Stocks Summer Range Continues as Oil Drives the MarketsJul 21, 2026

Good day traders, I hope everyone is doing well.

As you know, I was away for the last few days, but apparently the markets are still trapped in the summer range. Stocks have seen a pretty interesting reversal lower, while crude oil has extended above $85 on the ongoing tensions between the US and Iran. It looks like the situation is not ready to improve at this stage, and this is obviously causing new concerns regarding inflation.

We know that inflation came down based on the latest US CPI and PPI figures, but with ongoing geopolitical tensions and higher crude oil prices, inflation is likely to remain elevated. In fact, we are still in the middle of the summer, and this range on stocks may not be broken just yet, which is confirmed by the recent sell-off that likely opens the door for even more weakness in the near term.

Looking at the SP500 and NASDAQ100, we see ongoing consolidation with more possible short-term weakness. We really like the structure of the NASDAQ100, which shows a potential ending diagonal in C wave, but there is one more leg down missing to complete the contratrend move, at around 27k-28k.

At the same time SP500 can also see more weakness as intraday sell-off looks impulsive, so another leg down can show up this week, towards the lower side of a higher degree summer range.

This could also increase demand for safe havens, meaning that the dollar could see more upside if US yields continue moving higher, which is certainly a possibility when looking at US Treasuries. It appears we recently completed an ABC corrective rally, while at the same time the Dollar Index has formed a complex correction that could already be coming to an end. A move back above 101 would suggest that dollar strength is likely to resume.

More about USD and yeilds, and lot of other charts will be shared in our webinar, this Thursday at 15CET.

Grega