“Nothing is permanent in this wicked world, not even our troubles.” - Charlie Chaplin

A few highlights from today and the weekend.

Catch up on everything else here:

Hello, my friend. I hope this finds you in exceptionally good spirits this summer weekend.

All things considered, the stock market continues to hold up remarkably well, even as many investors periodically check their portfolios between summer vacations.

Last week brought another collection of challenges:

• Reversals in leading semiconductor stocks

• Higher Treasury yields

• Renewed difficulties with Iran

• Sharp swings in oil

And what happened?

The dip buyers showed up. Again.

Reflecting the summer hammock pattern like the photo above:

The S&P 500 and Nasdaq Composite finished higher as investors continued buying weakness across AI-related technology and mega-cap growth stocks.

Once again, one down week was followed by two advancing weeks, just as we saw in June, keeping the higher trading range intact.

Beyond the S&P 500 and Nasdaq, the Dow, small caps, mid-caps, and several economically sensitive sectors were weaker by comparison.

Despite that uneven participation, the market passed several important tests.

Stocks absorbed:

• Renewed geopolitical escalation

• An eight-basis-point increase in the 10-year Treasury yield

• Sharp semiconductor profit-taking

• Higher oil prices

• Multiple attempted technical breakdowns

And still avoided meaningful technical damage.

The S&P 500 remained above 7,500. Semiconductors stabilized. Failed breakdowns attracted buyers. Momentum and swing systems returned to buy signals.

Most importantly, price is now sitting directly at resistance.

The S&P 500 closed Friday at 7,575, two points beneath the lower boundary of the decisive 7,577–7,620 resistance zone.

In sum, price action is beginning to improve within this period of consolidation.

The next step is to prove that improvement can hold and develop into the next leg higher.

Performance Matrix

The tables below show where the money went, where it refused to go, and which trends are doing more than merely surviving.

This week’s message is fairly clear.

Mega-cap growth and AI leadership took back control, with Meta and NVIDIA doing most of the heavy lifting. Energy, oil services, commodities, agriculture, and selected international markets also joined the party.

Several speculative and economically sensitive groups were not invited.

Cannabis, space, lithium, airlines, homebuilders, and alternative energy remained under pressure.

So yes, this was a risk-on week.

It was not a buy-everything-with-a-ticker week.

Capital continued rewarding established leadership, improving trends, and price action already supporting higher prices. Weak structures were still punished without much sympathy.

That is why these tables matter.

The S&P 500 may be testing resistance, but beneath the surface, stocks, sectors, industries, and asset classes are already placing their bets.

Let’s now review the setup at resistance, the three forces likely to determine the next move, what would signal a bull trap, and how I am positioning around the consolidation.

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What doesn’t kill you makes you stronger.

Except bears.

Bears will kill you.

A few clippings from today’s notebook:

Please click on those of interest to read the full note!

These were only 5 of the 22 notes I posted since yesterday.

See the rest!

Remember, always focus on what you can control.

Then let the charts decide the rest!

These were only 5 of the 20 notes I posted since yesterday.

See the rest!

As markets continue their consolidation ahead of the start of earnings season, there were a few things that caught my attention today. Enjoy!

These were only 5 of the 13 notes I posted today. See the rest!

Something to keep in mind… Most active investors do not lose because they lack effort. They lose because they are active at the wrong times.

There is a big difference between being prepared and being busy.

Prepared investors wait for the right environment. Busy investors chase every move.

The market does not reward activity by itself. It rewards alignment to the price action, execution, and risk management:

When these line up, press.

Environment
Trend
Leadership
Setup
Risk
Execution

When they do not, protect capital.

Due to popular request, starting today I’m sharing a few of the more interesting notes I post each day along with, in time, some additional other goodies. Enjoy!

A price action study suggesting a positive first half from end of June weakness:

The short-term price action in the S&P 500 lays the foundation for not only a retest of the June high but a new high at 7,766 as we review in the weekend report:

Buy the dippers attempt to set another bear trap in the Semiconductors today:

Tonight’s update from Q, my AI agent in training (should I continue sharing these?):

These were just 4 of the 12 notes I posted today. See the rest!

I hope you had a wonderful Independence Day weekend.

We enjoyed a good holiday filled with food, friendship, and meaningful conversations. My wife and I also celebrated our 33rd anniversary, even though it still feels like yesterday that we were beginning our life together.

Each year, on our anniversary, we watch the video of our wedding ceremony. It is a good reminder of how quickly time moves and why it is important to step away, reset, and keep perspective.

The market is important, but it is not everything.

Time away gives us a chance to return with a clearer mind. Be sure to make time for it before the summer ends. The market will still be there when you return.

As we prepare for the week and month ahead, I have a few thoughts to share about the market, the opportunity, and the discipline this market will likely require.

The Bottom Line

The market continues to consolidate constructively through time, rotation, and dispersion.

Last week brought meaningful profit-taking in leadership stocks, especially across semiconductors, AI infrastructure, mega-cap growth, and the broader AI trade. After the historic run those areas have had, that reset looks more necessary than alarming.

The more leadership stocks consolidate before earnings season, the lower the risk of significant “sell the news” reactions. If expectations cool and positioning resets now rather than later, good news has a better chance of being rewarded.

For now, the price action still looks more like consolidation than distribution. The market appears to be building a higher base of support that could help extend the uptrend this month, especially if money rotates back into mega-cap growth and AI leadership.

Until price proves otherwise, the market has earned the benefit of the doubt.

Key Takeaways

• The market is digesting a strong two-month run without breaking trend.

• Profit-taking remains concentrated in the most extended leadership areas.

• Capital is rotating rather than leaving the market, which keeps the broader setup constructive.

• Dispersion is increasing, so stock selection, entry points, and risk control matter more.

• If support continues to hold and leadership stabilizes, the odds still favor an upside breakout this month.

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It is good to see you my friend. I hope this finds you doing well this holiday weekend.

Let’s take a moment to review where markets currently stand three weeks after the historic winning streak ended in the S&P 500.

The Bottom Line

The market is consolidating through time and rotation rather than through price. As we’ve seen numerous times, this is bullish until proven otherwise in this bull market.

Sellers have had numerous opportunities recently to take control, including after the Fed meeting, but buyers are not slowing or halting their buying of every minor dip.

Price is consolidating and coiling inside June’s high and tight trading range, with leadership, breadth, and momentum still favoring higher prices.

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Hi friend!

I hope you are well and enjoying the summer so far. Thank you for giving me another opportunity to share my thoughts as we prepare for another big week!

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The Bottom Line

The S&P 500’s historic 9-week, 20% winning streak ended last week with a successful bull-trap reversal.

That does not break the longer-term uptrend. It simply confirms that the market was extended and due for some profit-taking, risk repositioning, and consolidation.

The sellers finally landed a punch on Friday. Now they have to prove they can keep the pressure on for more than one day and take out the support levels below.

Until they do, the benefit of the doubt still belongs to the persistent dip buyers and the longer-term uptrend.

This week brings several potential sell-the-news catalysts, including CPI, PPI, Oracle earnings, Adobe earnings, Apple’s WWDC, and last, but not least - the SpaceX IPO. In the following week, markets will focus on the first Warsh Fed meeting.

The plan is simple: tighten the short-term risk plan, respect the longer-term uptrend, and make sellers prove they can do more than create a one-day scare.

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The Bottom Line

After eight straight weekly gains, the S&P 500 still has price-action support for higher highs, but the next phase depends on whether buyers can sustain the breakout, absorb rotation, and keep shallow pullbacks well-contained.

Eight-Week Streak Deserves Respect

I’m sure you’ve heard that markets climb the wall of worry.

For this market, it has been a long, steady, and historic climb lasting 8 straight weeks and gaining +17.3%. Persistent strength like this has been seen only twice this century and only nine times in total since 1950:

As this study shows, forward performance following these winning streaks was strong:

• Positive 8 out of 9 times, or 88.9%, one month later

• While the average 1-year gain was slightly less, 5 of the 9 times it was larger

• Maximum drawdowns were modest with one exception - the 1987 crash (-20.7%)

The main takeaway is that what we have seen since the March low remains bullish until price action proves otherwise.

By another measure, this also ranks as the 20th strongest rally since 1950:

I share these studies for context, not certainty. The sample sizes are small, and we should always be careful about overfitting market history.

But the message is still useful: rare strength often leads to more strength, as long as price action continues to confirm the setup.

New Bullish Play

After capturing its two targets in the S&P 7,400 target zone during the seventh week of this winning streak, the post-target consolidation lasted only three days ending last Tuesday.

Like so many dips during this rally, the three-day pullback was limited to -2.4% before buyers stepped in.

As I shared in the notes, the short-term price action was easy to read and evaluate.

A new short-term bullish reversal play formed, triggered, and then followed through last week. This new play successfully filled the May 15th gap before pulling back. More importantly, it also laid the foundation for a potential move toward S&P 7,533 and 7,575, or roughly +0.8% to +1.4% higher.

This shows the value of seeing periods of consolidation and minor dips along the way.

As long as the -2% to -3% dips continue to get bought, the path of least resistance is higher as strength continues to beget more strength.

This week, the key short-term test is straightforward: can the S&P 500 sustain a breakout above the May high at 7,517, or does it break below last week’s low at 7,333?

On a measured-move basis, a confirmed breakout would target 7,701, while a confirmed breakdown would target 7,149.

On a short-term basis, more sideways consolidation is always possible after a move like this. If there is a sustained break below last week’s low, I will also be watching to see if the rising 21-EMA provides trailing support above the first Fibonacci retracement:

As long-time subscribers know, I have more confidence that a longer-term target will be captured sooner than later when short term bullish price action plays have also laid the foundation to, or just above, the same level.

Right now, both the short-term and longer-term price-action foundations are pointing in the same direction: higher. The highest potential target is now 7,701, roughly +3% above current levels. If reached, that would also fulfill the final longer-term range-breakout target at 7,688 from the March pullback:

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“You can't hit a target you cannot see, and you cannot see a target you do not have."
- Zig Ziglar

The Price Action

For the S&P 500 (and Nasdaq Comp.), the rally continued for its 7th straight week.

For the others, not so much:

At least for the S&P 500, the index we focus so much of our time and attention upon, it has proven to be a highly unusual period of persistent strength seldomly seen for most of us during our lifetime:

This price study, like many I have seen, evaluated and shared in my notes, reflects the market’s potential for the uptrend and price action strength to continue.

This is undeniably, an attractive risk/reward setup.

Especially when there is the price action foundation laying the path higher for longer and price action plays consistently play out successfully.

Two Target Captures

In the past week alone, the S&P 500 captured its next two out of three target objectives.

The first was the this year’s Fibonacci extension target at 7425 last Monday:

The second target was the long-term range breakout target at 7459 formed by last year’s -19% correction, then v-shaped recovery and sustained breakout that has been in our crosshairs since last June:

Third Target In Play

This leaves this year’s range breakout play targeting 7688 in focus.

This target (as shown in the chart above) was constructed by the size of the trading range formed by the -9% pullback in March and then extremely fast, three week v-shaped reversal and breakout above S&P 7002. This provides a measured move target which is +3.78% above last week’s close (5/15/26).

A target which is likely to be captured in the continued absence of strong and sustained price action deterioration showing increased vulnerability at these higher highs.

Before rallying up above 7500 for the first time ever last Thursday, the only minor dip we saw was on briefly on Tuesday morning which was bought very quickly and aggressively:

To be fair, options expiration Friday played out differently.

Stocks gapped down at the open, attempted to rally, but failed to bounce back. Uh-oh!

What has resulted is a potential shooting star formation on the weekly time frame. Even though these shooting stars usually end in a red candle representing a down tick versus a modestly positive one like last week. But, nevertheless still worth keeping an eye on. At least to see if there is any follow through confirmation.

Needless to say, a one day reversal (and its impact on the weekly candlestick), on options expiration Friday, which is well-known for its fake outs, false moves and unreliable price signals, does not indicate it is time to sell and run for cover.

Let’s take it one day, one week at a time, and avoid overthinking it.

What About Bad Breadth?

Additionally, there has been, and continues to be, a tremendous amount of worry the major market-cap indexes do not reflect the entire market and that, upon closer inspection there is more underlying weakness than this persistent rally indicates.

This is why many active investors keep close watch on breadth showing how many stocks are participating in the move. The more strength the better. There is plentiful research backing that view. Additional, there are studies if you want to find them, which surround many of the positive price action studies into question.

For example, the following study I shared last week in my notes:

Yet, all conditions like this require price action to confirm them for them to become actionable. Even in the study above, the worst performing periods which follow saw price begin to confirm the vulnerability before largest declines followed.

Other times, not so much. And, that’s the point!

If these bad breadth warnings are accurate, we will start seeing price action showing it through bull trap reversals lower lows, lower highs, and trendline breaks. Periods in which the selling lasts for more than a few, very brief hours.

None are present at this point.

Only consistently persistent, positive price action instead.

So, bottom line, we will focus on the price action as priority, even if it only reflects fewer and fewer stocks at the index surface due to the market cap construction.

The bullish price action foundation is in place laying the foundation +3.78% higher.

At least until price action proves otherwise.

Probabilities & Positioning

On balance and, in consideration of everything I’ve seen combined with the research I’ve undertaken in the past week, probabilities favor…

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The Bottom Line

The S&P 500 did what we were looking for it to do.

It pushed into the 7,400 target zone, closed near another all-time high, and extended its winning streak to six straight weeks.

That is not just a strong rally.

It is a historic, rare bullish winning streak in both size and speed.

Six weeks ago, the challenge was believing what the price action was starting to show. Many investors were short, sidelined, hedged, or still anchored to the prior weakness.

As usual, the price action changed first.

Then came the follow-through.

The investors who stayed aligned with the price action, played the bear-trap reversal, and added exposure along the way were rewarded quickly. The investors who did not are now trying to catch up, often by taking on more aggressive positioning.

Now the challenge is different.

The believers have profits to protect. That means raising stops where appropriate, respecting support, and watching for deterioration in price action, leadership, and trend structure.

The non-believers have underperformance to repair. That means owning the mistake, forgiving themselves, and building a path to get realigned without chasing emotionally after a historic move.

It also means not fighting the trend without price-action support.

Recently, even the chasers have been rewarded.

Maybe too well.

That is where the next risk begins to form.

A rally that began with many investors offsides can eventually pull those same investors too far in the other direction. Too bullish. Too leveraged. Too concentrated. Too willing to take risk after the market has already delivered a major move.

The largest short-term losses can often follow the largest short-term gains, not because strength is bearish, but because discipline often weakens after success.

The market has earned the right to consolidate. Historical studies following winning streaks like this suggest short-term gains often slow, pause, or give way to rotation.

That does not mean the rally is broken.

It means the market may need time to digest the advance.

Winning streaks do not automatically create major tops. Large upside moves usually become dangerous only when the foundations supporting them begin to break.

That is what matters now:

Price action. Trend. Support levels. Leadership behavior. Earnings. AI leadership. Reactions to good news.

If those foundations remain intact, consolidation should be treated as normal market activity, not the beginning of a major top.

What Happened Last Week

The S&P 500 and Nasdaq were helped by three large gap-higher opens on Tuesday, Wednesday, and Friday. That matters because it shows how aggressively investors were repositioning after stronger earnings, better economic data, and improving confidence in the outlook.

The simple read is this: the uptrend remains intact.

But there’s much more to it than that.

It is a full-court press to reposition after stronger earnings, better economic data, and a better-than-feared outlook.

That matters.

Not because the market is risk-free.

It never is.

But because the price action, the patterns, and the overall trend remain constructive, and the conviction behind this strength has been renewed.

The 7,400 Target Zone Has Arrived

The S&P 500 has now reached the 7,400 target zone.

It briefly touched that area Friday afternoon before ending the week near 7,398.

This target area has been on our radar since June 2025, when the long-term range breakout first put the 7,459 target into play. The following is the chart I shared previously:

Now, we are there.

After the first-quarter volatility, the S&P 500 is in trend-extension mode.

The current bullish price-action foundation has put three targets in play: 7,425, 7,459, and 7,688, which are +0.37%, +0.83%, and +3.93% from the last week’s close.

All three targets are within reach given the strong and sustained upside follow-through over the past three weeks. I currently assign a high probability that all three targets are eventually captured.

The only real question is when the market gets there and what path it takes.

As for support, the recent highs, lows, and three lower gaps from this month are all areas of interest. A throwback retest of the 7,002 to 7,202 area would likely be defended if tested.

The 21-day EMA is currently near 7,133 and should climb closer to 7,200 by Friday.

Potential Paths

A controlled pause around the 7,400 level would allow the market to digest gains, reset sentiment, rotate leadership, and create better entries.

That would be healthier than another vertical move that pulls too many investors into risk at the wrong time.

The point is not that upside is bad.

The point is that the quality of the upside matters.

A steady advance with rotation is healthier than a vertical move driven by urgency, FOMO, and leverage.

Without some consolidation and rotation along the way, the risk of a blow-off style advance increases. That would not necessarily be a problem immediately, but it could lead to a longer and more frustrating consolidation later.

That is not the base case yet.

It is simply a scenario worth respecting.

Under more normal market conditions, probabilities would mostly favor consolidation near the three targets in the 7,400 target zone.

But these are not normal market conditions.

They are extreme.

With so few comparable historical examples, the message is to remain open to multiple outcomes.

Put simply, this market has gone a little gonzo.

By that, I mean wild, extreme, and willing to stretch normal expectations.

Unless something new and unexpected alters the setup, price could move through these targets and get even more extended.

What Generates Sell Signals?

Price-action deterioration generates sell signals.

You know the drill by now.

Sell signals come from bull-trap reversals, failed support tests, lower highs, lower lows, and sustained downside follow-through.

We have none of those currently.

Yes, the market is extremely overbought.

Yes, it looks overcooked, especially in leadership areas like semiconductors and memory stocks.

But strength alone is not a reason to sell or short.

Strength is a reason to stay aligned with the trend until price action changes.

As I often say, “Make hay while the sun is shining.”

The sun is not only out. It is running at full strength right now.

This is a time to stay right if positioned right.

If you want to short, be patient until price action shows real deterioration.

If you are not positioned well, the job is not to chase emotionally. It is to look for opportunities to correct that mistake when price action offers a better entry.

Our Job Now Changes

Now that we have entered the S&P 500 7,400 target zone, the job changes.

We are no longer asking whether the market can get there.

It already did.

Now we are asking what the market does after arriving.

The questions are straightforward:

1. Do we see consolidation now or later?

2. Do any of last week’s three large unfilled gaps get targeted?

3. Does strength broaden beyond the AI-driven leadership groups?

My current view:

1. Consolidation is likely from the S&P 500 7,400 target zone.

2. Last week’s lower unfilled gaps are logical targets if selling begins.

3. A broadening rotation would be healthy and would help reduce blow-off risk.

That said, the mistake would be treating 7,400 like a hard ceiling.

The other mistake would be ignoring how far and fast price has already traveled.

The better approach is to let the market show us what this area becomes.

If the market does not pause, the 7,688 target remains in the crosshairs.

That is not prediction.

That is process.

For subscribers, the next question is how to manage this target zone, what would actually trigger sell signals, and which bull, base, and bear paths matter most from here.

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