Also, the cumulative return of our real-time Chart Trades Live dashboard — tracking chart trade ideas with entries, stops, targets, and rules-based performance — reached a fresh year-to-date high this morning. See more below.

Have a great weekend. Best, Frank

Monday - Week of 7/13/26

XLF vs. SPX
XLF has noticeably outperformed the SPX ever since snapping back from a deeply oversold relative condition a few weeks ago. While the prior two relative rebounds didn’t identify the exact low as well as this one has so far, both were followed by months of outperformance versus the broader market—in 2020 and again in 2023. That’s the blueprint we’ll be watching for again this time.

Tuesday, 7/14 - An Important Comparison

XLE Energy
XLE’s strong move yesterday accomplished three important technical developments: it negated the bearish pattern, closed (slightly) above its 50-day moving average for the first time since early June, and completed a bullish pattern breakout.

The ETF still has a meaningful amount of overhead supply from the April through June trading range to work through, but this is how trends begin to reverse. The next step is straightforward: hold the breakout, generate additional follow-through, and begin building a larger bullish pattern.

We know the recent move has been headline-driven, but how this comeback unfolds from a price action and pattern standpoint still will matter.

Wednesday, 7/15 - Hovering Near the Highs

EWC Canada

Zooming out, it’s clear how well EWC has repeatedly used multi-week and multi-month consolidation phases as launching pads over the past year. Each pause has allowed the ETF to regroup before eventually breaking out to new highs.

Despite all of the recent volatility, EWC is still essentially unchanged since its February peak. That extended sideways move has created the potential for another sizable base, which could serve as the foundation for the ETF’s next advance if buyers can finally generate sustained follow-through.

Thursday, 7/16 - Tops vs. Bottoms

SPX - Still no 1% Moves

Here’s an updated table of the rolling monthly 1% moves for the S&P 500, covering 2025 and 2026. Again, July has yet to produce a single 1% move. Ironically, July 2025 also finished with zero 1% moves for the entire month.

That’s particularly noteworthy because July is both a summer month but also in the heart of earnings season. Thus, July’25 quiet trading was very unusual, especially considering it marked the first calendar month without a 1% move since December 2019.

This July has already featured two key inflation reports, ongoing geopolitical headlines, and significant moves in several mega-cap technology stocks. Yet, despite near-daily sector rotation, volatility has remained remarkably subdued.

That could change quickly, of course, but after a volatile June, this has been the best-case scenario so far. The next step is seeing the bullish patterns we’ve been tracking finally break out with conviction.

Friday, 7/17 - The Wishbone Market

SMH - Monthly RSI

Despite the volatile trading over the last two months, SMH’s monthly 14-period RSI remains overbought. As we’ve shown before, the rally from the April 2025 low still had room to match both the magnitude and duration of prior monthly overbought readings—and it ultimately did.

History also shows, however, that once the monthly RSI exits overbought territory, it has typically been followed by months of sideways-to-lower price action. That doesn’t mean it has to happen immediately, but at some point that historical tendency could come into play again.

Chart Trades Live just hit a new YTD high

As mentioned above, the cumulative return of our real-time Chart Trades Live dashboard — tracking chart trade ideas with entries, stops, targets, and rules-based performance — reached a fresh year-to-date high this morning.

Many of our trade ideas are based on multi-week or multi-month patterns, while others are longer-term plays. One example is ADM, which has been on the ledger since March 2. After a non-damaging pullback in June, the stock has bounced back well in July, keeping the broader bullish setup intact.

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Why This Setup Deserves Attention

Ever since the S&P 500 pulled back in early June, we’ve been tracking several potential bullish continuation patterns. At multiple points during that pullback, buyers had opportunities to regain control and confirm one of the bullish formations we’ve been discussing over the past six weeks.

Today, three potential bullish patterns remain in play, although none has been fully confirmed. We continue to believe they have a favorable chance of resolving to the upside.

That said, it’s equally important to consider the alternative.

Rather than focusing solely on what could go right, it’s worth asking what the market might look like if these breakout attempts ultimately fail.

A Familiar Look From Late 2025

Looking more closely at the current setup, there are notable similarities to the pattern that developed in late October 2025, shown in the chart above.

At that time, the market rallied sharply, driven largely by large-cap Technology, as several mega-cap companies surged following earnings reports.

The rally, however, was short-lived.

Selling pressure quickly emerged, leading to a pullback that lasted through mid-November. Similar to today’s environment, buyers then stepped back in aggressively, fueling a sharp rebound that carried the S&P 500 back to its prior highs.

From there, the index made multiple breakout attempts throughout December, January, and February. Each attempt failed to generate enough buying pressure to sustain new highs.

Although the S&P 500 managed to hold near resistance for several weeks, momentum gradually deteriorated before the market finally rolled over, setting the stage for the decline that ultimately bottomed in late March.

There are no signs that this same outcome is unfolding today.

However, the current rebound is beginning to resemble what developed during mid-December 2025, making it an important historical comparison to keep in mind should today’s breakout attempts lose momentum.

SPX vs. Technology Leadership

The primary reason the market rolled over late last year was that the strong outperformance from large-cap Technology simply came to an end, as shown by the XLK/SPX relative strength line peaking alongside the S&P 500.

That development proved to be more significant than it initially appeared.

Technology’s relative weakness persisted through the early part of 2026. Eventually, the S&P 500 followed suit, and the broader market correction unfolded.

Today’s environment shares some similarities.

Large-cap Technology experienced an even more pronounced period of parabolic outperformance before peaking in late May and early June. Since then, the S&P 500 has traded sideways, remaining remarkably close to its highs despite significant rotation beneath the surface.

Meanwhile, the XLK/SPX relative ratio line has begun producing a series of lower highs and lower lows over the past several weeks.

The key question now is straightforward:

What catalyst, if any, could cause the S&P 500 to finally follow Technology lower, similar to what occurred from February through March earlier this year?

So far, that hasn’t happened.

But it remains one of the most important relationships to monitor.

Breadth Has Been the Difference

The third chart helps explain why this market has remained so resilient.

Strong market breadth—healthy participation across sectors—was a major reason the S&P 500 was able to recover and remain near its highs from November 2025 through early February 2026.

When the advance-decline line peaked, however, the character of the market changed dramatically.

Even though the XLK/SPX relative strength line began improving in early February, it wasn’t enough to offset the steady stream of negative breadth days that developed over the following four weeks.

In other words, Technology leadership alone couldn’t overcome broad market deterioration.

Today, the picture looks very different.

The advance-decline line bottomed—or, more accurately, made a higher low—in mid-May and has been trending higher ever since.

That improvement in participation has been a major reason the S&P 500 has remained so close to its highs despite Technology’s recent period of relative weakness.

In many ways, breadth has become the market’s shock absorber, allowing rotation beneath the surface without causing widespread technical damage.

The Bottom Line

At this point, healthy breadth remains the primary factor keeping the market resilient and all three bullish patterns alive.

As long as broad participation continues to improve, the odds still favor an eventual breakout to new all-time highs.

The key question is whether this time can be different.

Can Technology stabilize while market breadth remains strong?

If so, the market may continue absorbing the recent rotation and eventually resume its longer-term uptrend.

If not—and the rest of the market begins to experience the same degree of profit-taking that Technology has already seen—we could eventually find ourselves in another corrective environment, similar to the one that developed from February through March earlier this year.

For now, breadth remains the key bullish offset to Technology’s recent weakness. Whether that relationship continues may ultimately determine which direction the S&P 500 breaks next.

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Monday, 7/6

SPX Cumulative Advance Decline Line
The consistent positive internals over the last month have continued to pull the cumulative advance-decline line higher. Last week, it blasted to new all-time highs, even as the SPX has stalled.

Again, this is the very scenario we had been looking for if and when we finally saw profit-taking in the areas that had gone parabolic through May.

The next step? Seeing various areas take the leadership baton, allowing this to remain a healthy, broad-based advance, and not reliant on the biggest names to hold things together…

Tuesday, 7/7

BBY– BestBuy Co, Inc. (Chart Trade Idea)

BBY had a huge reaction to earnings back in May. Since then, the stock has held above that sizable gap, but it has yet to make much headway beyond the initial surge, which stalled near the 78 level.

Over the last six weeks, though, BBY has traced out a potential bullish cup and handle pattern, which it is now very close to completing. A breakout above the 78 zone would trigger the pattern and create an initial measured move target near 88. A stop loss at 74 would help define the risk.

Wednesday, 7/8

XBI vs. 200-DMA
XBI Biotech had another strong session yesterday, gaining 1.9% and moving even closer to its early 2021 highs. Needless to say, the ETF is also becoming extended above its 200-day moving average. It now sits about 32% above the 200-day, not quite matching the late 2025 extreme (35%), but getting close.

As is clear, the late-2025 advance continued to accelerate even after reaching similarly stretched conditions, producing higher highs and higher lows, albeit with increasingly jagged price action. Thus, given the magnitude of the current rally, it wouldn’t be surprising to see a pause from a longer-term perspective.

For context, during the parabolic COVID-era advance into February 2021, XBI peaked at roughly 44% above its 200-day moving average. There’s still room before reaching that extreme, but after the latest surge, some digestion would be a healthy development.

Thursday, 7/9

LIT Lithium
LIT has now pulled back to its 200-day moving average for the first time since last summer. At the same time, it is testing key support near the 70 area, highlighted in yellow, which also coincides with the 38.2% Fibonacci retracement of the entire April 2025 through May 2026 advance. The two-plus-month decline from the May high has also pushed the 14-day RSI close to oversold territory, its lowest reading since last April.

Taken together, these technical factors create a meaningful confluence of support. While additional weakness is always possible, the current setup offers an attractive risk-reward profile from a mean-reversion perspective.

Friday, 7/10

DJIA vs. SPX
The DJIA is now overbought on the monthly chart for the first time since late 2024. But like RSP, the DJIA/SPX relative ratio has been making lower highs for years. So far, that has yet to change. (This was one of 30 charts from a special Chart Rundown note.)

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TLDR for today’s note:

Daily Price Action: SPX closed above its intraday midpoint for the 6th straight session.

SPX Patterns: The 7,680-bull flag target remains alive, while the bearish diamond pattern has now been officially negated.

Potential Bullish Pattern: close to triggering.

GoNoGo: A new short-term buy signal triggered for only the 2^nd time since late March.

Rotation: Tech continues to lead on days with weak breadth, while broader participation has come when non-Tech sectors have led.

IGV Software: Nearing an inverse head-and-shoulders breakout.

MAGS: Has formed a potential inverse head-and-shoulders pattern after negating a much larger bearish setup.

FDN & SKYY: Both are approaching similar bullish breakout patterns, reinforcing the improving backdrop for growth.

VTI & IOO: Building bullish continuation patterns near their highs.

ARKK: Attempting a major 10-month breakout on the weekly chart.

Chart Trade breakdown: PANW

Key Points
The S&P 500 notched its fourth gain in the last five trading sessions on Monday and, as a result, is now very close to completing the bullish cup and handle pattern we’ve been profiling over the last few weeks. More importantly, a number of key ETFs are on the verge of doing the same, reinforcing the improving technical backdrop. We’ll review several of those setups below.

Last Five Trading Days

Daily Price Action
The SPX also closed above its intraday midpoint for the sixth straight session yesterday. Despite the strong gain and solid finish, though, breadth slipped to just 44% advancing stocks. Seeing that happen on a day when Technology was the best-performing sector is nothing new, which we’ll dive into in more detail below.

Sectors
Only three sectors had positive breadth—Technology, Financials, and Industrials, the three largest sectors in the S&P 500. Meanwhile, three other sectors finished with fewer than 20% of their stocks advancing, underscoring just how mixed the session was beneath the surface.

Best & Worst 20

Live Patterns

The SPX’s 7680 target remains in play after yesterday’s strong up move…

But the bearish diamond pattern breakdown now has been officially negated.

The potential bullish pattern
The potential bullish formation has continued to progress, and it’s now within striking distance of being officially triggered.

GoNoGo Daily – Remains in Go Mode
The GoNoGo indicator remains in Go Mode, with the notable change being that a short-term buy signal has now triggered (green dot). Since the comeback began in late March, this has happened only one other time—on 5/20. That marked the first day of the nine-day winning streak that ran through 6/2.

DeMark – Daily
The current DeMark counts now are at 5/9 on the Setup Sell and 3/13 on the TD Combo Sell.

Tech Leads with Sub Par Breadth… again
Technology (XLK) gained 1.6% on Monday, yet only 44% of S&P 500 stocks advanced. That has become an increasingly familiar theme over the last two months. Tech has been the market’s leading sector 11 different times since 5/7/26. On those sessions, SPX breadth exceeded 60% just once (5/11), highlighting just how concentrated many of those advances have been.

The opposite has also been true.

Over the same period, Tech has finished as the worst-performing sector 10 times. On those days, SPX breadth topped 60% five times, as strength broadened out across the rest of the index. In other words, the market has generally seen better participation when leadership has come from outside of Technology.

While it may seem odd, this consistent rotation continues to be one of the healthiest aspects of this advance. Rather than relying on a handful of mega-cap winners, leadership has consistently shifted among sectors, allowing the broader market to continue making progress despite periodic weakness in the biggest stocks that materially led in April and May.

XLK – Still searching for direction
XLK, itself, still has some work to do before we can call its current chart formation bullish. That’s largely because it’s beholden to semiconductors, which are still having a challenging time finding their footing. Until that group begins to stabilize, it will be difficult for Technology to regain clear leadership.

IGV – the latest bullish pattern
Outside of XLK, though, there are number of growth ETFs that now are sporting potential bullish formations.

Starting with IGV, we noted yesterday that it had gained more than 10% in just five trading days and that the last few times this occurred, it was followed by at least some profit-taking. So far, though, that has yet to happen this time.

As is clear, the ETF is now very close to completing a potential inverse head and shoulders pattern. When the formation’s neckline slopes higher, as it is here, it’s often more difficult to break out from. So, while that can delay the breakout, it also tends to produce a stronger technical outcome once it happens, as more overhead resistance is absorbed along the way.

This would also mark the second breakout in just two months, as IGV completed a similar pattern in early May before extending higher.

MAGS – Approaching a key breakout zone
We can see a similar pattern taking shape in the MAGS ETF, which has also rebounded very strongly over the last six trading days. Combined with the price action from early June, a very clear potential inverse head and shoulders pattern has emerged here, as well. A breakout would further support the view that mega-cap leadership is beginning to stabilize after the recent bout of volatility.

MAGS – The failed bearish pattern
Let’s not forget how the bullish formation took shape – from this failed, and much bigger – bearish pattern.

FDN & SKYY – Impending breakouts
The same setup is also very clear within the FDN Internet ETF and SKYY, the cloud computing ETF. Both have developed similar bullish reversal patterns, reinforcing the improving technical backdrop across several key areas of the software and internet space.

VTI – Total Stock Market
Perhaps the most telling example of what has been taking shape over the last few months is the potential pattern developing in the VTI Total Stock Market ETF. Indeed, like the S&P 500, VTI is market-cap weighted, meaning its performance is driven by the market’s largest companies, just not as much. As such, it also last made a new high at the end of May.

After consolidating for the past six to seven weeks, VTI has worked its way back toward those highs while constructing a potential bullish pattern. If completed, it would set the stage for a major breakout and could mark the beginning of the next leg higher for the broader market.

IOO – Another one to watch
The IOO Global 100 ETF isn’t quite as far along in completing its pattern as the other ETFs we’ve just discussed, but it too has now rallied back to its mid-June highs, or close to them. At the very least, we can see how this one could follow suit and eventually push through that level, completing its own bullish pattern. Again, this will likely require a few more days to fully take shape.

ARKK – New multi-month highs
Yet another example is ARKK, which has been trying to push above its May high over the last few days. After a negative reversal late last Thursday, the ETF rebounded with a 2.9% gain on Monday and is now noticeably above the trading range that had contained its price action since mid-May.

An even more compelling setup is visible on the weekly chart, where ARKK is now attempting to break above its fourth-quarter 2025 highs. If successful, it would complete a bullish pattern that has been developing for nearly 10 months, marking a potentially significant technical breakout that we’ll continue to monitor closely.

Chart Trades
PANW
Bought: 6/15/26
Sold: 6/29/26
+23.2% in 10 trading days

Original note from 6/15/26:

PANW (Palo Alto Networks)

PANW has recently bounced after falling for five straight days and enduring an 18% pullback. On Friday, it snapped back from an early decline to finish marginally higher and is trading higher again this morning. Putting it all together, that losing streak ultimately helped create this bull flag pattern, with PANW potentially still in the early stages of breaking out from it. Continued upside would target 341, which would be considerably above its prior high.

For risk management, a stop loss could be placed slightly below the recent low near 251.

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Also, thank you to everyone who completed our survey. The feedback has been outstanding and incredibly helpful.

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I’ll be out of the office next week, taking a few days to celebrate my wife and my 25th wedding anniversary. See you in the 3rd quarter.

Monday, 6/22

SMH Semis – New all-time highs, with a diverging RSI
Taking a closer look at SMH, the ETF jumped another 5.8% on Thursday, 6/18 and blasted to new all-time highs, once again producing a trading box breakout—its fifth straight. This latest box, however, was by far the largest of the five.

Unlike the previous four breakouts, though, this one has not been accompanied by the same level of supportive momentum. The 14-day RSI finished last week at 64, creating a negative divergence versus price.

Tuesday, 6/23

MAGS Teetering
MAGS had a tough day yesterday, which was a clear reason for the market’s reversal and will also could be an obvious driver of today’s activity.

Here’s how the recent price action has evolved: what looked like a promising inverse head-and-shoulders breakout just a few weeks ago —similar to what we saw in May 2025 – quickly turned into a failed bullish pattern….

…and now MAGS will most likely open below the neckline of this clear bearish head-and-shoulders formation. If that breakdown holds, the downside target would be near 57.

Again, volatility is a two-way street, something that has been on full display over the last two weeks, with the SPX logging six absolute 1% moves during that span. As a result, we wouldn’t be surprised to see that continue, meaning false breakdown attempts are certainly possible. As always, it’s all about the follow-through.

Wednesday, 6/24

RSP Eql Wgt SPX and Adv-Dec Line
The RSP equal-weight S&P 500 ETF fell just 34 basis points yesterday, outperforming the SPX by roughly 1.1%. It, too, has pulled back recently, but it has remained above its major bullish breakout zone while continuing to make higher lows along the way.

The consistently positive breadth over the last two weeks has also allowed the cumulative advance-decline line to steadily claw its way back. It’s not quite at new highs yet, but it’s getting close. A breakout there would provide clear evidence that the broader market is continuing to hold up well despite the recent technology carnage.

Thursday, 6/25

JETS – The volatile uptrend
As is crystal clear, JETS has continued to make higher highs and higher lows since bottoming in October 2023. But it has hardly been a smooth ride. While every rally has ultimately produced new highs, each has also been followed by a meaningful pullback, with several retracements proving quite severe.

The question now is whether this time will be different. In other words, will this trading box breakout attract a fresh wave of buyers, allowing the ETF to sustain its momentum rather than immediately falling back into another consolidation? Here’s another perspective…

JETS – A Bearish “Setup 9”
Zooming in, some of the DeMark indicators we track are becoming stretched after this latest leg higher: In particular, a new TD Sell Setup (green 9) just completed at the highs in JETS….

Friday, 6/26

Long Losing Streaks => Market Bounces

Since the October 2023 trading low, the SPX has gained nearly 90%. But as impressive as that advance has been, it certainly hasn’t been a straight line. In fact, the index has now endured 15 losing streaks of at least four sessions over that period, including this last one.

As the table shows, those pullbacks have typically been buying opportunities: Two weeks later, the SPX was higher 11 of the 14 prior instances—nearly 80% of the time—with an average gain of 2%.

The two notable exceptions came following the February 2025 and March 2026 streaks, when geopolitical developments helped fuel much deeper downside follow-through. Those are important reminders that context always matters.

Still, history suggests that extended losing streaks within established uptrends have generally been rewarded by dip buyers rather than signaling the start of something much worse.

Here’s a chart of the last few long losing streaks.

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Key Points

The SPX failed to extend last Thursday’s big gain and, today, will have to contend with intense early weakness across the global semiconductor space to avoid another 1% decline.

Last Five Trading Days

Daily Price Action

Breadth continues to be mildly positive, with more than 50% of SPX stocks advancing in seven of the last nine trading days. Seeing how well that trend holds up on Tuesday will be very telling.

Breadth

Sectors

Energy snapped back after last week’s brutal decline, but the real standout was on the downside, with Communication Services (XLC) losing more than 2%, which we’ll break down further below.

Live Patterns

As of last night’s close, the SPX was 4.5% above its bull flag breakout zone. Once again, extending well beyond that area over the last two months has created a cushion from which the index could endure periods of volatility like this without damaging the larger uptrend. It will now have another opportunity to prove that.

The potential bullish pattern

The potential bullish pattern may look different after today, but seeing whether it can produce another higher low now becomes the next step for the bulls.

The diamond pattern

The SPX diamond formation we’ve been profiling would be broken to the downside this morning if this weakness persists…

And if the index remains below the formation, the pattern would project a downside target near 7,090.

GoNoGo Daily – Remains in go

The GoNoGo Trend remains in a “strong trend” for now (blue bars), which obviously will be under pressure today, as well.

SPX – Daily DeMark

The counts have been reset after yesterday’s negative reversal.

SPX – Key Levels

These price levels may not come into play today, but they provide good reference points to keep in mind as the current pullback unfolds:

7,329 – 50-day moving average

7,237 – June 9 low

7,126 – 38.2% Fibo retracement

7.002 – Jan. 28 high

6,970 – 50% retracement

6,907 – 200-day moving average

6,815 – 61.8% Fibo retracement

MAGS

MAGS had a tough day yesterday, which was a clear reason for the market’s reversal and will also could be an obvious driver of today’s activity.

Here’s how the recent price action has evolved: what looked like a promising inverse head-and-shoulders breakout just a few weeks ago —similar to what we saw in May 2025 – quickly turned into a failed bullish pattern….

…and now MAGS will most likely open below the neckline of this clear bearish head-and-shoulders formation. If that breakdown holds, the downside target would be near 57.

Again, volatility is a two-way street, something that has been on full display over the last two weeks, with the SPX logging six absolute 1% moves during that span. As a result, we wouldn’t be surprised to see that continue, meaning false breakdown attempts are certainly possible. As always, it’s all about the follow-through.

XLE vs. SPX

XLE quietly logged a positive reversal yesterday and, while it still must contend with resistance at the head-and-shoulders breakdown zone, it could attract some interest if the technology rollover continues.

As we know, XLE has underperformed the SPX since late March, but that relative weakness has become less extreme in recent weeks. The XLE/SPX ratio continues to make lower lows, but at a slower pace, while its 14-day RSI has quietly been building higher lows—a positive momentum divergence. We’ll be watching this ratio closely…

Chart Trades

A recent chart trade idea that continues to be in play is NTRA. Here’s an updated chart.

I did a deep dive on the stock in article for CNBC last week. CNBC Pro subscribers can access it here.

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Enjoy the rest of your long weekend.

Monday, 6/15

SMH Semis – Testing the edge of another trading box
With SMH trading considerably higher in the pre-market, it could soon be testing its former May highs. Having failed to completely break down during the recent pullback, it now has the opportunity to return to—and potentially break above—its latest trading box.

Indeed, this trading range is much larger in terms of height than the prior iterations. However, as we know, trading ranges come in all shapes, sizes, and durations. The key point is that when consolidation periods continue to resolve higher, the underlying uptrend can persist.

That principle is true regardless of the asset being analyzed, not just SMH. As long as consolidation leads to higher highs and higher lows, the trend remains intact.

Tuesday, 6/16

Tech dominating… beyond mega caps
As noted above, yesterday’s huge Technology advance wasn’t just about the biggest of the big tech names doing all the heavy lifting.

Indeed, the mega-caps performed extremely well and had a major influence on the S&P 500’s nearly 2% gain. However, 80% of the sector advanced, and on an equal-weight basis, RSPT performed nearly as well.

This wasn’t isolated to yesterday. As this performance chart clearly shows, RSPT has kept pace with XLK for the ENTIRE rally off the March lows. XLK is up 47%, while RSPT has gained 46%.

The strongest form of leadership within a sector occurs when the majority of stocks are moving in the same direction, nearly in unison. That’s exactly what has been happening in Technology. It is also a phenomenon we’ll be monitoring closely if/when divergences begin to emerge.

Tuesday, 6/16

XBI Biotech – Another bullish setup
XBI is essentially flat since early April, but along the way it has constructed a clear potential inverse head-and-shoulders pattern (green), its second bullish formation of 2026. The first breakout occurred in April, but it was obviously short-lived.

Successfully leveraging this latest setup would help reignite the uptrend and potentially restore the positive momentum that faded after the prior breakout attempt.

Wednesday, 6/17

The SPX’s potential bullish pattern
The bullish pattern we’ve been profiling remains alive, as well. As noted yesterday, the only question now is whether the SPX will — or should — take another breather before attempting to push to new highs. Indeed, seeing a relatively shallow higher low materialize from here would be a constructive and potentially powerful next step before a breakout occurs.

Thursday, 6/18

2 Year & 10 Year Yields
Treasury yields rose after yesterday’s hawkish tone and “new” language, with the 2-year yield hitting its highest point since early 2025. The 10-year yield remains below its recent peak. For now, though, both remain UNDER key downtrend lines.

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Enjoy the rest of your weekend, and let’s go Knicks.

Monday, 6/8 - SPX starts the week extremely short-term oversold

With the 14-period RSI on the 2-hour time frame now at 26, it’s among the most oversold readings we’ve seen over the last few years. Most of the time, this has led to immediate bounces within ongoing uptrends since the 2023 low — not surprising. Three of those instances occurred right near major trading lows, highlighted by the bold blue lines, including the last one in March 2026.

One particular instance, however, occurred near a market top in February 2025. That, of course, came after a very strong 2024 advance. This time, the rally has also been strong, but not as extended if measured from the 3/30/26 low.

Tuesday, 6/9 - SIL Silver tests another key support zone

SIL has had a volatile ride over the last few months, but the one constant has been the emergence of bearish topping patterns. As it trended higher in 2025, those patterns failed to break down, encouraging eager dip buyers instead.

That, of course, has changed in 2026, with the price action trending mostly lower, though not collapsing. The March pattern breakdown produced only limited downside follow-through, but the ensuing bounce was also limited.

As a result, another topping pattern has now been triggered, and SIL has spent the last few days below its 200-day moving average for the first time since early 2025.

With the ETF now testing the March lows, dip buyers once again have a clear area to step in and a logical level to manage risk. The question is how much patience they’ll have if their efforts aren’t immediately rewarded this time.

Wednesday, 6/10 - SMH vs. key moving averages

After just touching its 20-day moving average once from early April through early June, SMH has spent the last three days violently slicing through and reclaiming that line, as detailed in the intraday chart above. Again, this was bound to happen.

So, what’s next?

While the 20-day moving average isn’t the shortest-term trend indicator, it’s still short enough to remain relatively close to the price itself. That’s important because it means that after just a few days of back-and-forth movement, the average begins to catch up — both on the way up and on the way down. Again, it’s no surprise that we’re seeing that happen now.

At this point, it’s a matter of monitoring how well SMH behaves around the line. For example, how many days can it spend above it versus below it? This may sound obvious, but simply undercutting the moving average and then bouncing back above it is normal.

Thursday, 6/11 - Gold – Depressed enough to bounce?

With Gold continuing to weaken, a TD Sequential Buy 13 was triggered yesterday. This isn’t the first one we’ve seen, as there was also a signal in late May. However, buyers failed to respond to that setup.

This time, though, Gold is trading considerably lower, and with a potential TD Combo Buy 13 also approaching (11 of 13 currently), a meaningful mean-reversion opportunity could be setting up. As we know, it’s all about the follow-through… or lack thereof.

Friday, 6/12 - EWY South Korea – Avoiding the bearish pattern so far

As we know, Taiwan and South Korea have significant exposure to key parts of the AI and semiconductor space, so it’s not surprising that their charts continue to resemble SMH.

EWY South Korea has traced out a very clear potential head-and-shoulders pattern, though Wednesday’s 11% surge prevented a breakdown. Given the massive back-and-forth action of late, that formation — much like the one in the SPX — remains a possibility. For now, however, support has held.

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Also included is our most recently closed Chart Trade, which the model exited this morning for a 17.8% gain in 20 trading days, along with the original write-up and charts that accompanied the trade idea.

Key Points

The SPX snapped back on Monday, but in unimpressive fashion, fading by late morning and finishing below its intraday midpoint. Bears are understandably calling it a dead-cat bounce, and the only way that view is proven wrong is with a stronger follow-through effort in the days ahead.

Last Five Trading Days

Daily Price Action

Ironically, yesterday’s internals were noticeably worse than Friday’s, despite the SPX performance being nearly 3% better.

Breadth

Sectors

Technology did bounce back well, but the 2% gain barely dented Friday’s 7% drubbing. And only 62% of its components advanced, another sign that participation within the sector was far from overwhelming.

Best & Worst 20

Bull flag still holding on for now

The 7,680-target derived from the bull flag remains in play. That big cushion it built up has kept it alive for now…

Potential Patterns

Both bullish and bearish potential patterns remain viable after yesterday.

I posted this on X yesterday morning, and it generated a lot of engagement, with more than 70 comments as of early this morning. Not surprisingly, the initial responses were tilted bullish, but they became increasingly bearish as the day wore on and the market began to lose steam.

Translation: price dictates sentiment. My interpretation is that traders still want to buy the dip, but they’re hesitant about getting run over. As a result, many will likely wait for more confirmation and then chase it higher if and when the SPX gets back to new highs.

GoNoGo Daily – Remains in go

As noted yesterday, we’re watching to see how much downside follow-through develops from here, whether the indicator flips back to Neutral or NoGo, and if the market can remain within a defined uptrend. Assuming it does, the next question becomes when and where the next green dot — a short-term buy signal — appears.

SPX – Daily DeMark

While it will take some time for another 13 to show up from either side, a Setup countdown is now on 2 of 9.

Here’s what that means… As described by the official Demark website:

“A 9 indication marks a completion of the Setup phase in the Sequential and Combo family of indicators. The 9 output looks for a series of consecutive price comparisons to define the underlying environment. Generally speaking, these 9 results are often followed by a price reversal, with the impact and duration defined by other elements of the indicator.”

Bollinger Bands – Approaching the lower line

Through last Thursday, the SPX had spent nearly all of its time trading between the upper Bollinger Band and the middle-dotted line (20-day moving average). With the index aggressively piercing the 20-day line on Friday, it’s now less than 100 points away from the lower band.

Reaching that lower band is certainly possible. What does it mean if it gets there?

As we may recall, the first real dent in the armor during the 2025 comeback occurred in late July and early August. In particular, the 8/1 decline pulled the index all the way down to the lower Bollinger Band while simultaneously triggering a bearish pattern, which was then quickly and powerfully reversed.

Thus, seeing how well the index responds to both of these potential scenarios again will be telling. For now, we’ll first need to see a better effort to believe the bid truly has returned.

Chart Trades

ASML
Bought: 5/13/26
Sold: 6/9/26
+17.8% in 20 trading days

Original note from 5/13/26:

As just discussed above, rotation can occur between sectors, between groups within sectors, and even within sectors among individual stocks. That could create opportunities in names that have lagged but are quietly building constructive setups.

While many semiconductor stocks have exploded higher over the last few weeks, some have yet to fully break out. ASML fits that description.

The stock appears to be tracing out a potential bullish cup-and-handle pattern, while also doing a good job steadily regaining ground since reporting earnings last month. Rather than immediately surging higher, the stock has been consolidating in a more controlled fashion, which can often help build a stronger foundation.

If ASML can finally leverage the pattern and break higher, the upside target would come into focus near 1,814. A stop loss near 1,399 helps define risk.

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Have a great weekend.

And let’s go Knicks.

Monday, 6/1

SOX Semis: +69% in two months
Not surprisingly, but still astonishing, the SOX Semiconductor Index is now up 69% over the last two months. The only other time it gained at least 60% over a two-month period was January-February 2000, just before the internet bubble peaked in March.

Of note, nearly all of that move came courtesy of February’s 50% surge. In March 2000, the SOX rallied another 17% at one point before reversing sharply and finishing the month with a gain of just 1%.

We all know what happened next.. Thus,it’s not the strength itself that should concern investors right now, but rather the potential for a major reversal.

Tuesday, 6/2

IGV – Epic Comeback or just another huge mean reversion
Since May 2024, now IGV has experienced five separate swings between 30% and 55%, with each one effectively reversing the trend that came before it. The chart highlights just how extreme the back-and-forth action has been. First a 45% rally, then a 31% decline. Next came a 53% surge, followed by a 37% drop. Now, the latest rebound has reached 46%.

In other words, what we’re seeing today isn’t unprecedented. In fact, it’s become a defining characteristic of software stocks over the last two years. So the real question isn’t whether IGV can extend an oversold bounce. It already has.

The question is whether the ETF can finally break this cycle of violent reversals and push above its former highs. If it can, this latest advance may prove to be something much more important than just another mean-reverting move

Wednesday, 6/3

KBWB Banks – Two potential bullish setups
KBWB includes the large money-center banks AND regional banks, looks very similar to KRE. In fact, this ETF appears even closer to completing a sizable bullish cup-and-handle pattern.

Along the way, it has also formed a smaller but well-defined inverse head-and-shoulders pattern. In many ways, that entire formation has helped create the handle portion of the larger cup-and-handle setup.

A breakout above the 89-resistance area would complete the pattern and project an upside move that extends well beyond the ETF’s prior highs from earlier this year. For now, KBWB remains one of the more compelling, untriggered bullish setups within the financial sector.

Thursday, 6/4

10-Year Yield
A key driver behind the SPX’s nine-day winning streak was the sharp decline in interest rates after the 10-year Treasury yield briefly spiked toward 4.7% in mid-May.

That pullback brought the 10-year yield back into the mid-4.40% range and down to the lower boundary of the upward-sloping channel that has been in place since the March lows. While rates are typically characterized by jagged price action, the recent broader trend of higher lows remains intact.

Prior tests of this uptrend line led to fairly strong rebounds in yields. If that happens again now, especially with the SPX’s nine-day winning streak having just ended, it could become a headwind for equities, at least in the short term.

Friday, 6/5

SPX – DeMark Update
We actually was first shared on Thursday and again this morning

Keeping tabs on the DeMark work, two Sell 13s recently registered on the same day. Again, the strongest trends can persist despite various Sell 13 signals, but when other indicators begin to line up alongside DeMark, we should at least be aware of it.

With that now happening, we’ll be watching closely for any additional downside follow-through this time. And the very least, the next real bout of profit-taking should provide insight into how the next period of consolidation unfolds, specifically whether the next pattern takes on a more bullish or bearish character.

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As we all know by now, the SPX extended its winning streak to eight consecutive trading sessions with yesterday’s modest gain. That marks the longest winning streak since April-May 2025.

As discussed in yesterday’s comprehensive June Roadmap piece, the prior streaks of at least seven days did not lead to immediate and significant downside once they ended. There was certainly some choppiness, but the worst outcome from this admittedly small sample size was a period of sideways movement that followed the October 2025 streak.

It’s also worth noting that, despite the current eight-day run, the gains themselves have been relatively modest. As a result, the rate of change does not stand out as one of the strongest eight-day runs. In fact, only the first gain of the streak, on May 20, exceeded 1%. None of the remaining seven advances were larger than 0.6%.

Another notable aspect of this streak has been leadership concentration. Technology has been the top-performing sector on three of the eight days, while Consumer Discretionary led on two others. In other words, five of the eight sessions have been led by large-cap growth stocks.

This isn’t surprising, but it does suggest those areas may need to continue carrying the load if the broader market is going to keep pushing higher. That brings us to another important consideration…

The OTHER Streak – Five Straight SPX Negative Breadth Days

Again, we know that large-cap growth has been leading the market, helping drive the SPX to numerous all-time highs over the last several weeks. That includes the current eight-day winning streak, during which the index has made a new high nearly every day.

What’s interesting is that, over the last five trading sessions, the SPX has recorded negative breadth every single day. In other words, while the index continues to move higher, fewer stocks are participating in the advance.

Going back to the start of 2024, there have been only three other instances of at least five consecutive days of negative breadth. Each extended to at least six days, including the unusually long 14-day streak that occurred in late 2024. Two of those episodes took place during market pullbacks in April 2024 and November 2025. In both cases, the SPX eventually regrouped and pushed to marginal new highs.

The 14-day streak was different given simply how long it lasted. Large Cap Growth strength helped keep the SPX from dropping. And while the index eventually made another new high in early 2025, it was a marginal and a failing effort, which gave way to the tariff-driven decline. The news may have been the catalyst for intense sell-off, but the underlying foundation had already become more fragile.

For now, we’re talking about only five days, not fourteen. But if this uptrend is going to continue, we’ll eventually need to see broader participation beyond large-cap technology and growth stocks. If and when those leaders finally experience a more meaningful pullback, it will be important to see whether other areas can pick up the slack.

Otherwise, there is always the risk that weakness in the largest stocks spills over into the broader market. That’s not something we’re suggesting is imminent, but it IS something worth keeping in mind as this advance continues to mature.

Chart Trades Update

Two recent software trades hit their initial price targets yesterday:

APP +24% in 12 trading days

IGV +15% in 18 trading days

18 other trades remain live.

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Opening Look is our comprehensive pre-market note, delivered each morning well before the opening bell, covering the major indices, key market stats, actionable ETFs and individual stock “chart trade” ideas.

For those short on time, we also include a concise TLDR in the email, designed to highlight the key takeaways before diving into the full analysis, or for readers who simply want the main points at a glance.

Have a great Tuesday. Best, Frank

TLDR for today’s note:

Daily Price Action: Friday’s gain came with another 70% breadth day and zero stocks making new lows.

Sectors: Friday’s standout was equal-weight Tech (+2.7%) dramatically outperforming XLK (+1.0%).

Weekly Leadership: XLV Healthcare was 2^nd-best sector for the 2nd straight week.

SPX Pattern/Trend The 7,680 bullish flag target remains alive as both daily and weekly GoNoGo indicators stay firmly in Go mode.

Eight Straight Up Weeks: History remains constructive. Prior 8-week winning streaks with gains of 12%+ have typically led to above-average forward returns over the next 3–12 months.

The Blueprint: April’s explosive rally has transitioned into a slower, steadier advance, similar to prior healthy post-correction recoveries.

JETS: Rebounded sharply from support but is now testing a key downtrend line.

XLV: Continues rebounding from major support. Key next step: log a key higher low.

EWJ: Nearing a potential inverse head-and-shoulders breakout.

SOX/SPX: Weekly RSI near 85 remains one of the highest readings since 1994.

ADP: Forming a bullish inverse head-and-shoulders pattern, with a breakout above 227 targeting 266.

PRMB: Continues building a cup-and-handle pattern. A breakout would target 29.

Watch list: BE, EVRG, GILD, SNDK

Key Points
The SPX tacked on its third straight gain Friday and notched its eighth consecutive weekly advance, which we will break down in today’s Market section. Beyond the index itself, there continue to be a number of compelling setups, along with several extreme readings across select ETFs and key indices that are worth monitoring. Plus, two new trade ideas.

Last Five Trading Day

Daily Price Action
The tepid gain was accompanied by another 70% breadth day and zero stocks hitting new 52-week lows, which we last saw on April 20.

The only missing ingredient was that the SPX again closed below its intraday midpoint on Friday. We have not seen two straight closes below the midpoint since March 20–30, when the index did so seven consecutive times during the correction.

Sectors
The biggest standout last Friday was the extreme outperformance of the equal-weight Technology sector (+2.7%) versus XLK (+1.0%). Seeing rotation within the market’s most influential group like this is exactly the type of action that can help extend an uptrend, as leadership broadens beyond just the largest-cap names.

Sectors – Weekly
Healthcare was the second-best performing sector for the second straight week, while Technology ranked fourth again. Overall, it was a solid and well-dispersed showing, with leadership spread across multiple areas.

Breadth

Best & Worst 20

Best & Worst 20 – Weekly
Big up moves continued to outpace big down moves, and leadership remained fairly diversified. Growth, airlines, retail, Europe, and Financials all showed strength, among others. Relative weakness was fairly scattered, as well, with Energy, select Asian indices, and crypto lagging the broader market.

One live bullish pattern

The Bullish Flag Pattern Breakout
The 7,680 target remains in play.

GoNoGo Daily – Remains in Go Mode

GoNoGo Weekly – Remains in Go Mode

After Eight Straight Up weeks
The Kobeissi Letter shared some thoughts on the SPX’s 8-week winning streak via X last week. Here’s a quick summary:

It’s the index’s longest streak since 2023 and the second-longest winning streak in the last 23 years. Over that stretch, the SPX has rallied roughly 17% and pushed above 7,500, etc.

History suggests this type of momentum is relatively rare. According to the data, there have only been six other instances where the SPX gained at least 12% during an eight-week winning streak. In those cases, the index averaged an additional 4% gain over the following 12 weeks and roughly 17% over the next 12 months.

Of course, history never guarantees outcomes, but for now, the trend remains clear: the bulls continue to control the tape.

One of the Best 8-week rallies in history
Charlie Bilello takes this a step further noting:

“The 17% gain in the S&P 500 over the last 8 weeks is the 20th biggest 8-week gain for the index since 1950.

What has happened in the past following the biggest short-term rallies? Above-average forward returns (+27% average over the subsequent year vs. +11% in other periods).”

That’s a loud and clear statement: even epic strength begets more strength.

The Blueprint has been playing out again
With the SPX having logged just three 1% days so far in May (two up, one down), the explosiveness of April has clearly slowed, but importantly, the bid has not disappeared. Instead, the market has begun to transition into the type of steadier, less volatile advance that has often followed sharp recoveries from corrective action.

We have been showing this particular framework since early 2024 because, so far, it continues to be as instructive as any. Historically, after an initial burst of powerful upside days, the market often enters a quieter stretch where gains continued just at a slower pace and with less volatility.

The next step? Simply seeing this most recent non-volatile run persist.

That said, the periods where this did not happen, highlighted with green arrows below, eventually gave way to noticeably sharper and more meaningful pullbacks. We’ll be monitoring this for any slowdown that begins to weaken the SPX’s footing.

Short-term – A few things to watch
While the SPX finished higher last week for the eighth straight time, there were a few minor changes in character worth monitoring beneath the surface. Most notably, the index failed to make a higher high… this may change already this morning, but still something we should watch going forward.

Also, the short-term RSI dipped below the 50-zone for the first time since late March, a subtle shift that suggests upside momentum cooled, even if only modestly. Just as notable, the rebound over the last few days failed to push RSI back above the 70 overbought threshold, which had become fairly routine during much of the advance.

None of this signals anything major on its own, and a strong day or two could quickly put the short-term picture back in overdrive. But as always, we are trying to detect even the slightest changes in character before they become more meaningful.

JETS – Strong move back to a key trendline
JETS was the second-best performing ETF on our list last week, rallying sharply from support near the 25 level and the upward-sloping trendline that has helped define the recent recovery. So far, though, the bounce has not done anything technically significant.

In fact, the ETF is now running into a key downtrend line that extends back to the late-January highs. In other words, traders have been more than willing to buy dips in JETS over the last two months, but there has been limited evidence of investors wanting to keep buying after short-term rallies. That is the hurdle now.

JETS has another opportunity here. Best case, the ETF can finally push through this resistance and, on the next round of profit-taking, hold above the 200-DMA and form a higher low, which would represent a meaningful technical improvement.

XLV – Can we trust the bounce?
XLV was the second-best performing sector last week, continuing its respectable bounce from very important support near the 142–143 zone. As noted at the time, it was critical to see buyers step in there, given that XLV was close to confirming two separate bearish patterns. For now, those downside risks have been avoided.

Reflexive bounces like this are necessary to prevent downside momentum from taking over, but the bigger test still lies ahead. For this rebound to evolve into something more substantial, we would ideally want to see a higher low develop on the next pullback.

That would suggest buyers are becoming more aggressive and could help lay the groundwork for a more durable advance rather than just a short-term oversold bounce.

XLV – The bigger pattern
Another reason investors may be willing to keep buying XLV after averting a downside pattern break is that the ETF also managed to hold near its 2026 lows, helping preserve a higher low on the bigger-picture monthly chart.

In fact, the entire 2026 pullback may simply represent a digestion phase following the epic four-month, 21% rally from August through November ’25, which we profiled at the time as the best four-month gain in XLV’s history. Sharp advances like that are often followed by periods of consolidation rather than straight-line continuation.

Thus, the long-term uptrend remains intact, and new all-time highs are clearly not out of the question. That said, for that larger bullish setup to regain traction, we would first want to see some follow-through from the recent short-term bounce and, ideally, a higher low develop on the next pullback.

EWJ Japan – Impending Breakout
With the Japan Nikkei 225 breaking out to new all-time highs again last week, EWJ could be next. That said, investors should not expect EWJ to perfectly mirror the Nikkei, and there are two key reasons why:

1. Different Index: EWJ tracks the broader MSCI Japan Index, not the Nikkei 225, meaning stock and sector weightings differ. As a result, leadership beneath the surface can vary, leading to performance differences at times.

2. Currency: EWJ trades in USD, while the Nikkei obviously is priced in Japanese yen. Thus, fluctuations in the yen relative to the dollar can create meaningful divergences in returns, even when Japanese equities are broadly moving in the same direction.

Regardless, it is clear that EWJ appears to be tracing out a potential inverse head-and-shoulders pattern, and continued gains from here over the near term could complete the formation and potentially pave the way for a more meaningful breakout.

SOX vs. SPX
The SOX Semiconductor Index shot up another 5% last week after marginally declining the week prior and thus outperformed the SPX by over 4%. As is clear, that has kept the relative SOX/SPX ratio extended, with the 14-week RSI of that relative ratio near 85, only slightly down from its recent high of 86. Needless to say, this is among the highest readings in history going back to 1994.

Noted are the prior occasions when the ratio overtook 80. Two marked major relative tops in 1995 and 2000, while the other in late 2017 led to some consolidation before the resumption of a major multi-year uptrend. So, we know this kind of elevated condition will not last… and it is all about the response from here….

ADP Automatic Data Processing

ADP is another software/industrial hybrid that has been fighting back since the April lows, though it still has plenty of work to do after trending lower since peaking back in June 2025.

That said, like many software-related names, the recent advance has at least helped form a potential bottoming pattern, with ADP now appearing to trace out a possible bullish inverse head-and-shoulders formation.

A breakout above the 227 zone would complete the pattern and produce a measured move target near 266, with a stop loss just below last week’s low near 212.

Further supporting the improving backdrop, ADP’s GoNoGo indicator recently flipped back into Go mode, where it has remained since late April. Thus, we know several underlying technicals have started to improve after being decidedly negative and trendless for nearly a year.

PRMB Primo Brands

PRMB has been gradually fighting back from the brutal downtrend that bottomed in early November’25. Indeed, the recovery has been volatile, particularly over the last few months, but consistent nonetheless.

More importantly, that improvement has helped form this potential cup-and-handle pattern. In fact, if we focus only on the action since early May, the setup could also be categorized as a bull flag. Regardless of the label, the general bullish structure of the chart is clear.

If PRMB can finally punch through the 23.8–24.0 resistance zone, an upside target near 29 would come into play. Meanwhile, the stop loss sits near 21.5, just below the most recent higher low, helping define risk if the breakout attempt fails.

Watch list: BE, EVRG, GILD, SNDK

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Here are links to two CNBC segments from early this morning - live chart analysis on the big wall and a panel discussion.

More importantly:

“A hero is someone who has given his or her life to something bigger than oneself.” — Joseph Campbell

Thank you to all who have given the greatest sacrifice.

Enjoy Memorial Day Weekend.

Trading boxes will matter again soon
We haven’t talked about trading boxes lately, and we know the reason why: the SPX has had barely a pause since pivoting in late March. But now, in hindsight, we can put some of the price action from the last eight weeks into the context of ranges or trading boxes. From this perspective, the latest pause appears to be one of those periods.

The best-case scenario from here is not to see the rip-roaring rally from April suddenly rekindle. Rather, it is to see these digestion phases resolve to the upside. We recall how prevalent this was from last April through December, with seven straight trading box breakouts helping keep the uptrend intact.

This became especially helpful once the pace started to slow in May ’25. It showed us that overbought conditions, MACD sell signals, and simply seeing momentum slow were not necessarily precursors to a bigger drawdown.

That’s the blueprint we’ll be watching to see develop again going forward. As always, nothing is guaranteed, and thus any range that is meaningfully breached to the downside will need to be respected just as much as a breakout would.

RSP – Nearing a big breakout zone
RSP outperformed SPX yesterday, and even though it wasn’t by much, the gain pulled the ETF closer to its highs. From a pattern viewpoint, it is now close to breaking out from this potential four-month inverse head-and-shoulders pattern.

What can get it there?

Rotation.

We’ve recently showcased attractive patterns from key sectors that can help drive that outcome — XLF, XLI, and XLC, to name three. Rotation is what can help this uptrend persist beyond the biggest technology names, and movement into areas showing strong foundations like this would be a worthwhile next step.

NDX – Comparing the breakouts
The NDX is now up 29% from its March low — a huge move in about seven weeks. That pace most likely will not last, but looked at from another angle, it doesn’t appear overly extended just yet.

The index is now 12% above its former 2025 highs, and when looking back at prior breakouts to new highs since 2022, this advance ranks among the smallest before another corrective phase materialized.

In other words, while some digestion will be needed, history suggests this type of move alone has not necessarily marked an extreme.

QQQJ – Breaking out to new highs
While RSP outperformed SPY yesterday, QQQJ bettered QQQ — and notably, it also made a new high, while QQQ did not. This is one example of how rotation within growth can work, with money moving into the second-largest 100 Nasdaq names rather than remaining concentrated in the mega caps.

Indeed, various technology and growth stocks have performed well over the last two months, but others have lagged and may now be in position to potentially take the leadership reins from here.

Said differently, this kind of rotation would be constructive for the broader uptrend, as it could help sustain momentum without relying on the same handful of names that have carried much of the recent advance.

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The recent pullback in the SPX has been relatively harmless up to this point, but simply slowing down has been enough to trigger the first MACD sell signal since early February ’26. After nearly two months of relentless upside and a 19% surge from the late-March lows, momentum was bound to cool at some stage. The question now is whether this is the beginning of something more meaningful or just another pause within a still-powerful uptrend.

On the surface, a MACD sell signal can sound ominous. After all, the indicator is designed to identify shifts in momentum, and when the faster line crosses below the slower line, it often suggests the trend is weakening. Given the one-way action of the last several weeks, investors would be justified in paying attention.

Why This Signal Matters

We have seen this before.

Last year, the SPX rallied nearly 24% before its first MACD sell signal emerged, and while that initially prompted some short-term consolidation, the broader uptrend barely skipped a beat.

In fact, what followed was even more telling: eight failed MACD sell signals before the one in November ’25 led to more downside.

The market paused at times, occasionally corrected modestly, but dip-buyers repeatedly stepped in and prevented momentum deterioration from snowballing into anything more serious.

The 2026 “blueprint” has been one of the more useful comparisons since the late-March pivot low, of course.

The Difference Between Red Lines and Blue Lines

One of the most important takeaways is that not all MACD sell signals are created equal. The thick red vertical lines represent the signals that actually worked — periods where downside momentum accelerated and meaningful pullbacks followed. Those are the moments when MACD effectively warned that buyers were losing control.

But look at the many dotted blue lines scattered throughout the last 13 months.

Each one marks a MACD sell signal that ultimately failed.

What Failed Sell Signals Are Really Saying

Yes, the market often paused near those signals. Sometimes there was brief weakness, or a few sessions of consolidation. But initiating shorts or aggressively taking profits simply because the faster MACD line crossed below the slower line (while the indicator remained above the zero line) has largely been the wrong move in this environment.

Instead, those failed signals told a different story.

They revealed that investors were still willing to buy dips, even after stretches of weakness or cooling momentum.

In other words, when a respected momentum indicator repeatedly fails to confirm downside, it can become an instructive gauge of market strength rather than weakness.

That is part of what makes MACD one of the best trend indicators. It is valuable not only when it works, but also when it doesn’t.

Bull Markets Behave Differently

In strong bull markets, failed sell signals can effectively become a form of bullish confirmation. If momentum temporarily fades but price remains resilient and buyers quickly reassert themselves, it reinforces the idea that institutional demand remains intact beneath the surface.

Of course, none of this means the current sell signal should be ignored. When MACD signals do work, they can work very well: the thick red lines on the chart clearly show. Markets eventually tire, trends eventually weaken, and complacency is never a strategy.

Still, this pattern of “failed caution signals” has extended beyond MACD in recent months. The word overbought has almost lost meaning in this environment, with indicators repeatedly flashing warnings only for the market to continue grinding higher anyway.

What Happens Next?

That, ultimately, is what makes the current setup interesting.

The next few weeks will tell us whether this latest MACD crossover finally breaks the trend… or simply becomes yet another blue line showing that investors remain eager to buy weakness.

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The Streak

On April 16th, the SPX’s 14-day RSI crossed the 70-mark for the first time since October 6, 2025. While the indicator didn’t stay above the overbought threshold immediately afterward, it oscillated around the mark over the next three weeks.

Then, on May 5th, momentum accelerated again, with the RSI pushing back above 70 and then remaining there on a closing basis until yesterday.

That totaled eight straight trading sessions. Any kind of streak lasting eight days is lengthy and, more importantly, seldom happens.

August-September 2020

The last streak of eight or more consecutive overbought readings took place from 8/24–9/2/20. Back then, the SPX topped the very next day, suffering nearly a 11% decline immediately afterward. Naturally, that raises the question: should we expect something similar now?

Long Streaks since 1989

History gives us a mixed answer.

Looking back to 1989, the short-term returns after these overbought streaks have not been particularly impressive, but not bad either.

On average, the SPX was only slightly lower four weeks later, with gains occurring just 47% of the time, essentially a coin flip. However, the longer-term data paints a more constructive picture.

Three months later, the market was higher nearly 80% of the time.

12 months later, it’s a 94% win-rate.

This suggests that persistent overbought conditions have more often represented pauses within broader uptrends rather than outright exhaustion signals.

Of course, eight straight days is notable, but it’s far from unprecedented. We’ve seen significantly longer streaks over the years, including 18 straight trading days in both 1995 and 1996, along with another 18-day run in 2018. In other words, while today’s momentum has clearly been strong, it still doesn’t compare to some of the more powerful stretches of upside persistence seen historically.

The Internet Boom

Perhaps the most eye-opening takeaway comes from the dot-com era, when momentum became almost relentless.

Between 1995 and 1998, there were eight separate streaks of at least eight straight overbought RSI readings.

Think about that for a moment — eight different occurrences in just four years. Persistent overbought conditions became a defining characteristic of one of the strongest bull markets in history.

Thus, from this perspective, the current environment still does not resemble the sheer consistency of gains seen during that period.

The Last 50 Years

Interestingly, though, the longest streaks of the last 50 years did not occur during the late-1990s technology boom. Instead, they happened much earlier, with the market posting 23 consecutive overbought sessions in 1970 and 24 straight sessions in 1971.

That’s an important reminder that these stretches are not exclusive to speculative, euphoric periods. Sometimes, they occur during powerful rebounds or broad-based trend shifts, when buyers simply continue overwhelming sellers for extended periods.

The bottom line is this: overbought conditions deserve respect, particularly after such a powerful run from the March lows. But overbought does not automatically mean bearish.

Bearish price action occurs when bullish patterns start to fail; so far, that has yet to happen.

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The first successful pattern saw the 6,920 objective achieved in early April…

…and now the second target — 7,375 — which was reached this past Friday.

That leaves us with one remaining live bullish pattern: the bull flag, which carries an upside target near 7,680.

Seeing two straight bullish patterns successfully play out is constructive for the uptrend to persist. Successful breakouts help build a stronger technical foundation, from which additional bullish continuation patterns can develop.

We’ve already seen this dynamic unfold over the last several weeks, and it has played out many times historically as well: the SPX experiences an initial burst of buying following a correction, then transitions into a steadier, more persistent uptrend as momentum consolidates and resets along the way.

IHI Medical Devices – When downside momentum takes over
IHI got hit hard again yesterday, falling another 3% and making a fresh 52-week low. This serves as another reminder that, while indicators can be helpful, trend and price action ultimately matter most.

As is clear, IHI has been in a decisive downtrend since the very start of 2026. Along the way, we’ve noted its persistent underperformance and also highlighted two potential positive momentum divergences, most recently in late April.

However, neither has mattered in any meaningful way. Instead, momentum has only produced brief pockets of relief, with rallies quickly fading and no true change in character emerging.

The lesson here is simple: positive divergences alone are not enough. Until price can begin making higher highs and higher lows — or at least stop breaking support — the trend remains down.

IHI Medical – Failed MACD Buy Signals
Those prior bounce attempts were also accompanied by MACD buy signals, both of which ultimately failed to produce anything more than short-lived relief rallies. With IHI again approaching oversold territory, another bounce attempt could soon trigger yet another MACD buy signal.

Of course, every setup is different, and eventually one of these signals will stick. However, given the repeated failures and the ETF’s persistent downtrend, traders will likely need to see far more upside follow-through before trusting another oversold rally.

IHI – Failed DeMARK Buy Signals
I’ve been tracking DeMark indicators more closely recently given how extreme many of the recent moves have been, particularly to the upside. One key takeaway is that, when trends become especially strong, counter-trend signals often struggle to work. We’ve seen that repeatedly with sell “13” signals during strong uptrends, and the same principle applies in sharp downtrends.

In IHI’s case, buy “13” signals appeared in March, but aside from a brief respite, the downtrend quickly resumed. The same thing happened again in April. And as is clear on the chart, we could now be approaching two additional buy “13” signals in the coming days.

At some point, one of these signals — especially when paired with the oversold readings and momentum divergences discussed above — may finally lead to a more durable bounce. But relying on indicators alone during a strong trend, whether up or down, ignores the most important factor: price action. Until the chart itself begins to improve, the trend deserves the benefit of the doubt.

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More importantly, each of those declines has been minimal, with the biggest pullback totaling just 63 basis points, which occurred on April 21st.

It has been as one-sided an advance as we’ve seen in recent history — even more so than the major comeback we saw last year and any of the other substantial snapbacks that have taken place over the last decade…

From a statistical perspective, the move is now entering extremely rare territory.

Again, S&P 500 has now produced eight separate 1% gains without suffering a single 1% decline during the same stretch.

Prior to this occurrence, the last time we saw such a sequence was during the fall of 2015. Going all the way back to 1970, this type of streak has occurred only nine other times.

The longest run took place from January through May of 1985, when the SPX recorded 11 separate 1% advances before finally experiencing a 1% decline.

Other examples were scattered across very different market environments, including the powerful rebounds of the early 1980s, post-crash recoveries, and select momentum phases during secular bull markets.

What makes the current setup especially interesting is what happened after those prior streaks eventually ended.

At some point, of course, the market finally logged a 1% decline. That alone, however, did not automatically signal the start of a major correction or trend reversal. In fact, the four-week forward returns following those prior occurrences were relatively mixed overall.

More often than not, the market simply consolidated after such powerful upside momentum. The average four-week return across the previous examples totaled just +0.1%, essentially flat.

That suggests these periods of extreme upside persistence often lead to digestion phases rather than immediate continuation or outright collapse.

The longer-term results were mixed as well, though they leaned modestly bullish overall — not particularly surprising given the historical upward bias of equities over time.

The strongest 12-month outcome occurred after the 1985 streak, when the SPX gained another 24% over the following year. The weakest came after the late-1986/1987 period, when the market was down roughly 11% twelve months later.

The BIGGEST takeaway is that the streak itself did not reliably predict an imminent market collapse.

That is the key point for investors today.

Yes, the market is stretched on a short-term basis. Yes, momentum has been unusually one-sided. And yes, at some point we likely will see a larger pullback or at least a meaningful volatility spike emerge.

But history shows that finally seeing a 1% decline after one of these rare streaks does not necessarily imply the advance is immediately over.

More often, these periods simply transition from extreme momentum into consolidation as the market works off overbought conditions before determining its next directional move.

That’s something to be mindful of…

Most important for now is that the two bullish pattern breakouts remain in play:

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Also, check out my CNBC appearance from yesterday on Morning Call. As Morgan says, it was a lightening round, indeed.

Daily Price Action
It may not feel like it, but the SPX now has endured six declines in the last 11 trading days. Over that stretch, the index is still up 1.2%. We know why — the declines have been very small. The last loss greater than 60 bps was on 3/27, which also marks the last 1% decline (-1.7%). The biggest concern continues to be the sub-par breadth: we’ve now seen eight negative breadth days in the last 10 sessions.

Two live bullish patterns

SPX 7,475
The 7,475 target remains in play.

The Bullish Flag Pattern Breakout
7,680 also remains alive for another day.

The Potential cup and handle formation

GoNoGo – Remains in Go Mode
The fourth countertrend, short-term sell exhaustion signal hit the GoNoGo chart after yesterday. Given that the index has seen more declines than gains over the last two weeks of trading, this isn’t surprising. So far, the SPX is digesting the recent spike constructively.

When the 13-wk MA crosses above the 26-wk MA
So, after such a strong comeback—and an extremely powerful April, up 10%—what more could we realistically ask of the SPX at this point?

From a weekly perspective, here’s the SPX with the three key moving averages we track: the 13-week (green), the 26-week (blue), and the 40-week (red). As expected, all three have started to curl higher, albeit with a lag.

Thus, the next step in bringing the intermediate trends in line with price would be for the 13-week moving average to cross back above the 26-week moving average. As we’ve seen over the past several years, when that crossover occurred, it led to further upside in the weeks and months that followed. Upside We’re not quite there yet—but we may not be far off…

Drawdown Scenarios
Again, with the market being so strong for so long, we’ve naturally focused on bullish patterns, upside targets, and supportive momentum. Those are all positive factors and a reflection of the historic rebound from the lows. At some point, though, we have to consider what a drawdown could look like—and ideally, a constructive one…

So… from last week’s highs, a 5% pullback would take the SPX down to about 6,900. That would line up with a prior congestion zone from earlier this year, as well as the 38.2% retracement level (measuring the March-May rally). Below that is the 50-day moving average, currently closer to 6,820. However, it’s rising quickly—about 6 to 8 points per day. Over time, that average would also approach the 6,900 area.

This doesn’t have to be exact, but the point is this: a pullback to anywhere near this zone would present a spot where patient buyers may look to step in, while also keeping the bullish patterns from recent weeks intact.

Rotation Watch
While we wait for many more growth companies to report over the next two weeks, many companies with Industrials and Financials have released earnings. That reduces company-specific risk in those groups and could mean less volatility for XLI and XLF. We’ll see.

Regardless, if there is any short-term rotation out of Technology, both sectors could be candidates for capital to rotate back into, and each is showing a constructive setup.

XLI Industrials
The ETF saw a strong bounce from late March into early April, but has done very little over the past few weeks. That’s not a negative. It’s been consolidating above its 50-day moving average, and in the process may be forming the handle of a bullish cup-and-handle pattern.

At the same time, the 14-day RSI has held just above the 50 level. Seeing RSI stay in that 50-to-overbought range is a best-case scenario, and it mirrors the behavior we saw during much of last spring-to-summer’s advance.

XLF Financials – Another potential cup and handle pattern
XLF Financials, as we know, began to lose ground as 2025 ended and 2026 began, right as many of its largest components were reporting earnings. It dropped hard and has since rallied strongly off the lows. Like XLI, has spent the last few weeks in back-and-forth consolidation.

The formation isn’t as technically sound (at least not) as XLI’s, but it is notable that XLF is attempting to hold a higher low above its 50-day moving average. If it can push back toward—and reclaim—the area near 53 from two weeks ago, it could complete a bullish cup-and-handle-type structure from this perspective.

These are two major non-growth sectors, both consolidating after strong rebounds. If the market is going to continue higher, rotation will likely be a key theme.

PJP Drugs – A familiar pattern
Beyond XLF and XLI, another area showing a similar structure is the PJP pharmaceutical ETF.

It has also done a good job rebounding from its March lows but peaked in mid-April and has spent the last two weeks trying to recover. As the chart shows, with a bit more follow-through, it could return to the 107 area. A move above that level would confirm a two-month inverse head & shoulders pattern.

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Arguably the most telling stat from April was that the SPX logged six 1% gains and zero 1% losses. On the surface, that may not sound extraordinary—but context matters.

The last time we saw six 1% up days in a single month was April 2025, but that came alongside six 1% down days. In other words, that environment was defined by intense volatility. April 2026, by contrast, showed persistent upside movement with virtually no meaningful selling pressure.

This distinction is important.

Clusters of large daily moves often signal heightened volatility, uncertainty, and two-way trading. But when those moves skew heavily to the upside—it reflects urgency from buyers, not indecision. It suggests demand is overwhelming supply, even on larger time frames.

So how rare is this type of behavior?

Going back to 1973, using stockcharts.com data, there have only been three prior instances before last month where the SPX recorded at least six 1% gains in a month without a single 1% loss:

• January 1976 → +18.2% full-year return

• December 1991 → +27.8% full-year return

• October 2015 → -0.7% full-year return

April 2026 now joins that list as just the fourth occurrence in over 50 years.

What stands out immediately is the range of outcomes. Two of the three prior cases occurred during strong bull market environments - one at the very beginning of the year (1976) and one at the very end (1991).

The third, October 2015, came during a sharp rebound following a late-summer correction—but ultimately resulted in a flat year.

In other words, this signal is not a guarantee of future performance, but it does highlight a key theme: these types of months tend to occur during powerful upside thrusts, often tied to either the early stages of a bull move or a forceful recovery within a broader trend.

That brings us to today.

April’s price action followed a sharp drawdown into late March, with the SPX briefly undercutting key support before reversing higher. The rally that followed was not only fast, but remarkably one-sided, as evidenced by the absence of large down days. This aligns with what we often see in “snapback” rallies, where positioning is offside and price moves quickly to correct it.

From a tactical standpoint, this kind of momentum can persist longer than expected. Strong upside breadth and repeated large gains tend to reinforce themselves, as underinvested participants are forced to chase.

At the same time, it’s important to recognize that such moves can also pull forward returns, increasing the likelihood of consolidation or digestion phases in the near term.

Bottom line: April 2026 delivered one of the rarest upside momentum signals in decades. History shows that while outcomes can vary, these types of thrusts typically occur in constructive market environments, not deteriorating ones.

The key now is whether this strength can broaden and be sustained, as rotation will need to play a big role. And if that does happen, then a more consistent uptrend can develop - just like we’ve seen various times over the last few years alone.

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The SPX logged its smallest gain since April 7th yesterday, with the index advancing just 12 bps. Of course, it was still enough to notch yet another new all-time high. Clearly, this is the calm between storms, with the SPX essentially straight up over the last few weeks and still waiting on its biggest and most influential components to report earnings this week.

Last Five Trading Days

Daily Price Action
The SPX has now finished above its intraday midpoint in 10 of the last 11 days, underscoring how eager buyers have been to step in throughout the session. However, there wasn’t a lot of support yesterday, with just 45% of stocks advancing. We’ve now seen four negative breadth days in the last five sessions, and the 16 stocks making new highs marked the fewest since April 15th, when there were 11.

Sectors
It was quiet from a sector standpoint, as well. Financials led for the first time since March 30th and were the only group with more than 60% of holdings advancing, finishing at 70%. Technology held in once again, with XLK gaining 22 basis points.

Breadth

Best & Worst 20

Two live bullish patterns

SPX 7,475
With SPX hitting another new high on Monday, the index’s cup and handle upside objective of 7,475 remains in play.

The Bullish Flag Pattern Breakout
The bullish flag pattern also wasn’t violated yesterday, thus, its target 7,680 also remains alive for the second straight session.

The Potential cup and handle formation
If the flag is, indeed, negated, the SPX still could pull back a good deal and have a chance to build the next pattern… Thus, this potential cup and handle formation still is a possibility.

GoNoGo – Remains in Go Mode

SPX – Short-term
With nary a pullback to speak of, there’s been very little change on the SPX charts, especially on the daily and weekly time frames. However, the 2-hour chart has changed a bit. The 14-period RSI had reached an extremely overbought reading near 90, but it has now slipped back below the 70 threshold—only marginally so far and still hovering within a few points of that level.

That said, we now have a short-term negative momentum divergence in place, with the indicator making lower highs while the SPX continues to notch marginal new highs. This may not mean much on its own, but it does represent a subtle change in character that we always try to identify, even on shorter time frames.

The SPX did pull back about 1.5% peak to trough last week, but as we’ve seen, that did little to alter the parabolic advance in place since then. It may not seem like much, but if we zoom out back to the May–October stretch from last year, we see that there were several, similarly small pullbacks. Ultimately, those ended up being just pauses and did little to disrupt the broader uptrend in 2025. Thus, seeing how well the SPX can withstand the next bout of selling will be telling.

WEAT – Knocking on the door
Updating the potential large bullish pattern highlighted in the Wheat ETF from last week, yesterday’s strong gain pulled it right up to the potential breakout zone, just below the level that was tested in three separate weeks earlier in 2025.

With the ETF logging another higher low over the last three weeks, a very clear inverse head-and-shoulders pattern is now in place. This is on a log scale, but importantly, the recent stretch of price action has held above the key weekly moving averages.

Just as notable, those moving averages are now curling higher with positive slopes. We haven’t seen a setup like this in at least four years, going back to the 2022 period.

CORN – Bottoming
With wheat moving higher, it’s likely not a coincidence that the corn ETF has been trying to leverage its own multi-month bullish pattern, as well. It’s not as clean as wheat, but a move through the 18–19 zone would complete a double bottom, with a target in the low 20s.

That’s not a huge move, but it would signal renewed buying interest in an area that has done very little over the past few years.

Needless to say, if both wheat and corn are breaking out from bullish patterns and moving higher, it could be an early indication of inflation pressure in agriculture and food, with potential ripple effects across other risk assets.

IGV Software – The next pattern breakout
Another ETF we’ve been tracking for bottoming purposes is IGV (software). It’s not often we group it with corn and wheat, but from a pure technical pattern standpoint, it makes sense. These are the types of foundations we look for after stocks and ETFs have gone through meaningful declines—and IGV clearly fits that bill.

We’ve been discussing its attempt to break out from a smaller pattern, which so far, it has done a good job of leveraging. This version can be viewed as a potential three-month bullish pattern. A move through the area just below 90 would mark the highest levels since early January and continue to point to a trend reversal.

If this next breakout occurs, it could help trigger momentum buyers who have been waiting for a decisive move through key levels and a confirmed turn higher…

IGV – 20 vs. 50 DMA
We can see this momentum shift in IGV through the 20- and 50-day moving averages. The 20-day is now very close to overtaking the 50-day, which it had remained below since late November. While there isn’t a catchy term like a golden cross for this setup, a 20-day moving above the 50-day is arguably even more important—being as a necessary step in a recovery following a prolonged decline.

We saw a more aggressive version of this last May, when a strong rally finally pushed the 20-day above the 50-day, leading to multiple months of upside follow-through. That move coincided with the 14-day RSI breaking above the midpoint (50) and holding there through much of the summer.

We’re now seeing a similar dynamic develop, with RSI pushing above 50 in April and continuing to hold that level, reinforcing the improving momentum backdrop.

Small Caps are flagging, too
While we’ve been highlighting the potential bullish flag breakout in the SPX, it’s certainly not alone. One area showing very similar price action is the small-cap space, including:

• IWM (Russell 2000)

• IWO (Russell 2000 Growth)

• IWN (Russell 2000 Value)

• IWC (Micro-cap ETF)

We knew the sharp rebounds since late March couldn’t last forever. The key question was how these ETFs would behave once profit-taking set in. So far, they’ve handled it in the most constructive way possible—by moving sideways rather than pulling back meaningfully.

That keeps these setups in potential bullish flag territory, and the longer they can hold near their highs, the better the odds that these patterns ultimately resolve to the upside, as well.

Chart Trades – New Feature – Watch List
As I review numerous charts each day to identify trade ideas, there are clearly many viable setups of which to choose, but highlighting too many entries would create noise and make tracking performance more difficult. That’s why we typically focus on one, and occasionally two, ideas in this section.

Also, as you know, I avoid recommending even the most attractive charts during earnings season if a company is within two weeks of reporting. The added company-specific risk tends to outweigh the technical setup in my opinion.

That said, I recognize that some clients may take a different approach. Thus, rather than ignoring these setups entirely, I’m going to begin including a short watch list of names that are close to qualifying, reporting soon, or otherwise didn’t make the formal recommendation list.

You’ll start to see a few of these here—not necessarily every day, but most days—and I’ll also include a dedicated section for them on the Chart Trades Live page. Here are a few that have been on the watch list over the last few days. Again, be sure to check the earnings release dates before putting on a trade.

Today’s Chart Trade is a mean-reversion idea in a stock that has been attempting to recover from a fairly sharp sell-off over the last few weeks. Despite the decline, it has done a good job holding near several key technical levels…

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