Earnings Face-Off: Will the Rally Take a Breather?

U.S. equities concluded the week on a decidedly bullish note, driven by major geopolitical de-escalation and a strong start to earnings season.

• The $S&P 500(.SPX)$ advanced 4.5% for the week, crossing the 7,100 milestone for the first time and closing Friday at a record 7,125.36. This marks an 11.9% gain for the benchmark index over the past three weeks.

• The tech-heavy $NASDAQ(.IXIC)$ rose 6.8% weekly to settle at 24,468.48, notching its 13th consecutive day of gains and extending its longest winning streak since 1992.

• The blue-chip $Dow Jones(.DJI)$ added 3.2% for the week to close at 49,447.92, while the $iShares Russell 2000 ETF(IWM)$ reached a new all-time high after jumping 5.5% during the week.

Last week we studied the relevance of $6,816, with historical charts that presented how important is the recovery of the 20 weekly average, now that it happened it can be mentioned here for everyone, with the SPX +4.5% above that line.

Receding conflict in the Middle East provided the primary lift for sentiment. Equities rallied after Iran declared the Strait of Hormuz completely open following a ceasefire agreement between Israel and Lebanon. The reopening of this trade route triggered a sharp decline in energy markets. Brent crude futures dropped 8.7% to $90.71 a barrel, while U.S. West Texas Intermediate crude futures slid 10.6% to $84.69. Despite the broad shift into riskier assets, gold remained elevated at approximately $4,823, reflecting sustained interest in traditional safe havens. In crypto, Bitcoin and Ethereum have rallied above 6% this week so far.

Technically speaking, the selloff in oil has reached oversold conditions, and yesterday I posted in the S/R levels edition the chart for $Exxon Mobil(XOM)$ , that is currently suggesting a potential spike (spike does not mean all time highs).

Corporate earnings and technology developments also drove significant price action.

$Oracle(ORCL)$ gained nearly 30% for the week, boosted by new artificial intelligence agreements, while $Goldman Sachs(GS)$ rose 3.13% on Friday following solid first-quarter results.

On the negative side, $Netflix(NFLX)$ dropped between 9.7% after issuing a disappointing revenue forecast for the second quarter. The quantum computing sector saw massive volatility, with stocks like D-Wave Quantum and IonQ soaring over 50% after Nvidia launched a new open-source quantum AI model.

Despite of the rally, NFLX proves that every company must prove their ratios otherwise Wall Street will punish a disappointing earnings result. From our Blueprint of trades posted last Saturday, we saw good performance this week, with $NVIDIA(NVDA)$ $Apple(AAPL)$ $Invesco QQQ(QQQ)$ $iShares Bitcoin Trust(IBIT)$ $Meta Platforms, Inc.(META)$ , and even NFLX surpassing their bullish targets.

$Palantir Technologies Inc.(PLTR)$ $Tesla Motors(TSLA)$ $Visa(V)$ reversed as expected also printing rallies, while $Eli Lilly(LLY)$ was the only security that went in the unexpected direction but our Central Weekly Level (CWL) used as a reference for stop losses protects capital.