The summit will end before the cash open on Friday which is also OPEX.

Reported attendees include:

Elon Musk

Jensen Huang

Tim Cook

Larry Fink

Stephen Schwarzman

David Solomon

Jane Fraser

Kelly Ortberg

Chuck Robbins

Cristiano Amon

Sanjay Mehrotra

Michael Miebach

Brian Sikes

Jacob Thaysen

H. Lawrence Culp Jr.

Ryan McInerney

Dina Powell McCormick

The call wall of 7400 is acting as a 🧲.

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The market tone today was a shallow selloff & a bounce back.

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A bit of selling today with SPY below its 5 DMA as of this writing. The bears were hungry. 😋🐻

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For those who recently joined the DMR is now sent out by 6:30pm eastern time (prior it was by 8am eastern).

The schedule is now as follows:

By 9am eastern: “Morning Market Brief”

By 1pm eastern: “Midday Market Update”

By 6:30pm eastern: “Daily Market Roadmap”

I also provide ad hoc updates during pivotal events such as FOMC announcements, major geopolitical events that disrupt the markets, key earnings (such as NVIDIA on May 20) etc.

Today we have oil pushing over $105 a barrel & the VIX nearing 19. The fact the VIX rose 7% on Monday when SPX notched a new ATH just above 7400 was a concern.

Some shallow weakness in SPX & SPY, (20 handles as of this writing) but nothing major.

This was posted in both the Midday & DMR yesterday:

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SPY (so far) has peeled away from the $740 resistance zone. Keep in mind the reason I haven’t bought SPY puts in 4 weeks is because it has not even closed below the 5 DMA.

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Subscriber Question:

“Is there a comprehensive book on stock charting that could help me. I’m fairly new at trading?”

Great question!

The best book on the topic is this one:

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It’s considered the modern “bible” of chart analysis because it teaches:

• Trend lines and support/resistance

• Candlestick and bar charts

• Moving averages

• Volume analysis

• Chart patterns (head & shoulders, triangles, flags)

• Market psychology

• How to combine indicators without overcomplicating things

The writing is approachable enough for beginners, but deep enough that even experienced traders refer to it often. I certainly do!

CPI:

The print was 3.8% YoY (forecast was 3.7%), MoM was 0.4% (forecast was 0.3%). The Fed is now effectively painted into a corner. There will be virtually zero chance of any rate cuts at the next 2-3 meetings.

Bond yields continue their rise today with the 30 yr nearing 5% again. As yields rise the pressure on economic growth becomes more pronounced.

Today is a pivotal 10 yr Note auction & I closely watch these as it sets the tone for mortgage rates.

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The market tone today was a new ATH for SPX over 7400, closing at 7412.84. Tomorrow, we have key inflation economic data (CPI), then on Wednesday (PPI) and the Xi Jinping / President Trump economic summit (Thursday and Friday).

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The tone at midday? New ATH’s for SPY & QQQ.

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On both days I saw people arguing about the stock market. Often with rude insults & vitriol. Yesterday after playing frisbee with my 2 daughters it reminded me of this 66 second clip I made months ago.

Please turn up the sound & let the words penetrate.

This market tone today in premarket is flat.

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This will be my last post for the next three days as we celebrate my daughter’s transition to college with her graduation today & festivities tomorrow & Sunday. This is a very important moment for our family. I apologize that I won’t be able to reply to comments until Monday but I will try & get to them all.

In addition, I am publishing a special post on Monday to address several subscriber questions in one essay.

The purpose of this DMR is for me to do research so you don’t have to.

This is why I stated the following in yesterday’s “Midday Update”:

The Non-Farm Payroll figure came in nearly double at 115K. This is why I also felt yesterday was likely a bear trap when SPY reversed off $736.13 & closed red:

During the dot com era I would swing CSCO, BRCD, Motorola & Sun Micro for $30-50 per share gains in a day or two. This went on for weeks. Hence, Exhibit A: (Micron stock (MU). I know a person who flipped it this week in 48 hrs for a $100+ share gain. No news, no earnings, just FOMO. This is not normal, this dot com era style-price action.

When will the music stop? We didn’t know it would be March 24th, 2000 then & we won’t know now. What I can say is the negative divergences on SPX and SPY are getting so profound it’s beyond anything I’ve seen in 26 years. Period. Full stop.

As I type this oil is back to $100 a barrel, the VIX is up slightly to 17.3 & bond yields are down a tad. Also the Michigan Consumer Sentiment number (prelim) issued today is at a 70 year low:

Next Tuesday is the CPI print (12th) & the Trump Xi JinPing meeting is the 14th-15th. If SPY tags $740 I will take my first trade of SPY puts since April 14. As I explained this morning in the option positioning narrative, “If there is a true trend transition rather than a fear spike, then scaling from “probe size” to “core size” can make sense. We aren’t there now. SPX and SPY haven’t even closed below the 5 DMA!

My approach will be a staged entry rather than taking one large put position at once. You need to consider:

• starter size on trigger

• add only after confirmation

• largest size only after trend acceptance”

As I also stated yesterday, I am no guru & will NOT call a TOP, but this current price action I’ve only seen one other time since I began trading & it was the 6 week period from mid-February to March 24, 2000.

My intention is to capture a majority of the move when it breaks, & it will break.

Have a wonderful weekend with your family, friends & pets. 🤝

Sincerely,

John

This market tone today in premarket is bullish.

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Today SPX, SPY, QQQ, and IWM all notched new ATH’s today before their reversals.

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This was in the DMR sent out at 7:30 am this morning:

Notice how SPY tagged $736.13 at 3am eastern today:

Now look how well the algos work. It tagged the exact same price at 11am eastern before the reversal ($736.13): 🔽

BINGO! To the penny. 🤣

If SPY closes red it’ll be a bonafide bearish engulfing after a new ATH. However, these are often traps to lure in the early shorts. I’ve seen this play out many times. Until SPY closes below the 8 EMA on higher volume I would not take a large swing put trade. Be wary of the possible ‘bearish engulfing candle bear trap’.

Another new ATH for SPY ($736.13) & QQQ.

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This market tone today is a calm which was expected after the massive move yesterday.

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Today SPX, SPY, QQQ and IWM notched new ATH’s. SPX & SPY are now tagging the upper trendline from the 2000 top. It’s not truly a “resistance area” but it’s a price channel that has held for 26 years.

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The lockout rally continues and I have not taken any swing trade put positions.

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This market tone today is a euphoria which was expected once the war in Iran was announced it would end. The big move is here.

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