New Highs, and New Trade Opportunity
Hey, traders, and investors.
Equities closed mixed to start the week — Nasdaq positive, S&P 500 slightly higher, Dow negative, and the Russell 2000 up +0.4%. Overall, the market continues to grind higher but with clear signs of fatigue showing beneath the surface.
Market Insights, News & Economy
Stock Market Trend
The S&P 500 has swung from overbought on Friday to mildly oversold today as the tape digests last week’s short-term FOMO spike. Price action remains constructive, but the tone is brittle — a few sharp red bars could appear at any point.
Despite several warning signs, the primary trend remains up, and momentum can extend longer than feels comfortable.
- The put/call ratio has dropped to extreme bullish levels, a zone that often precedes brief pauses or shallow pullbacks.
- Utilities (XLU) continue to outperform — a defensive rotation that typically signals the market may need a breather.
- Historically, these setups resolve with a 1–3-day pullback before new highs resume.
The takeaway: still an uptrend, but short-term risk of a pause is rising.
Equity Markets: FOMO Levels & Price Spikes
Both the S&P 500 and Nasdaq keep showing price spikes on the 30- and 10-minute charts. These usually appear around 8 a.m. ET, marking key magnet levels for intraday reversion.
- Each morning spike defines 33%, 50%, and 100% measured targets.
- Today’s gap-higher open was sold off, filling two of the three downside spike levels — another textbook gap-fade reset.
- As of tonight, futures are down roughly 0.2%, consistent with a post-FOMO digestion phase.
Emotions still drive short-term moves, but the macro trend remains intact.
Fibonacci Levels & ACS Discipline
Several members noted that the S&P 500 recently tagged a Fibonacci target. While that’s true on discretionary charts, remember:
- The ACS system doesn’t change course based on a Fib level.
- Price and trend confirmation always override measured-move resistance.
The Nasdaq has already hit its 100% measured-move target from the last swing and continues to push beyond it — proof that Fib confluence isn’t an exit signal when the system trend is up.
Bottom line: use Fibonacci for context, not for strategy decisions.
Sector Notes & Hot List
Communications (XLC)
Still an active BAN position. The ETF has built a series of bull flags and A-B-C corrections, shaking out weak hands before closing strong today.
The bottoming tail on today’s candle hints at a short-term low. Rotation has pulled capital out of XLC and into momentum sectors, but that sets up potential catch-up upside once the broader market pauses.
Hot List Rotation
Today’s leaders: clean tech, silver, copper, lithium, uranium, marijuana, blockchain — classic speculative chase sectors.
Money is crowding into high-beta plays, a hallmark of late-stage optimism.
Precious Metals & PHYS Trade Update
Gold (PHYS) — our current discretionary position — continues its measured-move advance.
- The first target was locked last week.
- We’re now within roughly 1.5–2% of the second Fibonacci target, possibly achievable within a day or two.
- Members trading miners or leveraged ETFs should manage accordingly — these tend to overshoot both directions near Fib completions.
A textbook swing so far; we’ll plan to book remaining gains once that final target is reached.
Technology & AI Commentary
Several members asked about AI-based trading systems. My view: they’re not reliable yet.
Even professional-grade models are inconsistent and prone to logic errors. Many “AI bots” are simply curve-fit trend followers — great in rising markets, painful in chop or decline.
If a friend’s AI strategy is “crushing it,” remember: everything has been going up. The real test comes when conditions change.
The ACS approach is built to underperform during euphoria but outperform when markets correct or stall. That’s how steady compounding beats boom-and-bust systems and mentalities.
Bonds & Rates
Bonds pulled back today, dipping into near-term support. The question remains:
- Is this a base forming for a breakout, or just a bear-flag retracement within a larger downtrend?
- Recent strength was largely speculative front-running of expected Fed rate cuts.
As yields bounce, markets are again split between narrative and reality.
This is why we trade price, not headlines.
The Magnificent Seven
The MAGS (AAPL, AMZN, GOOG, META, MSFT, NVDA, TSLA) continue to build a launch pad.
If this group breaks out again, it could fuel one more squeeze higher in the major indices — exactly the type of late-stage melt-up we’ve been preparing for.
For now, wait for confirmation; direction should resolve soon.
Key Takeaways
- Equities: Trend up but brittle; FOMO extremes and defensive strength in utilities hint at a short pause.
- Price Spikes: Continue to define intraday reversion zones.
- Gold/PHYS: Within 2% of final target; expect volatility near completion.
- XLC: Bottoming tail suggests near-term low; still valid BAN hold.
- AI Hype: Not ready for prime-time trading.
- Bonds: Pullback into support; trend uncertain.
- MAGS: Launch base forming for possible final run.
Bottom Line
The market remains in a grind-mode uptrend, but FOMO readings, defensive leadership, and low put/call ratios all flash short-term caution.
Gold and PHYS trades are nearing completion, XLC looks ready to rebound, and the Magnificent Seven could ignite one last squeeze.
Stay rules-based, scale profits, and let the trend—not emotions—dictate moves.
Chris Vermeulen
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