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MarketSurge powers the charts in this video.

The market remains resilient. Corrections continue to take the form of sector rotation. The selloff in the momentum high-flyers didn’t even cause a dent in the indexes. Support levels are held. QQQ and SPY briefly dropped near their 50-day moving average when Trump announced new tariffs for China. A couple of days later, he softened his stand, and the indexes quickly recovered to new all-time highs. 

In the meantime, Chinese ADRs have also stabilized and are perking up – BABA, BIDU, PDD, FUTU are some examples. Trump is meeting Xi in person. The market is seeing that as a positive. Common sense says that there will be some version of a deal, even though both countries will continue to work towards bigger trade independence.  

Market sentiment is still mostly bullish. I judge that by market reactions to earnings. Last week, we saw a few downside earnings gaps that were quickly scooped – IBM and TSLA. In the meantime, upside earnings gaps are holding or following through – RTX, ISRG, LRCX.

The next FOMC meeting is this week. The market has priced in another 25bps cut. This is probably the reason why housing and mortgage stocks are getting a bid. Solar, biotech, and small caps are also showing relative strength.

Five of the so-called Mag-7 companies report earnings next week – GOOGL, MSFT, AAPL, AMZN, META. They are followed by so many people that it is hard to produce a sizable surprise. Higher volatility is a given next week, but dips near important support levels are likely to continue to work – just like last week saw PLTR bouncing near 170, SNOW bouncing near 240, QQQ bouncing near 600, VRT bouncing near its 50dma, CEG bouncing near its previous breakout level, etc. 

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MarketSurge powers the charts in this video.

The indexes barely sneezed last week, and the high-momentum flyers from quantum computing, nuclear, space, drones, rare earth metals, robots, crypto, and AI pulled back 10-40%. The price action in momentum stocks is often a precursor of what might happen in the general market. Timing it is the tricky part as sector rotations could continue to keep the indexes near their all-time highs. 

The market is currently in a range-bound, choppy mode. In such an environment, breakouts don’t work for more than a day or two and often lead to a reversal. Breakdowns don’t last too long either, as the dips near support levels are getting bought. The market is digesting its recent gains and looking for new catalysts. They are right around the corner.

The new earnings season has just begun. Morgan Stanley crushed estimates and gapped up. Then, lending troubles in select regional banks brought down the entire financial sector, and Morgan Stanley gave back its gap. American Express also reported strong results, gapped up, and finished strongly.

It is a scalper’s tape for nimble traders for the time being, where trading less and focusing on earnings movers makes sense until the next clear swing move. 

Try my subscription service, which includes a Discord room and private X feed with options 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.

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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.

We are at the stage of the bull market cycle where some assets have gone parabolic – gold, silver, rare earth metals, quantum computing, and nuclear stocks are just some of the examples. I am not saying they can’t go any higher. On the contrary, a good story can carry a stock much higher than most people can imagine. At the same time, volatility is picking up. By volatility, I mean choppiness, reversals, and wider daily and weekly price ranges. Last Friday could be just another shake-out or a warning shot of something more to come. Everyone with some experience in the market knows that at this point, many momentum stocks are playing a game of musical chairs, but no one knows how long it will last; therefore, the most rational thing to do is to keep playing – not recklessly. If you chase extended stocks, use too much leverage, and take too big positions, you are guaranteed that you will be shaken out. Momentum tapes like these require a tactical approach and strict risk management.

Try my subscription service, which includes a Discord room and private X feed with options 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. See how my ideas/alerts performed.

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.