United We Flow
A unique SPAC draws attention from WSB
Good afternoon everyone - pretty eventful few weeks since we last had a chat with the market giving us a nice boost from 5600’s back into the range highs we see today. As we kick off the first trading week of June, markets are grappling with a complex mix of cautious optimism and underlying uncertainty. Flow has been tremendous in assisting traders with idea discovery along the way.
The tape continues to impress, with bulls refusing to give up ground even as headlines try to stir up nerves about rates and macro. Momentum remains the name of the game, especially in tech, and while some folks are still waiting for the “other shoe to drop,” price action keeps telling a different story. If you’ve been riding the trend, you’re getting paid. If you’ve been fighting it, well… you know how that goes.
First off, I wanted to appreciate the previous post we wrote which had FIVE different trades excel in tremendous fashion. If you missed it, you can find it here. Earnings this week are pretty light but some worth watching can be seen as CRWD, PL, RBRK, AVGO, & IOT.
Let’s take a quick look at where we stand on the daily charts:
SPY Daily
SPY closed just above the 590 handle today, holding above all key moving averages and showing no signs of real weakness. Any dips are getting bought aggressively, and the index keeps making higher lows. The path of least resistance remains up, with buyers stepping in every time we get even a hint of softness. As long as we’re above the 20SMA, bulls are firmly in control. A follow-through day above 590 could easily open the door for another leg higher as you see the resistance trendline from local highs.
QQQ Daily
The Qs are still the star of the show. $QQQ is riding the AI and semis wave, and every minor pullback is met with fresh money. We’re seeing strong flows into the leaders, and the options market is still showing plenty of bullish activity. Unless we see a real change in character, tech remains the engine for this market. Keep an eye on 530 as a breakout trigger. Above there, and we could see some real fireworks.
Names like MSFT, META, GOOGL, & NVDA have seen heavy call buying whether it’s short or long term with a nice touch of leaps as well. This just shows me that short & long term investors are confident in the current market environment despite the looming uncertainty that the current administration has created.
IWM Daily
Small caps are quietly catching a bid, too. $IWM is holding above 205 and starting to build a base. If we can clear 210-212 with volume, there’s room for a catch-up trade here. Breadth has been a bit better lately, and if risk appetite keeps improving, small caps could surprise to the upside.
Interesting chart here with a potential inverse head & shoulders setup. The small cap trade is becoming increasingly popular as many have long awaited a move in the Russell. The 200D still looms overhead ~216 which is pivotal for further upside once 210-212 is reclaimed. Still something to keep an eye on if small caps can regain momentum into the summer.
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