For subscribers who have been following my research for some time, you may recall my specific concerns in early 2025. At that time, I modeled a potential decline to $4,800 for the SPX; the index eventually bottomed at $4,830 in April. This followed my previous warnings regarding the July 2024 selloff, which ultimately found its floor during the Yen carry-trade liquidation in August.
Today, we are witnessing a distinct asymmetric condition in the market. Sectors outside of Technology, Consumer Discretionary, and Financials are rallying, while Tech, Megacaps, and Bitcoin (BTC used as a “risk-on” thermometer), have already reached oversold conditions. This is atypical, as major market tops are usually characterized by synchronized overbought conditions across all sectors.
In today’s publication you will read the different signals to watch ahead of a week with renewed reasons to be volatile, this time related to geopolitical situations with Iran.
Since November, then the SPX has gone nowhere, I have highlighted the power of individual names, also enriching the variety of our watchlist including names like LLY, XOM, JPM, WMT to our weekly analysis. Today V as another megacap is added to balance the view and opportunities.
High Probability Setups
Last week, our setups hit their weekly targets, including:
SMH: $429.2 (+3.3%)
GLD: $484.0 (+3.3%)
QQQ: $615.0 (+1.0%)
SPX: $694.4 (+0.7%) — I mentioned on Wednesday afternoon that closing the position was valid in case of a bull trap following NVDA earnings.
When trading high-probability setups with specific targets and invalidation levels, performance in a choppy market significantly improves.
Why use invalidation levels? The first rule of trading is capital preservation. Last week, I filtered 30 setups down to the few with the most technical merit and tightest stops as mentioned last Saturday. Even with a correct directional bias in IWM, the target wasn’t reached before the stop-loss level was triggered. The same occurred for XOM and PLTR.
That puts us at 4 out of 7 successful setups in a difficult environment. After four months of weekly posting, our cumulative success rate remains at a robust 75%.
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My two latest deep dives on the "Great Rotation" are essential reading for a comprehensive view of the current landscape:
Today’s Agenda
Geopolitics: Usual Implications for the market
The Momentum Map: Analyzing the stage of every security in a single chart.
Setups Blueprint: High-probability trades and full universe analysis (track your favorites or use the ones I highlight).
Market Context: Technical charts and price levels for U.S. Indices, Volatility, and Bitcoin.
Deep Dive: Individual analysis of Metals and Mega Caps.
→ Today’s edition is special considering the special chapter about Geopolitics before the high probability setups for next week.
Let’s begin.
Geopolitics: The Catalyst for the S&P 493 to Decline Alongside Tech?
The current setup is best illustrated by the contrast between the “Generals” and the rest of the market:
The MAGS ETF (Magnificent Seven) recently bounced fromits 200-day and 40-week moving averages.
The XMAG ETF (S&P 493) continues to display bullish daily and weekly structures, highlighting the ongoing “Great Rotation”.
The current technical setup suggests a market that is already “on edge,” with SPX and NDX trading below their Central Monthly Levels and the VIX hovering around 20. Geopolitical escalation involving Iran would likely act as the catalyst that transitions this “choppy” consolidation into a more synchronized structural decline.
Historical Implications: Iran and Oil Conflicts