What They Won't Tell You About This Rally
The S&P 500 and Nasdaq continue their impressive climb, with SPX eyeing the psychologically important 5,740 level. But here’s what you need to know: this rally is getting tired.
Key Market Observations
1. The Exhaustion Signals Are Flashing
- SPY and QQQ are showing their first meaningful upside exhaustion signals since this rally began
- The VIX, which we correctly shared on our updates, had another 7-10% downside, has now reached our target in the low 20s and looks to consolidate and bounce
- These converging signals suggest we’re due for at least a short-term consolidation
2. Why This Isn’t Bearish – Just Normal
- After such a powerful rally, markets rarely collapse – they typically digest gains through time
- The overall trend remains positive, but the easy money has been made for now
- This is a healthy action that sets up the next leg higher
3. What I’m Doing Now
- Taking profits on extended positions
- Preparing to diversify into alternative opportunities that offer better risk/reward in the near term
Final Thoughts
Great traders know when to press and when to protect. Right now, it’s the latter. Pro Insights on Substack.
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- LilithMonroe·05-06Great observationsLikeReport
- Liang0020·05-06Great insightsLikeReport