OVERVIEW
Bull Market Is In Full Swing

🟩 Risk-On: Equities are surging with strong momentum, and we’re in a broad-based rally. The dip-buying sentiment is alive, and all pullbacks are being met with buyers. Expect continued upside movement, especially as we digest recent gains.

🧭 Retail and Job Data: Retail sales and jobless claims came in solid, indicating a resilient economy. We’re in a healthy consolidation phase, not a reversal. The buyers are still firmly in control.

📈 Sector Rotation & Hot Areas: Momentum continues in tech, especially in semiconductors, AI, and crypto-related stocks. These areas are seeing sustained interest, so stay focused on high momentum and be selective with new entries.

MARKET ANALYSIS
A Bad Day To Be A Bear…

Yesterday’s pullback was met with dip buying, a clear sign of strength beneath the surface. The market has been on fire lately, thanks to a 90-day truce in the U.S.–China tariff battle, which has cooled fears of a global trade war and eased some of the pressure on the economy.

On Thursday, stocks got another boost from a soft inflation report. Wholesale prices dropped by 0.5% in April, and the 12-month Consumer Price Index (CPI) cooled to 2.3%, the lowest we’ve seen since February 2021. Traders took this as a green light, fueling the recent relief rally.

This bounce is part of the broader recovery we've seen, as traders digest the news of U.S. tariff cuts on China. The mood is lighter, but there’s still a big question hanging in the air: What’s the long-term impact of these tariff changes on the economy?

While investors are still trying to assess the full damage, there’s no denying the optimism in the market right now, fueled by a lack of new negative economic signals.

Nasdaq

The Nasdaq and big tech names are at an interesting juncture. We’re starting to get technically extended over the rising daily 10-EMA, but the price action continues to climb with increasing volume, which confirms there’s still momentum driving the move higher.

The Point of Control (POC) is very likely to be tested and potentially broken any day now. While predicting whether it happens today isn’t our job, we know that if it does, we’ll be there with size, ready to get aggressive.

We’re also seeing the formation of a cup-and-handle pattern, and while we’re expecting a pullback in the Qs soon, we’re in the early stages of a euphoric market.

This makes it challenging to account for FOMO momentum, as traders can be easily swept into chasing the move, even when the technicals suggest caution.

S&P 400 Midcap

After a four-day-long contraction and pullback just below the Point of Control (POC), midcaps are finally showing signs of strength, with premarket activity starting to pick up. We’re cautiously optimistic that today we may test the overhead supply, but whether we can actually hold above this level and break out remains to be seen.

Volume has been increasing, indicating greater participation, and we’re seeing seller aggression being absorbed effectively just below this crucial level. This suggests that buyers are stepping in and may see more upside potential from here.

The key question now is whether the buying pressure is strong enough to push through the overhead resistance. If we break above and sustain that move, midcaps could be primed for the next leg up.

Russell 2000

Small-cap stocks are currently trapped below a declining 200-day EMA, a key resistance level that has held firm since December 2024. This level has been a major obstacle for the index, making any potential breakout above it highly significant.

We’re seeing a potential shift in momentum today, as premarket strength is building, with several small-cap names showing aggressive movement in the morning scans. The Visible Range Volume Profile (VRVP) is showing a low-volume pocket just above, which points to minimal resistance ahead — a positive signal for an upside move.

Small-cap stocks are known for their speed, often outpacing their larger counterparts when momentum turns. Though they may lack the fundamental strength of mid- or large-cap names, small-caps can offer some of the most explosive gains in a rally. If the breakout holds and we clear this resistance, expect rapid moves higher.

Actionable Insight: Watch for price to close strong above the 200-day EMA and an intraday test to be met with aggressive buying aggression. If this breakout holds, small-caps could make their biggest moves of the year.

FOCUSED STOCK
QUBT: Quantum Computing Inc.

QUBT has managed to drift higher ahead of its earnings, but it has been a difficult stock to trade due to the volatility. However, we're now seeing a secondary volatility contraction pattern (VCP) form on the first and second daily EMAs, which coincides with a bounce off a dense Point of Control (POC) demand level acting as support.

This setup suggests that QUBT is stabilizing and ready to move with a favorable risk/reward profile. The strong earnings report further supports the case, and given the major inflow into growth stocks, QUBT is a name not to ignore right now.

FOCUSED SECTOR
XLU: Utilities

XLU is showing the strongest potential breakout setup in the market right now, with a multi-month base clearly forming over recent months. As of premarket, we’re seeing a breakout after a high relative volume bounce off its rising moving average, which occurred yesterday.

This is a critical moment: XLU is poised to break out of its range and begin its next phase of uptrend development. With the setup looking increasingly robust, this could be one of the best risk/reward opportunities in the market right now.

🚨 Watch for: Confirmation of continued strength above the recent resistance level and sustained momentum as the sector shifts into its next stage through the opening range highs + relative volume.

Q&A
Got a trading question? Hit reply and ask!

Q: “Which is the best market indicator?”

🎯 The Real Answer: There isn’t a one-size-fits-all “magic” indicator. It’s about understanding the right tools for the job and knowing when and how to use them based on your market perspective. Every indicator is a derivative of price and volume over time, and no single one can give you the full picture.

🔎 It’s All About Context: We often get asked, “What’s the best indicator to predict the next big move?” The reality is that each tool has its role. Some work best in trending markets, others in consolidating phases. The key is to understand what each indicator tells you and when to trust it.

📉 Why We Use Moving Averages: Moving averages are one of our go-to tools for tracking momentum. By looking at multiple timeframes, from daily to monthly, we can assess short-term swings and long-term trends. Think of them as a “trend thermometer,” helping us gauge how hot or cold a stock is.

📊 Volume Profile Is Critical: The Visible Range Volume Profile (VRVP) is another essential tool. It gives us a visual guide for potential support and resistance levels based on past price action. This helps us understand where the market has been most active, giving us a better idea of where it may struggle or accelerate.

💡 Price & Volume are King: But, at the end of the day, the only things that really matter are price and volume. They give us real-time feedback on market behavior. All indicators are secondary—price is the ultimate truth teller. Don’t get caught up in too many signals; keep it simple, focus on the action.

We Want to Hear From You!

Take a moment to share your thoughts! What’s the biggest challenge you’re facing in your trading right now? Vote in the poll below and let us know!