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MarketSurge powers the charts in this video.

Bull markets climb a wall of worry. They keep brushing bad news off and find a way to continue rising. The most recent examples include the war in the Middle East, which spiked crude oil prices; the Fed’s reluctance to cut rates due to fears of higher future inflation; and the lack of any signed major trade deals. 

Despite everything, the dips in QQQ to its 20-day moving average have been consistently bought. We all know this is not going to last for too long. It is normal to see deeper pullbacks even in a bull market, especially in individual stocks. After all, bull markets don’t lift all boats equally; they are an environment for good stock pickers. Bull markets also tend to correct through rotations. We have seen lately how legacy stocks like AAPL, GOOGL, Visa, and Mastercard have been under pressure while recent IPOs like CRCL and CRWV have been on absolute fire.

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MarketSurge powers the charts in this video.

The Israel/Iran war escalated and shook out the market’s confidence. Crude oil had a big spike alongside volatility while most stocks pulled back. The focus switched from tariffs to war and the price of oil.

Inflation keeps coming below estimates, which would have been a good reason for the Fed to reconsider its interest rates policy. After the escalation in the Middle East, the Fed will probably keep waiting for more data. Look at the best-performing groups on Friday – obviously anything related to gold, defense, and crude oil spiked, but also all fertilizer and farm product stocks had a strong day. This feeds into expectations for higher food prices. The Fed won’t do or say anything new at this coming meeting. 

The most intriguing development last week was the price action in US Treasuries. Unlike any other global conflict in the past 50 years, this one didn’t lead to a rally in UST. This is a major change in sentiment. UST might not be the go-to safe asset for everyone anymore.

In the meantime, the dips in market leaders are still getting bought. Maybe the conflict in the Middle East will cause deeper and scarier pullbacks, but they are likely to get bought at some point.

After a quick shakeout, PLTR is back near its all-time highs. 

CRCL keeps making headlines after its recent IPO. The news about Amazon and Walmart looking into getting their own stablecoin to cut billions in transaction fees is stimulating people’s imagination about Circle’s USDC potential. This is why Visa and Mastercard took a hit last week.

I’d watch TSLA next week. If it goes back above 335, it can reestablish its upside momentum. It is not about the anticipated Robotaxy. Higher crude oil prices are actually positive for electric vehicles and solar companies as well.

Rare earth stocks might also be in play. The US government wants to reduce its dependence on China, which means investing heavily in companies like MP. 

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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.

The main US stock indexes have almost recovered their losses from earlier this year. QQQ is 2% from its all-time high. SPY is 2.3% away. Inflation and unemployment are low. Scary headlines have led to minor dips that have been bought quickly. 

Select price leaders lost momentum last week – quite a few failed breakout attempts and bearish reversals: PLTR, TSLA, MELI, SE, SFM, HIMS, CRWV, CRWD, GDX, ETHUSD, BTCUSD, etc. This is not ideal, but it is also not unusual. Bull markets correct through sector rotation. The pullback in one group of stocks leads to the bounce in another.  We finally saw small and mid-caps to outperform – aerospace (ASTS, LUNR), robotics (SERV, PDYN), home services (PRCH), finance (DAVE, SEZL, AFRM, TOST, SOFI, IBKR), and drones (RCAT, DRS, KTOS, AVAV, ACHR).

In the meantime, China and the US announced that they are ready to talk about a potential trade deal. Maybe, this is why e-tailers like AMZN and SHOP are already perking up in anticipation of a favorable tariff resolution. A potential deal would also be positive for semiconductors – NVDA, SOXL. 

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