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Bollinger Band Buy Signal Concept

by Sentimentrader
2026-08-03
July 2026 marked SPY's worst July performance in a decade, closing with a microscopic 0.03% gain. While a systematic Bollinger Band squeeze setup identifies robust medium-term upside, short-term data warns of near-term turbulence

Key points

  • Despite typically strong seasonality, July 2026 ended with a meager 0.03% gain for the SPY, marking its worst July performance in a decade.
  • A classic Bollinger Band squeeze strategy breaking below the lower band provides a systematic, low-risk setup for mean reversion.
  • While medium-term win rates are robust for both the S&P 500 and the Nasdaq (nearing 80% over 3-4 months), short-term data suggests initial turbulence, signaling investors to prepare for entries rather than buying immediately.

Seasonality and Market Context

July is historically a robust month for the U.S. stock market. However, July 2026 broke this trend, characterized by frustrating sideways consolidation. The SPY ETF managed to close the month with a microscopic 0.03% gain, marking its worst July performance in nearly a decade.

Bollinger Band Buy Signal Concept

This weak July performance came amid a tug-of-war between investors over expectations for a potential Strait of Hormuz agreement. Despite this chop, this low-volatility consolidation phase suggests that a major swing trade opportunity is on the horizon.

I've been on record in previous notes that I never want to catch a falling knife. I would rather wait for a trading signal to develop so I can measure the

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