Daily Newsletter 7/24/25
The performance of the financial markets yesterday was a clear demonstration of investor resilience. Stocks moved higher—not because the risks went away, but because investors showed enough confidence and willingness to accept uncertainty to keep pushing the market to new highs. Indexes ended the day at or near historic levels, boosted by optimism over global trade deals and strong corporate earnings.
This upward momentum in the financial markets highlights a positive mood that has taken hold, even as questions remain about tariffs, central bank actions, and geopolitical developments. Whether this trend can continue will depend on how investors react to upcoming company results and important policy decisions. The next stretch—filled with earnings announcements and economic updates—will be crucial in testing this ongoing optimism.
The optimism was not limited to the U.S.—European and Asian markets also rallied, particularly on news benefiting major exporters like Japanese automakers.
Jobless claims fell again, indicating the labor market remains strong. Initial jobless claims for the week ending July 19 decreased by 4,000 to 217,000 from 221,000 in the previous week (unchanged), and came in below the consensus estimate of 227,000.
The decline in initial jobless signals a strong labor market, which supports the Federal Reserve’s case for maintaining or possibly tightening monetary policy to control inflation. While the Fed remains cautious due to broader economic uncertainties, this data reinforces confidence in the economy’s resilience and suggests the labor market can handle higher interest rates. Upcoming reports will guide the Fed’s next moves.
Measures of market volatility like the VIX dropped even further, signaling complacency or calm.
The VIX index has remained confined within a range of approximately 15 to 22 for over two months. Despite numerous market-moving events, volatility levels have not surged close to the extremes observed when President Trump announced the broad tariff package on April 2, 2025, a day he termed "Liberation Day." This announcement triggered volatility levels near 100, a scale not reached since then.
We maintain a strong conviction that volatility will reemerge multiple times, given the numerous potential sources of uncertainty. The multitude of unknown factors in the global macroeconomic environment makes it unlikely that volatility will remain subdued over an extended period.
OUR TRADES
Below, you will find our portfolio, which is divided into two sections: the Tactical Portfolio and the Medium-to-Long-Term Portfolio.
We share all entry and exit points of our tactical trades with our paid subscribers, along with detailed explanations for why each trade was initiated.
Tactical Portfolio
Today, we will concentrate on TSLA and GOOGL as they respond to price movements following their earnings announcements. We have established two option positions (detailed below), both of which are performing exceptionally well in premarket trading.
Yesterday, we closed our BAC and WFC option positions, realizing profits of 62% and 81%, respectively. Overall, our corporate earnings-related bets have been highly successful. Our earnings season P&L currently stands at 72%, indicating that we have increased the value of our tactical portfolio by 72% since the start of this quarter’s earnings cycle.
Please note that establishing advanced option positions involves a high level of risk; however, as is well understood, risk and reward are inherently correlated. Our tactical portfolio is designed to reflect this risk profile. Unlike our medium- to long-term portfolio, where we take a more conservative approach, we are comfortable assuming higher risk in this portfolio. This strategy represents just one of several investment approaches we have utilized effectively over an extended period.