OVERVIEW
Nothing But Strength

🟩 Risk-On: Market momentum remains strong with breakouts holding, and weakness being bought. Key sectors showing underlying strength, and any pullbacks are seen as buying opportunities.

📉 Inflation Data: April’s consumer inflation data showed slight easing with a 2.3% YoY rise, below expectations. While this supports a risk-on environment, the real focus is on price action, not the inflation numbers.

MARKET ANALYSIS
A Great Day To Be A Bull

The latest consumer inflation data for April showed a slight easing, with prices rising 2.3% year-over-year, just below the 2.4% forecast, and a 0.2% increase month-over-month, in line with expectations. While this is a positive development for inflation concerns, it’s not the key focus for us as swing traders.

What truly matters is the market’s response — and right now, it’s reacting very well. Breakouts are holding, weakness is being bought up, and what used to be resistance is now turning into support across key sectors. This underlying strength signals a healthy market environment, and as long as these trends continue, we’re staying focused on what matters most: price action and momentum.

Markets remain in a constructive stance, but conviction is selective. The S&P 500 is holding above its 50-day EMA, and equal-weighted indices (RSP, IWM) are quietly firming — early signs of broadening strength that should last a long time.

You don’t need to second guess guess the Fed, Trump, or macro data — just follow price. The edge for long equity exposure is there.

Nasdaq

The strength in big tech is undeniable at the moment. Yesterday’s breakout was particularly telling, with a large gap up followed by a typical retracement, only for the market to buy back the dip on high relative volume. This is classic bull market behavior, and we’re comfortable continuing to deploy risk in this environment.

Currently, we're testing the Point of Control (POC) just above $510. While the level may offer some initial resistance, we're highly anticipating a breakout above this zone. If this happens, it would further confirm the strength in the sector.

S&P 400 Midcap

As expected, MDY is performing strongly, with the focus now shifting to an impending test of the Point of Control (POC) overhead. We anticipate a potential failure on the first test, as natural profit-taking is likely, but the key here is to see a healthy consolidation around the POC level — not a significant pullback.

As long as price stabilizes and holds in this area, we remain confident that the midcap space is in a strong position.

Russell 2000

Small caps (IWM) gapped above their Point of Control (POC) at the open yesterday, reflecting broad-market strength. While the rejection at the declining 200-day EMA was notable, the retracement was met with strong buyer support — signaling more upside potential.

The Visible Range Volume Profile (VRVP) shows minimal overhead supply, setting up a clear path for continuation. Given today’s market action and positive signals from individual stocks, IWM appears poised to finish the week higher, with a possible breakout above the 200-day EMA today.

🕺 Key Takeaway: The IWM is like that friend who shows up to the party fashionably late, but when they do, they take over the dance floor.

🧠 Mindset Check: Now Is The Time To Push Your Luck

Markets don’t give us many chances to get aggressive — but right now, we have one. We’re in the early stages of a potential bull market, and the conditions are right to take on more risk.

This is the time to build exposure, not in a few months when the market has already moved. If you wait too long, the opportunities could slip away, and by then, you'll be playing catch-up and being the laggards, not the leaders.

A Quick Checklist

• Are Breakouts Occurring Across the Market?

  • Are key indices (e.g., S&P 500, Nasdaq) pushing through major resistance levels?

  • Is there broad participation in the rally (i.e., multiple sectors and stocks are moving in sync)?

• How Are My Prior Trades Doing?

  • Are my recent trades showing positive momentum or holding gains?

  • Have my previous aggressive trades worked out well, or did I miss an opportunity to push harder?

• How Are Other Traders Reacting?

  • Are there signs of increased confidence among institutional traders (e.g., strong volume, accelerated movement)?

  • Are my peers or trusted sources getting more active in the market, or are they holding back?

• What Is the Market’s Breadth and Volume?

  • Is the market rally broad, with many stocks showing participation? Or is it narrow, with just a few leaders driving the action?

  • Is volume rising alongside price movement? This is a strong confirmation that the move is legitimate.

• Are We in a New Market Cycle or Trend?

  • Have we seen the market break above key resistance, signaling the start of a new bullish cycle?

  • Is this rally based on solid fundamentals, like a new economic catalyst, earnings beats, or positive sentiment?

FOCUSED STOCK
SMR: NuScale Power Corporation

NuScale Power (SMR) is on the verge of a breakout. For those who aren’t familiar, this company specializes in small modular nuclear reactors — a game-changing solution for the energy sector, with big potential to power the massive AI models being developed by tech giants like Microsoft and Meta.

These reactors are even being considered to power the AI systems feeding into quantum computers. Crazy, right…?

📈 Technical Outlook: From a technical perspective, SMR is showing great strength. The Point of Control (POC) has held steady, and despite a failed breakout yesterday — which was expected given the earnings after-hours — the stock is holding its ground. This could be setting up for a very solid move as we see pre-market action showing strength.

FOCUSED SECTOR
XLY: Consumer Discretionary

In a risk-on and growth-focused environment, Consumer Discretionary (XLY) naturally leads the charge. The sector has been showing strength, and yesterday we saw a notable breakout — not just from the inverse head-and-shoulders pattern built over March through May, but also from a gap-up open driven by high relative volume.

This move is significant as it has managed to hold its ground and avoid fading against the dense overhead supply. When we check the Visible Range Volume Profile (VRVP), we can see there’s very little resistance above $212, which sets up a clear runway for further gains if the momentum holds.

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

Q: “What role do earnings reports play in your trading decisions?”

 Earnings reports are important, but not for the reasons many traders think. A stock might miss expectations and still rally, or beat estimates and still tank. What really matters is the market's reaction to those numbers.

We focus on stocks with strong momentum, and while earnings can provide short-term catalysts, it's not the EPS or sales numbers themselves that drive price action. It's about supply and demand—the real driver is momentum.

As retail traders, we don't have any information advantage over the big players—no access to inside info, no massive algorithms backing us. What we do have is the ability to read the market’s reaction in real time and trade off that.

So, look for unusual pre-market volume or a gap over key levels like the 200 EMA. If the stock is gapping up significantly above a historical range, that’s a strong signal of potential momentum, especially if the pre-market volume is abnormally high. But remember, the gap alone isn’t enough—it's the follow-through during the regular session that confirms the move.

Is the stock holding the gap and continuing to rise, or is it fading back into the range? The market's reaction post-earnings tells you everything about the potential for sustainable movement.

With strong inflows and a clear rotation into risk assets, now's the time to make your move. Access our in-depth analysis and real-time trade setups to position yourself for success.

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