Will Momentum Continue for a Tenth Week?
Crucial Test of Structural Trend Sustainability Next Week
U.S. equity markets closed the holiday-shortened week of May 25 with meaningful gains and new record highs across the major indices. The S&P 500 added 1.4% to settle at 7,580, completing
its 9th consecutive weekly advance. The Nasdaq 100 led the tape with a 2.9% gain to close at 30,333. The Dow added 0.9% to finish at 51,032, while the Russell 2000 gained 1.7% to close at 2,919. Investors rotated into growth through the week validating bullish setups anticipated in this publication last week for AAPL (+4.1%), MSFT (+7.5%), TSLA (+3.4%), and LLY (+6.1%). All of them reaching levels anticipated one week before 🎯🎯🎯🎯.
Technology drove the bulk of the advance, with artificial intelligence spending expectations continuing to set the tone. Micron crossed a historic threshold this week, surpassing $1 trillion in market capitalization. Computer hardware surged late in the week after DELL and NTAP both delivered earnings that exceeded expectations, lifting the infrastructure group broadly. On the software side, MSFT provided support after announcing an upcoming AI-native coding framework. ORCL and SNOW each posted double-digit percentage gains on the week.
Crude oil fell 9.5% to settle at $87.7 per barrel after reports emerged of a provisional 60-day ceasefire framework between the United States and Iran targeting the Strait of Hormuz. The energy drop pulled Treasury yields lower, with the 10-year settling at 4.45%. Core inflation came in at 3.3% year-over-year for April, keeping the Federal Reserve in a wait-and-see posture on rate cuts. Gold faced pressure and settled at $4,560 per ounce after bouncing from a key support line studied below in the paid content.
Key Economic Events Next Week:
Next week will be crucial for two reasons:
The SPX has to prove the latest weekly move holding this price zone, and specifically its central weekly level that differentiates between bullish momentum and consolidation or bearish reversal if it is breached. For the complete set of levels included NDX, QQQ, SPY, DIA, all the Magnificent Seven, Futures, and other megacaps make sure to read the updated levels posted yesterday after the close, they have audio content guiding about the benefits of using levels.
The Semiconductor Giants must hold the line and keep the current valuations, price action is overbought across the board: MU, AMD, INTC, TXN, AVGO, and others are overextended, and NVDA is already in pullback mode after being overbought. We will study today, as usual, SMH, NVDA, AMD and AVGO in the paid content below. Only one has a likely solid bullish setup, the others look toppy.
Sell in May and Goo Away?
There are widespread overextensions and open gaps to consider, not only in Semiconductors but across the SPX, NDX, and IWM. June is historically a strong month (finishing green in 9 out of the last 10 years with the sole exception of 2022, which was a midterm election year). We will soon see if June continues this dominant uptrend, or if it validates the alternative statistic marking it as the worst performing month of a midterm cycle.
The best game plan: Reading the technical indicators as we do permanently, stay prepared, use our levels for validation, and carefully consider the potential of individual names as we do every week with the individual setups mapped for our watchlist focused on high volume and market cap names. Subscribe and unlock all the content and publications posted every week.
Today’s Agenda:
SPX and Market Context: Includes Volatility, Participacion, NDX, DJI, ETFs, Crypto.
Heat Rank (New Feature): All the securities in our watchlist ranked from overbought to oversold conditions.
Deep Dive into Individual Names: AAPL, MSFT, GOOG, TSLA, NVDA, META, AMZN, AMD, AVGO, V, LLY, GLD, and PLTR.
Setups Blueprint: Bullish/bearish conditions for each name, price target, risk control price for the watchlist. I highlight some of them and you can choose the ones you prefer.
Let’s begin,
SPX: Another Early Warning or Finally a Consolidation Begins?
Indecision + High Volume + Overbought conditions are usually meaningful, these are the points to consider and indicators to track: