Category: Uncategorized

MarketSurge powers the charts in this video.

The market is finally realizing that the current administration is not bluffing about tariffs and it is pricing the potential negative consequences. QQQ tested its YTD lows near 500, even briefly flushed below, and then found buyers. If it keeps rallying early next week, it will likely encounter resistance near 510. If it goes above 511, it is likely to test 520. Going back below 500 will open it up to a test of 490-480.

Corrections are a normal part of every trend. The current pullback is a correction within a bull market. It will likely end sooner rather than later and offer great entry opportunities for swing long positions. In the meantime, we have to remain tactical, protect capital, and capitalize on shorter-term market moves – both short and long.

Financials showed notable relative strength last week. XLF closed near all-time highs led by Berkshire, Visa, Mastercard. The deregulation will be a huge tailwind for the financials industry and we are seeing it in market rotation. Over the weekend, Trump gave more specifics regarding the Strategy government fund, which led to a big rally in crypto-land.

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MarketSurge powers the charts in this video.

The main indexes remain in a range not too far from their all-time highs. And yet, there have been some cracks under the surface. The number of distribution days is increasing. Most megacaps sold off after earnings. High-momentum leaders came under pressure last week – HOOD, RCL, PLTR, APP, etc. One of the leading sectors year-to-date – financials, is also starting to lose ground. There’s still strength in select Chinese and biotech stocks but this is hardly enough to sustain the indexes. 

What’s next for the market? 

No one knows. The only thing we can do is develop scenarios and be ready to act. 

The bearish scenario assumes that megacap and momentum stocks are leading and their weakness will be felt in the rest of the market. If the government is serious about spending cuts and raising tariffs, the market will likely blink and price it at some point. A 7-10% correction would not be a big surprise.

The bullish scenario supposes that dips will remain tepid and continue to get bought. The best buying opportunities this year happened after headline-driven pullbacks.

Both scenarios are equally likely. What matters is what we do. The number one goal is always to keep drawdowns small, so we can grow our capital quickly. We do that by keeping losses small. If we can benefit from a quick correction with some tactical Put options and inverse ETFs, we will do that. We already took some META and TSLA Puts last week. Corrections create the best buying opportunities once they are done, so building a list of potential leaders will help us to take full advantage of the next uptrend.

Try my subscription service which includes a private X feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

Bull markets climb a wall of worry. This one hasn’t been any different. The market has been extremely resilient in the face of numerous bad news. Inflation is hotter than expected, yet the S&P 500 is at all-time highs. Most tech mega-caps sold off after earnings, yet the Nasdaq 100 is near all-time highs. Trade wars are accelerating, yet China, Brazil, and Germany markets are up 15% year-to-date.

Rates and the US Dollar are pulling back proving a solid tailwind for most stocks. The speculation is in full force. HOOD has more than doubled since the elections last year. It made another new 52-week high after crushing earnings estimates last week. Given the acceleration in their growth, I wouldn’t be surprised if it tags 80 at some point this year. Other brokerages have also been in a steep uptrend – IBKR and FUTU. TIGR might be the next one to join them. COIN has been stuck in a range as it is more dependent on the price action in Bitcoin. If BTCUSD goes above 100k, we will probably see COIN and MSTR catch up. DKNG is another stock that allows people to speculate. It had a big-volume breakout on earnings last week.

Speculation is running rampant but this time it is not concentrated in a select group of big tech stocks. It’s a true market of stocks with new leaders.

Try my subscription service which includes a private X feed with option and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. How my ideas/alerts did.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only and it should not be considered financial advice. Read my full disclaimer here.