A big breakout feels imminent.

Morning weakness turns to strength, again. BULLISH!

Francesco - Smart Stocks

Jun 02, 2025

∙ Paid

Key takeaway: Don’t let intra-day shake outs derail your plan - trust stocks above those moving averages.

Markets survived an early morning shakeout to post a VERY constructive day, holding above the 10 EMA.

After today, I have a list of 10 stocks set up for tomorrow, the longest in a while.

It was an interesting day!

Morning weakness turned to strength, and we saw various leaders like PLTR, HIMS pause, while capital rotated into other stocks. Everyone needs a rest sometimes, right?

The portfolio had a SOLID day, lead by HOOD & GEV. In the Trading Room, we added META - a strong liquid AI stock.

What’s not to like about today? An ugly morning turned to a strong rally.

The action was very positive, and we eagerly await to see if the indexes can break out of this multi-week digestion.

I like the resilient, bullish price action we’re seeing in the indexes, and tonight we’ll review:

Our top focus stocks for exposure if we get the move we’re anticipating
RS Leaders list
Market breadth, indexes & levels
Portfolio review

& more! Let’s go.

QQQ

The QQQ came down to test the 10 EMA before rebounding powerfully, even taking out Friday’s high—a fantastic response to early weakness.

I was impressed by the 10 EMA hold on Friday, as bulls stepped up and took control.

The next key level for this index is a breakout above 527, which would open the door for a test of the highs.

As long as the indexes keep holding their moving averages, and STOCKS continue to look good, I’ll lean bullish on this market, especially as we see big caps starting to perform much better.

SPY

The SPY posted beautiful recovery hammer candle and looks well-poised to break out of this descending trendline setup, heading toward prior highs.

The first step is a breakout above last week’s high, followed by a breach of the trendline.

The index has been consolidating for a couple of weeks, taking a well-earned rest.

IWM

The IWM continues to flag sideways, finding support at its 21 EMA.

This key level has held throughout the uptrend, and bulls need to see it hold here.

Price action remains very tight, and I’m waiting to see if we’ll get a breakout above the descending trendline.

Gold

Gold has chosen its direction, breaking out today from a clean descending trendline setup, following an inside day.

We’ll closely monitor whether sustained strength in gold negatively impacts other parts of the market.

That was a solid setup in the making.

Bitcoin (long)

Bitcoin is hovering very close to 21 EMA support.

I’m giving some room to this position, letting it work, as it has significant support just to the left on the chart.

I’m watching to see if we can turn back up and recapture the moving averages, triggering an Oliver Kell wedge pop.

I’ve now raised my stop to 92,000 on all positions.

USD

The dollar continues lower, looking ripe for a test of its recent low. It may find support, but the trend is definitively down as it loses the short-term moving averages.