---
title: 'The Market Just Broke Out of a Three-Month Range for the First Time.'
source: 'https://youtube.com/watch?v=CguUSB9XQDI'
video_id: 'CguUSB9XQDI'
date: 2026-08-07
duration_sec: 559
---

# The Market Just Broke Out of a Three-Month Range for the First Time.

> Source: [The Market Just Broke Out of a Three-Month Range for the First Time.](https://youtube.com/watch?v=CguUSB9XQDI)

## Summary

The video features a panel of market analysts discussing a significant technical breakout in the S&P 500, which has broken above a three-month trading range for the first time since early May. They also analyze the implications of falling crude oil prices amid geopolitical tensions, and preview upcoming earnings reports from AMD and SpaceX, highlighting the potential market impact and trading strategies.

### Key Points

- **S&P 500 Breakout** [00:01] — The S&P 500 has broken above a range that has been in place since early May, spanning May, June, and July. This is the first time the index has broken above this range, releasing pent-up energy and potentially leading to new highs as all participants are winners at those levels.
- **Mag 7 Leadership** [00:40] — The breakout has been led by the 'Mag 7' stocks, which had been lagging up until this point. This leadership is a key factor in the market's strength.
- **Crude Oil Weakness** [00:55] — Crude oil markets are being crushed, with volatility in the 15 handle. The continued drop in crude suggests a possible cessation of the Iran situation, as markets are often more rational than news narratives.
- **Market Rationality vs. News** [01:38] — The speaker emphasizes that markets are cold and rational, and one can learn more truth from the crude oil chart than from social media narratives about geopolitical events.
- **Crude Oil Price Gap** [02:06] — Crude oil has cut below support that held for weeks, and there is a big price gap from before the war that has never been filled. The weakness suggests a move back toward pre-war lows.
- **Historical Comparison: 1991 Gulf War** [02:21] — The speaker recalls January 17, 1991, when the first Gulf War started. Contrary to expectations of skyrocketing oil prices, crude collapsed almost immediately because the market collectively believed the conflict would be short-lived, and they were right.
- **Recency Bias in Trading** [03:26] — The speaker discusses recency bias, noting that before the Gulf War, there was fear of another Vietnam-like quagmire, but the conflict ended quickly. This illustrates how traders often project past events onto new situations.
- **AMD Earnings Preview** [04:04] — The panel discusses AMD's upcoming earnings, noting that the stock has been range-bound. One trader has October puts on SMH (semiconductor ETF) and is watching for direction.
- **AMD Trading Strategy** [05:03] — AMD was up 6% pre-earnings, and traders played neutral to upside bullish trades with defined risk calendar spreads due to the $500 price point, limiting position sizes.
- **SpaceX Earnings: A Litmus Test** [05:32] — SpaceX's first earnings announcement is seen as a cultural and psychological event, serving as a litmus test for the entire hyper-scaling industry, including companies like Anthropic and OpenAI. The stock has shaken off dismal performance and broken above a descending trend line.
- **SpaceX Reaction Scenarios** [06:11] — The reaction to SpaceX earnings could be a meaningful rally or a shocker that cuts down to double digits. The outcome will inform opinions on the broader AI and hyper-scaling sector.
- **SpaceX Profitability and Narrative** [07:06] — SpaceX is not yet making money, so the narrative from Elon Musk will be crucial. The 'Elon effect' and razzle-dazzle are expected to drive the stock, similar to Tesla's early days where beating a loss estimate by a small margin caused rallies.
- **Trading SpaceX** [08:19] — Traders discuss their positions in SpaceX: one has a short put and long upside call structure, another has a 125 short put to pay for a 300 strike call, with neutral profitability but potential for multi-thousand dollar gains if the stock moves to 200-300.

### Conclusion

The market's breakout from a three-month range signals a potential shift to bullish sentiment, while falling crude oil prices suggest geopolitical tensions may be easing. Upcoming earnings from AMD and SpaceX are pivotal, with SpaceX serving as a litmus test for the AI and hyper-scaling sector.

## Transcript

severity of the bounce is what's alarming to me. I mean, we'll start with the most basic of basics, the spider. This is big. We have broken above the range. This range has been in place since early May, all of May, all of
June, all of July. Here we are in August. Today is the first time ever we've broken above this range. And from a technical perspective, all that pent-up energy and all that frustration from these 3 months basically gets
released. And new highs tend to beget new highs cuz everybody's a winner at those levels. And so this really throws a big pitcher of ice water on at least in terms of the S&P 500 realm,
the bearish perspective, big time. >> Yeah, first time breaking out of this for quite some time, and it's been really the led by the Mag 7, which we've talked about, has been really lagging up until this point. Um and then you
compile that with crude oil markets that are getting crushed right now. there. Uh volatility in the 15 handle, so it's it's crazy times. >> Well, that's a perfect segue because
here's crude oil, and you know, depending on the news source you have or the Twitter feed you follow, you can you can affirm any narrative you want with Iran. You could you could have yourself convinced that the war is about to start
going nuclear all the way to they've already signed a peace deal or anywhere in between. And the markets tend to be a lot more kind of cold and rational about I think you're going to learn a lot more truth looking at the crude oil chart
and see what people are saying on on x.com. And so given the continued drop something to this. Maybe there's going to be a cessation to this Iran situation
support here for some weeks. We've cut below that today. So looking at that, there we go. So, that's that's looking like it's got every real chance of moving back toward maybe where the lows post-war were. Before the war,
we were here. We had a big price gap, which we've never gotten below since. again given the weakness we're seeing right here in crude. with with this and and crude prices. I mean, even when we look back to like the
Sorry, the Russia-Ukraine war, that gas didn't even do this. It was really all the way up, all the way up, and then eventually all the way down, and this has been wild. Yeah, well, I've told the story before
of back in January 17, 1991. Uh that was the first two rock war starting, and the the universal supposition was how high is crude going to go? 300 barrel, you know, people had
all these crazy speculations. And like 4 seconds after the war started, crude oil seconds after the war started, crude oil collapsed. And that's because the market as a as a whole, as the like the the the
collective brain of Earth, like this is going to be over real quick. And they were right. Um and so, likewise, we see crude here moving lower. It's like, all right, maybe finally this on-again, off-again
really going to end. I was in freshman social studies during that time. I do remember us that was going on. I didn't realize the correlation with oil at the at the time
being a kid, but I do remember that. Yeah, uh Yeah, uh well, yeah, because, you know, the the the fear, because this was the first major conflict we were heading into
since Vietnam. And you know, it's just like with trading, you have recency bias. And the recency bias when it came to war was, "Oh, another Vietnam. This the word quagmire again. And like this is going to be years and years and the
year the Iraqi Revolutionary Guard is the fiercest military force etc. And like 12 minutes later, you know, the white flag goes up. So, another big surprise versus general expectations.
Um, you know, Dr. Jim was just alluding to uh some of the big earnings coming up. Wanted to touch on those quickly. Um, Uh not no sector's been more important in
And even though we're kind of past the bulk of the earning season, this is a Um, I don't have any Like I said, I'm just light as a feather right now. I don't have any position in AMD. I do have some um
have some um October puts in SMH. So, uh but this has been range bound and it continues to be range bound. Um, and until such time as don't think we have any clear direction, but um this is definitely one
to watch because there's precious little else going on to inform what SMH is >> Yeah, I think this one is going to be really interesting because we've seen the uh tug-of-war between software and hardware and today's markets and
yesterday's markets so strong with AMD up 6% pre-earnings. Uh we did play some neutral to upside bullish trades in here with defined risk calendar spreads, but that's really all we can do here with a $500 price point.
dollars. So, kind of we're kind of hand hands are tied to smaller positions with playing for a similar move like we're seeing it right now. >> Right. And and I don't know if any if you're doing anything with the one that
I think from a cultural perspective is going to get vastly more attention, but the big news is SpaceX because it's their first um is their first earnings announcement. From a trend perspective, it has shaken
off its dismal performance even though it was at lifetime lows yesterday on an intraday basis. We've at least gotten to the other side of this descending trend the other side of this descending trend line and we're getting some strength.
Um but tonight is going to be interesting for a two two-fold perspective. One is obviously to see the reaction, whatever those numbers are, at it is within the realm of I don't think it's going to be mild either way. I
think we're going to either see a meaningful rally to to um to shake off the the blasé performance. Although I think there's massive amounts Although I think there's massive amounts of over risk by the to curtail that. Or
see just a shocker where we go back and where we where we cut down to the double what's important from a psychological perspective is whatever follows this, you know, what however this opens tomorrow is going to people are going to
be really informing their opinion on things like Anthropic, things like OpenAI, things like the entire hyper scaling industry either for better or for worse because this is seen as a really important litmus test for like,
okay, now we're seeing the a real public company with real um accounting approved numbers. What's SpaceX really like as a business? >> Yeah, absolutely. I mean they're they're not making money right yet. So it's just
a matter of what they say that draws people's interest to the future, right? >> Yeah, the the Elon narrative is going to be crucially important. It's not going well, how many billions did we lose? Uh but Elon's
razzle-dazzle, which has worked great for a long time, is going to be the the thing that really drives. Um and you know, it's I'll be I'll be listening with great interest uh as well a lot of other people cuz this isn't you
company and it's not a particularly important company to the economy as a whole. But from a from a cultural and psychological perspective in the equity important than this one. >> Yeah, and I think this is this is a
repeat of the narrative that Tesla used to have where the expectation was a loss of $3 per share, but they posted a loss of $2.90 per share and the stock would >> Like that. That's where I think we're going to be with this uh to your point
of the razzle-dazzle, the Elon uh effect. It's and yeah, I think it'll be listened to conference calls for earnings uh in regards >> Are either of you doing anything with this from a trading perspective?
a while. Really hadn't added. I think we've all been thinking like this thing something positive comes out. So um honestly, if it if it tanks, it goes to 98 and change, probably redeploy a similar trade that I have now, which is
basically short a put and long upside just to see when it bounces. And if it >> Same >> Same story. I've got a 125 short put to pay for a 300 strike call that I
collected $300 in the middle. So I have neutral profitability there, but if we do get that move to 200, 250, 300, it'll be a multi-thousand dollar winner. Um >> And he's in January. Well, I'm in September. So we've been long out on
>> Yeah. Well, I'm I've got a feeling it'll be the first thing we talk about Well, Tim, appreciate your time. We'll see what happens with SpaceX earnings, AMD earnings. But yeah, that conference call for SpaceX will be fascinating, for
call for SpaceX will be fascinating, for sure.