Markets on Fire: Bulls Take Charge as Strength Broadens Across the Board

But will the extended indexes spoil the party and shake the tree?

Key take-away: Things can go from bearish to bullish quickly; remain flexible, be ready to change your mind with PRICE.

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Another day, another fresh high!

The market is HOT, and Tuesday’s shake was not enough to de-rail the freight train, despite leaders coming under pressure.

My nightly scan left me pleasantly surprised—there’s a proliferation of high-quality setups lining up for next week, a strong clue that this rally might still have plenty of gas in the tank.

HOOD stole the show this week, emerging as our top performer, with crypto on the verge of what could be a major move. It's thrilling to see so many sectors firing on all cylinders.

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So who will be victorious— the strong stocks and setups, or the will the extended indexes lead to another pullback?

Yes, the market is stretched—but any pause or pullback from here has me fired up.

The next wave of opportunities could be even better….

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Tonight, I’ll be breaking down:

• The surprising abundance of setups for Monday

• Setups vs extended QQQ—how to manage this tricky situation

• Refreshed watchlist with new leaders

• Hot themes, leading sectors

• Portfolio review

• Video/chart analysis

Let’s go!

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QQQ

A very nice week in the QQQ, which saw new all-time closing highs and some stellar price action that continues to ride above the 5 SMA—an ultimate sign of strength.

Tuesday’s uncomfortable shakeout was short-lived as price came surging back to highs.

Here is where things get tricky—we are sitting at quite extended levels and are more than 6 ATR above the 50-day moving average. 

We’re also touching the upper Keltner Band, which we’ll see in our market indicator.

I’m by no means calling a top in this rally, just highlighting the current risk/reward scenario we must consider at these levels.

It’s going to be tough to add much exposure here, as any market pullback could result in immediate stop-outs. I’m planning to stay on high alert.

The 65-minute chart: Beautifully riding the moving averages

SPY

SPY had a groundbreaking week, finally breaking through to a new all-time high.

We’re seeing a very strong trend here, as price continues to ride the rising 5 SMA.

We’ve now gone straight up for over a week and a half, so it would be perfectly normal to expect some digestion soon.

It’s important to simply react to the market rather than trying to anticipate anything.

That’s why we’ll continue to let our positions run and keep exposure on, rather than front-running a pullback.

We’re in blue skies now—let’s see where this trend can take us.

IWM

IWM had a fantastic week, breaking out through the 216 level and now charging toward next resistance around 230.

We’re seeing some volume come into this index, and the participation of small caps significantly improves overall market breadth.

This index has underperformed for so long that it would be great to see a durable trend develop.

Pullbacks are certainly buyable across all indexes right now, as the trends remain very strong.

ARKK

ARKK continues to show strong momentum as it trades at 52-week highs.

The weekly chart shows it has emerged from a beautiful Stage 1 base and may be just starting a new trend. I’m patiently stalking this for a pullback entry.

Gold

Gold is hovering around a major support zone that has developed near the 50-day and 10-week moving averages.

Things could go either way here—either we reclaim the averages and break higher, or this is just a small bear flag rally before another rejection. A very easy sit-out situation for now.

Bitcoin (long)

Bitcoin tested our patience over the past week and a half, but that’s finally paying off as we’re seeing the makings of the breakout we’ve been waiting for.

While the move is looking promising, the key will be a breakout over the June high of 110,700.

That level would open the door to a run at prior all-time highs, where resistance could emerge. It’s important to remain flexible and let the market confirm.

This breakout looks good—but it’s just noise until we clear all-time highs. We’ve got a position—now it’s time to let the market decide.

USD

The dollar continues to show weakness, although it did attempt a bounce before getting rejected at the declining moving averages.

TNX

The 10-year yield showed some strength late in the week, bouncing from the support zone marked on our charts and heading toward the trendline to test a potential breakout.

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Our market indicator

Remains on a GREEN signal.

Persistent strength in this market, that’s for sure.

Something to be aware of: We are back at the upper band, and once again 6 ATR from the 50-day moving average. This extension is noteworthy, but doesn’t mean we can’t see higher prices. 

I’d like a rest here.

Qullamaggie indicator

Our Qullamaggie indicator remains RISK ON.

Markets continue to enjoy another block of healthy action as we trend higher on a green, risk-on signal. Blue skies ahead—and remember: never fight the trend!

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