The Trading Post | 08.07.26

Good morning,

Jobs data is today's main volatility trigger, oil is climbing as Iran moves to restrict the Strait of Hormuz, software stocks are getting punished despite earnings beats, the S&P 500 has logged back-to-back losses, and the Russell 2000 is flirting with the 3,000 level.

Let’s jump in.

Yesterday’s Post-Market Performance

As of 08.06.26 market close.

Market News

• Jobs Report Takes Center Stage: July nonfarm payrolls were expected to rise 80,000, with unemployment holding at 4.2%. A hot number could revive rate-hike bets and pressure growth stocks, while a softer print could give rate-sensitive areas room to breathe. Watch the 10-year yield and SPX/QQQ opening range for confirmation — because guessing before payrolls is just gambling with better software. Reuters

• Hormuz Tensions Put Oil Back in Play: Brent climbed 1.2% to $83.50 and WTI gained 1.1% to $78.15 after Iran published a draft plan targeting U.S., Israeli, and other "hostile" vessels in the Strait of Hormuz. XLE, oil majors, and E&Ps remain momentum candidates, but this trade has reversed fast enough lately to require both a thesis and an exit. Reuters

• Software Learns That "Beat" Isn't Enough: Datadog plunged 19% despite beating estimates, while AppLovin sank as much as 17%-19% following weak guidance and an analyst downgrade. DDOG and APP could offer oversold bounce setups, but the bigger takeaway is that expensive software names currently need perfection — merely being good is apparently unacceptable. Yahoo Finance

• S&P 500 Logs Back-to-Back Losses: The S&P 500 slipped 0.2% Thursday while the Nasdaq 100 fell 0.4% as enthusiasm around AI spending cooled. After a powerful summer run, traders should watch whether buyers defend support quickly or whether two quiet red days start inviting considerably louder selling. Bloomberg

• Russell 2000 Tests the Big 3,000: Small caps fell 0.58% Thursday to 3,001.55, putting the Russell 2000 almost directly on a major psychological level. A rate-friendly jobs report could reopen 3,032 resistance, while a hotter print could send traders hunting for support around 2,970-2,990. Nothing magical about round numbers, of course — except when everyone watches them. MarketWatch

Earnings We’re Watching

• Take-Two Interactive Software, Inc. (TTWO) - Friday (BMO)

• Under Armour, Inc. (UAA) - Friday (BMO)

Trade Ideas

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Daily Moment of Zen

Why It Matters:

Freedom sounds fantastic right up until you discover it comes bundled with responsibility.

Markets are the purest version of that arrangement. Nobody forces you to buy the breakout, sell the dip, chase the earnings gap, or convince yourself that your fourth averaging-down entry is “risk management.” You’re free to make the trade—and the market is equally free to make you regret it.

That’s what makes trading uncomfortable. There’s no central authority required to validate your thesis, guarantee a fair outcome, or rescue a bad position. Price decides. Sometimes intelligently. Sometimes irrationally. Usually without consulting your spreadsheet.

The successful trader doesn’t need the market to behave the way it should. They need the discipline to operate within the freedom it provides.

Because in markets, freedom includes the freedom to be wrong.

Trade accordingly.