Market roars back: Rally ignites leaders - new highs incoming?

Setups emerge again, tracking today's breakout's performance to assess situational awareness - EAT CEG CRDO CRWV

Key takeaway: If your stock is acting fine above a rising 10EMA, leave it alone!

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Friday’s woes are shaken off for now`—could we see more highs tomorrow?

The market delivered an impressive rebound from last week's turbulence, shrugging off geopolitical tensions with a powerful rally.

Our portfolio saw strong gains, with all positions firing, and there's potential to increase exposure tomorrow.

By evaluating each chart on its own merits, I avoid letting external noise disrupt my trading plan, preventing premature selling.

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In the Trading Room, I discussed how we MUST track today’s breakout moves in the coming days, to assess feedback in real time.

Wednesday’s Fed meeting looms, but could it be another non-event? Maybe.

The action today suggests to me the market wants higher prices, but I’ll let the market decide.

Tonight, I’ll look at:

• Key index levels, resistances

• New setups for tomorrow

• Using SA to determine market health

• The watchlist, unpacking the positive action

• Market Breadth, Internals - a nice snap back from Friday’s selloff

• Hot themes, Portfolio review

Let’s dive in!

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QQQ

After losing the 10 EMA on Friday with elevated volume, a test of the 21 EMA seemed likely.

However, the QQQ roared back today, reclaiming its position above the moving averages.

This robust response to a volatile, news-driven week underscores the market’s resilience.

Could Friday’s shakeout have been the final dip before a push toward all-time highs?

After trading flat last week, the index looks primed for an upward move, with leading stocks signalling this potential.

SPY

The SPY also rebounded sharply from Friday’s distribution day, snapping back above its moving averages.

While leadership stocks are showing strong price action, the accumulation of multiple distribution days across the index warrants caution.

For now, the market appears unfazed, with leaders driving constructive action.

The next target is the all-time high zone.

IWM

The IWM found support at the 21 EMA after Friday’s pullback, following a swift three-day decline last week.

The next step is for small caps to reclaim the 10 EMA and push toward the 200-day moving average.

Small caps have shown promise recently, and now it’s time for them to prove themselves.

ARKK

ARKK exploded off its rising 10 EMA, hitting new highs in this rally attempt.

Its top holdings, many of which are market leaders, are powering this move.

I’ll be watching for a potential handle formation or pullback as it approaches 68. Currently, it’s too short-term extended to act on.

Gold

Price action tells the story.

As political tensions between Israel and Iran semm to cool slightly with talk of deals, gold posted a bearish engulfing candle.

Does this suggest improving prospects for peace? The 3450 level was briefly breached before reversing, possibly reinforcing this view.

Bitcoin (long)

Bitcoin delivered exactly the response we wanted, powering back through its moving averages.

Our stop loss was narrowly avoided on Friday, with the 50-day moving average holding firm, followed by tight price action.

Was Friday’s shakeout the catalyst for a move higher? Possibly.

With some cushion restored, let’s see if a meaningful advance materializes.

USD

The dollar continues its choppy downtrend, leaking lower from prior support levels.

TNX

The 10-year yield is holding at the 50-day moving average. We’ll see if it resolves higher or not.

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Our market indicator

Flips to a YELLOW signal.

Net highs come back in which is great to see. NCFD remains sold down, so there’s potential for higher here.

Qullamaggie indicator

Our Qullamaggie indicator remains RISK ON.

As seen in late May, a one-day pullback followed by a swift shift to a green, risk-on signal, which is exactly what we want.

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