Two weeks ago, Scott Rubner of Citadel Securities was explicitly cautious. He wanted a meaningful technical reset before turning constructive on US equities. In his July 13, 2026 Global Market Intelligence report,1 he declares that reset has now largely occurred. The market he sees today is structurally different from the one that prompted his concern, and his analytical framework has shifted accordingly: positioning is no longer the primary driver. Fundamentals are.
Rubner builds his case around ten questions organized across four categories: retail behaviour, technical positioning, market leadership, and earnings. Nine of the ten indicators have improved materially. The tenth, and now the defining debate, is whether corporate earnings can deliver.
Retail: Buying Into History
The retail flow data commands attention. Rubner's platform has not logged a single net sell day in July. Average daily net buying runs more than three times the historical monthly average, making July 2026 the second-strongest month for retail equity demand since January 2020. In the long-short momentum pair, the final week of June and first week of July produced the two strongest buying weeks the platform has ever measured. July 1st alone saw daily buying run nearly twelve times the trailing annual average. The only note of caution: retail trimmed semiconductor and hardware positions on two recent SOX down days, a rare departure from the persistent buy-the-dip behaviour that has characterized this cycle. Both selloffs were followed by sharp SOX rebounds.
Positioning: Idiosyncratic, Not Systemic
Rubner is precise about the character of current market stress. Broad index hedging is contained: SPX one-month skew sits at the 10th percentile versus the past year. But SOX skew has reached the 94th percentile. The stress is concentrated in semiconductors and growth-factor exposures, not distributed across the market at large.
The structural signature beneath the surface is factor dispersion at record levels. The spread between VIXEQ and VIX has reached an all-time high, while implied correlations remain near record lows. Rubner reads this as a stock-selection environment, one in which investors are targeting specific sectors and names rather than hedging broad market beta. Systematic headwinds have also moderated: leveraged ETF assets have contracted roughly 10%, from approximately 218 billion to 198 billion dollars, reducing the mechanical end-of-day rebalancing flows that amplified recent volatility. Financing costs have eased as well, with one-month equity spreads falling from 138 basis points above SOFR to approximately 60 basis points.
Leadership and Valuation: A Better Setup Than Headlines Suggest
Despite a roughly 1% month-to-date gain in the S&P 500, technology has lagged. Communication Services and Financials have been driving performance, with Rubner noting that investors are rotating within equities rather than abandoning the asset class. Breadth on down days has quietly transformed: since June, 64% of S&P 500 down days have seen a majority of index constituents finish higher, compared to just 32% historically. The average number of constituents finishing positive on a down day has nearly doubled versus the 20-year average.
Valuations have also become more supportive. S&P 500 Information Technology, the Nasdaq 100, and the S&P 500 Semiconductor industry all trade below their respective 10-year average forward price-to-earnings multiples, even with the broader index within 1% of all-time highs. Quality growth companies are entering earnings season with valuation support rather than valuation headwinds.
Earnings: Now the Only Question That Matters
Rubner states the conclusion directly: "The next two weeks will determine whether fundamentals can sustain the rally." Consensus calls for 22.4% year-over-year EPS growth in Q2, which would rank among the strongest non-recession-recovery readings on record. Earnings expectations have continued to climb even as valuations compressed, a pattern Rubner observed heading into Q1 as well. The corporate buyback window is also reopening, returning what he identifies as the market's largest structural buyer to equities. The final week of July concentrates approximately 36% of S&P 500 weight and 33% of Nasdaq 100 weight into results, including four Magnificent Seven names.
Semiconductors extend the risk beyond that single week. The sector has grown from 3% of the S&P 500 a decade ago to 18% today, with average three-month implied volatility across the ten largest semiconductor companies climbing from 29% in 2016 to nearly 73% currently. Because semiconductor companies report throughout the calendar rather than in a concentrated window, Rubner concludes that earnings event risk will be distributed across much of July and August. What was once an industry-specific event has become an index-level event.
5 Key Takeaways for Advisors and Investors
- Retail remains a structural floor. With no net sell days in July and buying running at more than three times the historical monthly average, the retail bid is historically large and consistent. It is the most reliable support mechanism in this cycle.
- This is a stock-selection market. Record VIXEQ/VIX spreads and near-record-low implied correlations signal that factor and single-name positioning is supplanting broad macro hedging. Where you are allocated within the market matters more than index-level positioning.
- Breadth is healthier than headlines indicate. More than half of S&P 500 constituents are finishing higher on most down days, and leadership is rotating toward Communication Services and Financials. The index looks more internally resilient than a surface reading suggests.
- Valuations are a tailwind going into earnings. Technology, the Nasdaq 100, and semiconductors all trade below their 10-year average forward multiples at near all-time highs. That is a meaningful setup advantage for the earnings season ahead.
- Semiconductor earnings are now an index-level event. At 18% of the S&P 500 with implied volatility near 73% and results spread across the calendar, semiconductor earnings will move the whole market through August, not just the final week of July. Advisors with concentrated tech and semi exposure need to plan for sustained event risk.
Footnote:
1 Rubner, Scott. "After the Reset: Time to Focus on Fundamentals." Citadel Securities Global Market Intelligence, 13 July 2026, www.citadelsecurities.com/news-and-insights/global-market-intelligence/after-the-reset/.
