computer throws a 404 error for something not working, X42 signals a payment for agentic AIs. Add strong infrastructure buildout and a lean into tokenization. The open question is who leads on filling the AI payment-rails gap through stablecoin, and Mastercard's X42 work puts it top of that list. Earnings follow-through is the thing to watch.
Technically, a recent 52-week low was carved at 464.52. A steep white trend line drawn off recent lows was breached on the day with a big red candle, down about 2%. Overhead horizontal levels: recent highs near 543 and 534 (a double-top area after earnings), then 514, with high points near 504. A moving-average confluence of the 5-day and 251-day (shortest and longest, weekly and yearly) sits around 524, a level being given up now; reclaiming it would be a positive sign. The teal 21-day and gold 63-day EMAs come in at 508 and 504, further downside markers. RSI still trends up and holds above the 50 midline despite a brief, failed push into overbought. On the volume profile, the heaviest node sits at the lows near 490 to 505, with the point of control around 496. Price now sits in a smaller, thinly traded node between 520 and 528; a further falter runs to open air until 505. Trading at 520.41.
Valero (VLO)
Valero is up more than 6% on the morning and more than 70% year to date, bucking a weak tape as oil prices rise, with earnings also on July 30. It didn't make the list for energy or the oil conflict. It surfaced on a screen for stocks best positioned going into earnings season, ranking in the top five on price performance relative to earnings-price increases. The next-fiscal-year EPS estimate is up a little over 3.7% over 30 days, a high estimate increase. What stood out most is free cash flow to equity: on quarterly year-over-year growth against tracked revenue targets, Valero was the highest on the list. Factoring free cash flow, revenue, and operating margin, it looks well positioned for earnings season.
The prior trajectory was a modest rising wedge, two upward-pointing boundary lines converging. A sharp recent push has price on pace for a high close for the year, with an intraday high of 282.49. Old high closes sit at 271 and 264; standout lows at 233 and 227. The 233-to-264 range has broken convincingly, though after a breakout like this, price often retreats to old resistance that becomes new support. The 5-day EMA near 271 lines up with the short-term white trend line and the old wedge boundary, a candidate pullback zone. RSI keeps climbing toward the 70 overbought threshold; in a trending market that is read as strength, and new highs alongside RSI pushing into overbought is viewed positively. The volume profile shows a large node from 235 to 248, by far the heaviest recent activity and a potential foothold on any deterioration. Trading at 282.50.
Bullish (BLSH)
This is the high-risk, high-beta trade, and the thesis will take time to play out. It ties to the same large gap: the move into tokenized assets. The problem is regulatory. Traditional markets run on a consolidated tape, with trades required to execute between the NBBO, the national best bid and offer. No consolidated tape exists for tokenized securities. The question is who builds the infrastructure to fit that into existing capital-market structure under regulation, and Bullish is building those guardrails. Its financials are not the greatest, which is the risk-reward trade-off, but the opportunity is high. The bet is that Bullish captures the infrastructure through its transfer agent as it regulates its trading platform. Tokenized securities are coming, already appearing at brokerage firms outside the US and for APAC access, and as markets globalize the value goes to whoever pulls the picks and shovels together.
Bullish is down about 2.33% with the broad market and down about 73% over the past year, though it hasn't traded a full 52 weeks, so those are effectively all-time lows at 21.76. Since then it has bounced. Horizontal levels: a notable low near 25.20, a low that lined up with subsequent highs near 30, and highs near 36; the 49 level is the clearest upside interest, a good distance off. The recent shape is a falling wedge, a bullish counterpart to Valero's rising wedge. With no full trading year, moving averages carry the read: price sits above the 20-day SMA near 25.22, below the 50-day SMA around 32.20. After rapid-fire crossovers into oversold, price has climbed out, riding an upward-sloping green trend line that looks set to break today. Price has not yet crossed above the 50 midline, leaving a bearish tilt. On the volume profile, the point of control sits above current price near 38.38, in a node roughly 35 to 41, centered on the past three quarters' rangebound area. Trading at 25.17.
