2026-W323 Aug – 7 Aug 2026

A payrolls week, an empty screen, and three ways to carry less risk

The Fed held on 29 July with three officials voting to hike, chips have lost roughly a tenth of their value in a month, and Friday brings the July jobs report. Our screen funded none of 48 names and the model behind it is switched off, so all three ideas manage risk rather than take a view.

Analysis as at the close of 31 Jul 2026

Wed, 5 Aug, 8:05 amKratos (KTOS) Q2 results after the close, per company schedule
Fri, 7 Aug, 8:05 amSanDisk (SNDK) results - a memory name inside the window
Sat, 8 Aug, 12:30 amJuly Employment Situation (jobs report), 8:30am New York
Sat, 8 Aug, 8:05 amApplied Optoelectronics (AAOI) results, same day as payrolls

HedgeSPY
Hedge index exposure in SPY into Friday's payrolls - the week's risk is the calendar, not the direction. Worth carrying only until the print clears.
Thesis
The pipeline has nothing to say this week: 48 names screened, zero buys, the bundle that produced the batch is switched off, and expectancy after costs is negative. So the only honest question is what the week can do to a book, not what to buy. The Fed held on 29 July by nine votes to three, and all three dissenters wanted a quarter-point rise - the first time since 2016 that three officials broke the same way. That leaves Friday's payrolls as the swing factor for September, and the street is split on it: the Conference Board reads the meeting as lowering the odds of a September hike, while BofA still looks for a rise at each remaining meeting this year. Consensus is around 90,000 jobs with the unemployment rate holding at 4.2%, after a soft 57,000 in June. Protection is cheap against that: VIX is near 16 and corporate credit spreads near 80 basis points, and the index is flat over 20 sessions only because banks and energy are offsetting a falling technology half.
Invalidation
Payrolls clear without a move in rates, at which point the hedge should be closed rather than rolled into the following week A sharp jump in VIX before Wednesday, which would make the same protection too expensive to start at this size
Entry
buy put protection or cut index beta on Monday or Tuesday, well before Friday's 8:30am release; do not wait for the day itself
Stop
not applicable - a protective overlay has no directional entry to stop out of
Size
0.25% of capital — premium budget = riskPct x capital; size to the sleeve you are covering, not to a stop
Scenarios
BULL40%−0.3R
Payrolls land near the 90,000 consensus, September stays a coin flip, nothing reprices, and the premium paid is the entire cost of the week.
BASE35%+0.1R
A firm print pushes yields up and the index gives back part of its recent gain; the hedge covers most of what the book hands back.
BEAR25%+1.3R
A hot number makes a September hike the base case, bonds and shares fall together, and the protection is what stops a bad week becoming a bad month.
ReduceSMH
Reduce the chip sleeve - one day now moves it further than a normal week, and no valuation floor sits underneath. Re-add only once the range settles.
Thesis
Semiconductors are down 3.7% in five sessions and 8.7% in twenty, and the average daily range is now 27.91 points on a 540.53 close - better than five percent a day. A sleeve that moves that far cannot be sized the way it was sized in June. The trigger was supply, not demand: SK Hynix shifted HBM4 capacity toward higher-margin DDR5, which the market read as AI memory demand cooling, and CNBC put the resulting loss across chip names above a trillion dollars. Our own valuation work offers nothing to catch the fall - margin of safety is negative right across the complex, at -55.4% on MU, -80.1% on AMAT, -80.1% on MRVL and -82.3% on SNDK, and SanDisk reports inside this window. The group is now well below both its 21-day and 50-day averages while still far above the 200-day, so there is room to fall without anything technically breaking. This is a sizing decision, not a call on where the group trades next.
Invalidation
The daily range falls back toward three percent of price while the group holds above its 50-day average, which would make the sleeve ownable at size again A credible demand datapoint - orders, pricing, or a hyperscaler raising capex - that contradicts the memory read
Entry
trim into Monday or Tuesday strength, down to a size that survives another five-percent day without forcing a decision
Stop
not applicable - an exposure reduction has no entry to stop out of
Size
0.25% of capital — retained sleeve x recent daily range must stay under riskPct x capital
Scenarios
BULL35%−0.3R
The group holds above its recent low and bounces hard off it; the part you trimmed misses the first leg of a fast recovery.
BASE40%+0.3R
It keeps swinging inside a wide range into Friday, and the smaller position is simply what makes the week survivable.
BEAR25%+1.2R
Another memory headline or a hot jobs number extends the slide, and the trim is the difference between a drawdown and a problem.
Stand asideKTOS
Stand aside on KTOS through Tuesday's results - the growth is real, the setup is not. Back on the list only once a quarter lands without breaking the low.
Thesis
Kratos reports second-quarter results after the close on Tuesday 4 August, by the company's own announcement; our event feed carries it a day later and we have used the company's date. The business is not the problem - the street looks for about 13 cents and $411.7 million of revenue, up roughly 17% on the year, after four straight beats. The setup is. The company's own sales guide of $400 to $410 million has its midpoint below that consensus, so a fifth beat is not free. The stock closed at 46.60 against a 200-day average near 75.15, its average daily range is close to seven percent of price, base free cash flow is negative so no valuation can be built at all, and our own long score is 39.71% against a 55% bar. Owning a good business is one argument; owning it through a binary print inside a five-day window, at a seven-percent daily range, is a different one. Nothing here pays for sitting in front of the release.
Invalidation
A guided-up quarter that holds its gain for two sessions and takes the stock back above its 21-day average would put it on next week's list Any confirmed change to the reporting date would move this option out of the window entirely
Entry
no entry this week at any price, before or after the release; revisit once a post-print trend is visible
Stop
not applicable - no position is taken
Size
0.25% of capital — no capital committed; shown at the floor because nothing is risked
Scenarios
BULL30%−0.6R
Bookings and guidance beat again, the stock gaps up off a washed-out base, and standing aside costs the whole move.
BASE45%+0.0R
An in-line quarter leaves it drifting inside the same downtrend, and nothing is gained or lost by having waited.
BEAR25%+0.9R
Programme timing slips, the guide midpoint proves to be the real number, it breaks the recent low on volume, and the week is spent watching.

Further
analysis

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Earlier weeks

2026-W31Three risk positions for a Fed week with megacap earnings in play

This is general market research published for a general audience. It is not personalised financial advice, it does not take your circumstances into account, and it is not a recommendation to buy or sell anything. Positions described here are valid only for the stated window and are frequently wrong. Do your own work, and talk to a licensed financial adviser before acting.Disclaimer v1

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