Trading The Close Market Recap - 07/09/2026: Yields & Oil Drive S&P Breakout as Semis Lag

Stocks Rally as Yields and Oil Break Lower, But Semiconductors Still Need to Confirm

Today’s rally was not just an equity story. It started with pressure coming off the two markets that have been weighing on risk appetite: the 10-year Treasury yield and crude oil.

That was Drew Dosek’s main read on Trading the Close. Stocks did not rally in isolation. They rallied because yields backed away from resistance, oil rejected a key level, and the Dollar weakened enough to give risk assets room to breathe. That combination flipped the market tone green, but it did not erase every warning underneath the surface.

The headline was broad strength across the major indexes. The more important signal was that the market finally got relief from the macro pressure points that had been keeping traders cautious. Now the question is whether that relief turns into follow-through, or whether today’s move becomes another rally into resistance.

The Macro Setup: Yields and Oil Gave Stocks Room

The 10-year yield fell back beneath its declining trend line, which helped remove pressure from equities, especially growth and technology stocks. When yields are rising, long-duration assets tend to struggle because future earnings are discounted more aggressively. When yields ease, that pressure softens.

Oil added to the relief. US Oil fell nearly 4% after rejecting yesterday’s resistance near $75.56. Drew’s next support area sits near the declining trend line around $69.36. That matters because oil has been tied directly to inflation psychology. A break lower in crude can reduce some of the market’s concern around sticky inflation heading into next week’s data.

The Dollar also weakened. Drew noted that the Dollar had broken above an increasing parallel channel and retested it, but instead of bouncing toward $100.97 resistance, it failed at the retest and started to form a bear flag on top of channel support. If the Dollar falls back into that channel, it would add another layer of relief for equities and commodities.

That was the setup behind today’s rally. The market did not suddenly become risk-free. It simply got a better macro tape.

The S&P Breakout Was Constructive, But It Still Needs Follow-Through

The S&P chart delivered the cleanest technical signal of the day. Price closed above the declining trend line that had been shaping a wedge over the last couple of weeks. Drew also pointed out that the same setup was visible on the 10-minute chart, where price sold early, recovered, broke the trend line, retested it, and bounced.

That is the kind of action technicians want to see after a breakout. The level does not matter only because price crossed it. It matters because price crossed it, came back to test it, and buyers defended it.

The next confirmation is simple. Bulls need price to hold above today’s high area and keep the breakout intact. Drew’s key level is around $750.37 on the S&P chart he was tracking. If that area becomes support, the next major resistance sits near the rising trend line around $767.

That gives traders a clear framework. Above the breakout, the rally has room. Back below it, the market loses the cleanest part of today’s bullish case.

QQQ Participated, But SMH Is the Bigger Test

The Nasdaq 100 also had a strong session, with QQQ up 1.66% and pushing above its July 6 gap fill. That is constructive, but Drew was clear that QQQ is not through the main test yet. The next major resistance sits near the declining trend line around $735.51.

The more important warning came from semiconductors.

SMH was up more than 2.4%, but it closed near the lows of its daily candle. That is not the type of close bulls want to see from the sector that usually leads technology rallies. Drew also pointed to a bearish weekly structure, including a topping tail followed weeks later by an engulfing reversal candle.

That matters because broad market strength is more convincing when semiconductors lead. Today, they participated, but they did not confirm leadership. SMH would still need to push toward $640.86 just to test its declining trend line. Near-term support sits near yesterday’s gap fill at $593.42.

That is the difference between participation and leadership. QQQ bounced. SMH still needs to prove the move.

Natural Gas Breaks Down, Metals Catch a Bid

The commodity complex gave traders two very different messages.

Natural Gas broke down hard after storage surplus news, slicing through bullish consolidation and losing its first support area. Drew called NatGas the “widow maker” for a reason. It can move violently, ignore clean-looking setups, and punish traders who size too aggressively.

The failed flag structure now puts $2.90 in focus. If that level does not hold, Drew’s next support is the April low near $2.73. On the weekly chart, he is watching whether a broader inverse head and shoulders structure can still form. The $2.90 level is important because it may decide whether that larger constructive pattern survives.

Metals reacted more positively to the drop in yields and the Dollar. Gold pushed up more than 1%, but Drew still needs to see a break above the lower barrier of its inclining parallel channel near $4,155 before treating the move as confirmed. Support sits near $3,886.

Silver is more conflicted. It is pressing into a declining trend line near $60.42, a level it has now tested three times. A break through would improve the chart, but Drew also noted the bear flag forming around the 50% area of the parallel channel. His bigger framework remains patient: he would rather see silver pull back into the sub-$55 to $50 zone before getting more interested in physical accumulation.

High-Flyers Are Still Respecting Resistance

Several individual names showed why vertical moves into resistance need to be treated carefully.

SanDisk surged from yesterday’s close near $1,725 to an intraday high around $1,950. That is a major move, especially for a stock that began the year near $265. But Drew’s focus was not the percentage gain. It was the next technical test. The $2,000 area is both psychological resistance and part of the broader breakdown-retest zone. To change the structure, SNDK would need to get back inside its parallel channel above the declining trend line near $2,027.

Lumentum was another strong mover, up more than 11% after being up closer to 13% intraday. The next key resistance sits near $809.21. If cleared, Drew sees room toward the 50% area of the parallel channel near $930.38, with a higher level near $1,086. But the chart also has a possible left shoulder and head already in place. A rejection in this resistance zone could begin to form the right shoulder.

Onto Innovation gave the cleanest lesson of the group. The stock jumped 8.77% but rejected almost exactly at the 50% area of its parallel channel. Drew’s point was straightforward: when price moves vertically into a known resistance level, rejection risk increases. ONTO still has resistance near $331 and $345, with support near the lower channel around $281.97.

The lesson across these charts is not that momentum is bad. It is that momentum into resistance is different from momentum through resistance.

Costco and Microsoft Keep the Bigger Warning Alive

Not every large-cap chart confirmed the bullish tone.

Costco fell 4.21% and broke through several support structures. It lost an inclining trend line, fell below the 50% area of its parallel channel, and closed below a longer-term trend line. Combined with a weekly topping tail, the chart now needs a strong recovery to repair the damage.

Drew’s key weekly level is $925.40. A close back above that area would help preserve the bullish case. Without it, the complex head and shoulders structure remains a real concern. Nearer-term, the $891 pivot is the first bounce area to watch, while the stronger confluence sits lower, where the declining trend line meets the lower boundary of the parallel channel near the sub-$800 area.

Microsoft is also still carrying a larger bearish structure on the weekly chart. Drew sees a potential left shoulder, head, and right shoulder. The stock has bounced over the last two weeks, but it still needs to regain the inclining parallel channel near $417.59. To fully negate the bearish pattern, MSFT would need to clear the right shoulder pivot near $465.88.

If the neckline around $361 breaks, the measured move points much lower, toward $157. That does not mean price has to get there, but the pattern is large enough that traders cannot ignore it. Near-term support sits around $344.79.

That is why today’s rally needs context. Some charts improved. Others are still warning that the market is not fully repaired.

The Sector Lesson: Some Charts Do Not Respect Technicals Cleanly

Viewer requests brought Zoetis into the discussion, and the chart led to a broader point about sector selection.

ZTS is trading inside a declining parallel channel and sitting near a breakout retest area around $78.49. If that shelf fails, Drew’s next support is $62.32. Upside resistance sits closer to the $100 area near the 50% line of the channel.

The bigger takeaway was not just the level. It was Drew’s caution around healthcare and biopharma stocks. These names can be driven by binary events like drug trials, FDA decisions, and pipeline updates. A chart may show support, but one failed trial can gap a stock through every level on the screen.

That is a risk-management lesson. Technical analysis works best when price is being driven by supply, demand, psychology, and positioning. In sectors where a single headline can overwhelm the chart, the edge is harder to define.

Bottom Line

Today’s market looked strong because the macro pressure finally eased. Yields broke lower, oil rejected resistance, and the Dollar weakened. That gave the S&P enough room to break out and gave QQQ enough support to push higher.

But Drew’s read was not to blindly chase the rally. The S&P breakout still needs follow-through. QQQ still has resistance above. SMH has not confirmed leadership. Costco and Microsoft still carry bearish weekly structures. Natural Gas broke down hard, while metals improved but still need confirmation.

That is the real message from today’s Trading the Close. The rally was constructive, but confirmation still matters. The market gave bulls a better setup into the next session. Now price has to prove it can hold the levels that created the move.