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Good morning ISP Members, Here's what we found during this morning's scan:

Alert Update

VFC (V.F. Corporation) - Has still not cleared $14 so that one is on the sidelines.

CCO (Clear Channel Outdoor Holdings, Inc.) - Which was highlighted last week during the VIP update IN FACT took off! Keep an eye on that since there was a pull back as of yesterday morning and there may be a chance to still get in.

RFL (Rafael Holdings, Inc.) BOLTED last week - a classic insider play! May also still have room in the tank. This $16.7M buy is your classic ‘conviction’ play. Note that share price was already running… (screen shots below) We'll review these along with the tickers we're watching during today's VIP member event

Also note they should keep an eye out for a deep dive scan session this Friday... so come with questions and/or keep an eye out for the recording! Plenty more to chase... keep an eye on buys during this down market action!

Happy Trading! Jason & Team WealthMintr

Despite the choppiness, May turned out to be a very bullish month as the major indexes posted solid gains. With earnings season winding down, and volatility still slightly elevated, savvy traders are looking for clues to confirm a possible summer rally - or signs of a market top.

The second quarter earnings season starts in early July and until then, economic and geopolitical news, will likely drive price action. We have warned a close above 24-26 on the Volatility Index (VIX) would be bearish for the market while closes below 17.50 would be bullish for the major indexes.

Aside from the VIX, we are also watching major support and resistance levels for the major indexes like a hawk. Additionally, we also like to track the Dow Jones Transportation Average (DJT) as the index can sometimes offer important clues on how the Dow Jones might trade.

The Dow Transports often act as a leading or confirming indicator for the Dow and the broader market, in general. If you're seeing divergences between the Dow and Dow Transports, it’s worth doing further research as it might signal a turning point or loss of momentum.

This theory, or relationship, between the blue-chips and the transports is rooted in a century-old principle known as Dow Theory, which remains influential among technical analysts. Historically, the Dow Theory suggests the stock market is in an uptrend if both the Dow Jones Industrials Average and the Transports are making higher highs. These factors would also confirm a possible bull market or economic strength.

A deeper dive into Dow theory also suggests that if the Dow is rising but the Transports are lagging or falling, this could signal bearish divergence and cracks in the economy. If the Transports break sharply lower it could be a warning signal that the Dow may follow its lead shortly afterwards. And finally, if the Transports are leading the Dow higher, this is a bullish signal and means demand and growth could be picking up.

With this being said, Dow Theory is not a timing tool, and is better used for possible trend confirmation. In other words, this analysis is more reliable over weeks and months, not day-to-day. The Transport stocks are and heavily tied to economic trends like fuel prices, e-commerce volume, and supply chains.

As far as the charts for both, let’s take a look at the Dow Jones Transportation Index (DJT), first. The May 12th breakout above the 50-day moving average was a bullish development but fell shy of key resistance at 15,250. A six-session trading range followed before a pullback towards the 50-day moving average. The recent action is still holding an uptrend line with resistance at 15,250 forming an ascending triangle. This is typically a bullish setup for a breakout, or higher highs, if cleared and held.

A drop below 14,500-14,250 and out of this technical formation would be a bearish development. Closes below the latter would likely confirm a near-term top for the Transports and possibly the overall market.

There are 20 companies in DJT that include the major airlines (Delta, American), railroads (Union Pacific, CSX), trucking (J.B. Hunt, Old Dominion), and shipping and logistics (FedEx, UPS). It can also helpful to check the price action in some of these individual stocks to confirm price action.

As far as the Dow, key resistance levels are at 42,400 and the 200-day moving average followed by 42,800. Support is at 41,000 and the 50-day moving average.

In summary, watch for multiple closes above 15,250 on the Dow Jones Transportation Index, then 42,400 and 42,800 for the Dow. If all of these levels are cleared and held, a summer rally could be in store for the stock market.

Closes below 14,250 on the Dow Jones Transportation Index and closes below 41,000 and the 50-day moving average on the Dow could be bearish developments for the stock market.

As far as trading the Transports, the S&P Transportation Index (XTN) is also showing an ascending triangle pattern with a possible breakout occurring on continued closes above $80. The next waves of resistance would be at $82 and 200-day moving average followed by $84. A close below support at $74 and the 50-day moving average would suggest a near-term top.

Market Posts Bullish Numbers for May

Wall Street was mostly weak on Friday after the Trump administration indicated trade negotiations with China is at a stalemate and may require the Presidents from both parties to come together for the next possible steps. Volatility spiked above a key level of resistance shortly after the open following the news before the major indexes made a late day comeback off the lows.

The Nasdaq fell to a low of 18,847 before ending at 19,113 (-0.3%). Key support at 19,000 was cracked but held. Resistance remains at 19,250.

The S&P 500 closed just a half-point lower at 5,911 (-0.01%) after bottoming at 5,843. Key support at 5,850 held. Resistance is at 5,950.

The Dow traded up to 42,376 while settling at 42,270 (+0.1%). Resistance at 42,250 was recovered. Support is at 42,000.

Earnings and Economic News

Before the open: Campbell Soup (CPB), Science Applications International (SAIC)

After the close: Credo Technology Group (CRDO), Pyramid Oil (PDO)

Economic News

PMI Manufacturing Index - 9:45am

Construction Spending - 10:00am

ISM Manufacturing Index - 10:00am

Technical Outlook and Market Thoughts

For the week, the Nasdaq was up 2% while the S&P rose 1.9%. The Dow added 1.6% and the Russell gained 1.4%. For the month of May, the Nasdaq surged over 10%; the S&P jumped 6%; the Russell rallied 5%; and the Dow soared 4%.

Once again, the uptrend channels held for the Dow and the Nasdaq with the S&P’s getting stretched. The Russell fell out of its uptrend channel on May 21st but an adjusted uptrend channel off the May 23rd low keeps a fresh one in play.

This is another example of “stretch” and why we like to do daily technical analysis. In fact, throughout Friday’s action we were doing chart work and watching key support levels.

The Nasdaq remains in a 14-session trading range between 18,500-19,250 following the May 12th breakout. Thursday’s higher multi-month peak at 19,389 was a tease. Continued closes above 19,250, and a level the bulls need to recover to start the week, confirms a possible push towards 19,750-20,000.

A drop below 18,500 and the 200-day moving average would be bearish signals for lower lows down to 18,250-18,000. This level also represents the bottom of the current uptrend channel.

The S&P 500 remains rangebound between 5,800-5,975 with the May 23rd low at 5,767. Multiple closes below 5,800 and the 200-day moving average would suggest further weakness to 5,700-5,650.

Key resistance is at 5,950 with the May 19th top at 5,968. There is upside potential to 6,000-6,100 on closes above the aforementioned price points.

The Russell 2000 held its adjusted uptrend channel while hovering around 2,075. The March 24th and 25th hit a double top high at 2,110 with more crucial resistance at 2,135. If these levels are cleared and held, there is gap up potential towards 2,175-2,200 and the 200-day moving average.

Key support is at 2,050 with Friday’s low at 2,051. Multiple closes back below this level would imply a further slide down to 2,000 and the 50-day moving average.

The Dow has closed above 42,000 for four-straight sessions with backup support at 41,750-41,500. A close below 41,000 and the 50-day moving average would be a bearish development.

The bears have been holding 42,500 and the 200-day moving average for seven-straight sessions. Closes above 42,800, specifically, would be a bullish development for the blue-chips with further strength to 43,000-43,250.

The Volatility Index (VIX) bubbled to a high of 20.55 with key resistance at 20 getting topped but holding. Closes above resistance at 24-26 and the 50-day moving average would be a renewed bearish development for the stock market.

Closes below 17.50 are needed to give the bulls some momentum. There was one close below 17.50 on May 16th that teased the market.

With the first-quarter earnings season in the books, economic news and tariff concerns will likely dominate the headlines over the near-term. However, there will be a few notable companies reporting throughout June that could provide traders some clues on the economy and the consumer. Lululemon Athletica (LULU), DocuSign (DOCU) and Toro (TTC) highlight a busy Thursday.

The second-quarter closes on month end and companies will start to announce their numbers the second week of July. We expect a busy summer of trading so stay locked-and-loaded as a run to all-times highs could be coming, or another double-digit correction if key support levels start to crack.

With shares of Tesla (TSLA) breaking out to higher highs, investors might want to add Direxion Daily TSLA Bull 2X Shares (TSLL) to their Watch List. This is a leveraged exchanged-traded fund (ETF) designed to move 200% of the daily performance of Tesla stock. In other words, if TSLA is up or down 1%, TSLL will move 2%, or again, twice the action that TSLA does.

The ETF was created in August 2022 and has assets under management of just over $6 billion. The current dividend yield is just under 4% and is paid quarterly. This also makes TSLL a great covered call candidate as you can sell call options to get additional income on a monthly basis.

The chart below shows shares made a move from $11.20 on November 4th to $25.15 by December 5th of last year. If the 200-day moving average continues to hold, and shares can clear and hold $17 for multiple sessions, there is a chance for a quick trip to $19-$20.

There has also been some unusual options activity recently in TSLL. On May 21st, the stock closed at $14.08 with the TSLL July 25 calls at 70 cents. Volume for the session hit 5,185 contracts versus open interest of 31 contract beforehand.

Other popular and leveraged ETF’s include: Direxion Daily Semiconductor Bull 3X Shares (SOXL), ProShares UltraPro QQQ (TQQQ), and Direxion Daily S&P 500 Bull 3X Shares (SPXL).

It is important to note, the same risks that stocks have also apply to ETF’s but leveraged ETF’s can carry two and three times the risks/ rewards. Leveraged ETF’s have become popular and provide multiple exposure (again 2X or 3X) to the daily performance of the underlying stock or index.

Leveraged ETF’s are a speculative way for traders looking to capitalize on short-term market moves without engaging in derivatives or futures. They also offer a way for traders to capture the whiplash of sentiment-driven markets.

A key consideration when trading leveraged ETF’s is that they are intended for short-term trading, for the most part. They are highly volatile and suitable for traders that actively manage their portfolios and understand the risks associated with leveraged ETF’s.

Nvidia (NVDA) Tops Estimates

The stock market rebounded on Tuesday following a three-day holiday weekend to keep the current uptrend channels intact. Wednesday’s slight pullback came ahead of Nvidia’s earnings as traders were hesitant to put fresh money to work.

The Nasdaq closed at 19,100 (-0.5%) after testing a low of 19,084. Key support at 19,000 held. Resistance is at 19,250.

The S&P 500 reached a peak of 5,939 before settling lower at 5,888 (-0.6%). Support at 5,800 held. Resistance is at 5,950.

The Dow finished at 42,098 (-0.6%) with the intraday low at 42,042. Support at 42,000 held. Resistance is at 42,250.

Earnings and Economic News

Before the open: Best Buy (BBY), Burlington Stores (BURL), Foot Locker (FL), Kohl’s (KSS)

After the close: American Eagle Outfitters (AEO), Dell Technologies (DELL), Marvell Technology Group (MRVL), Zscaler (ZS)

Economic news:

Initial Jobless Claims - 8:30am

GDP - 8:30am

Pending Home Sales - 10:00am

Technical Outlook and Market Thoughts

It was crucial the current uptrend channels held to start the week with volatility easing, or at least holding key resistance. While there was a little wiggle room for some stretch, Tuesday’s 2% market rebound remained an ongoing bullish signal as key resistance levels were cleared, or challenged.

Wednesday’s slight pullback kept the blue-chips below the 200-day moving average. The S&P and the Nasdaq cleared their 200-day moving averages on the May 12th breakout. The small-caps remain trapped between the 50-day and 200-day moving averages but could catch fire if the mid-month high is cleared.

The Nasdaq remains in a 12-session trading range between 18,500-19,250 following the May 12th breakout. Wednesday’s multi-month peak reached 19,276 with closes above 19,250 confirming a possible push towards 19,750-20,000.

A close below 18,500 and the 200-day moving average would be a slightly bearish development with additional weakness to 18,250-18,000.

The S&P 500 is also in a 12-session trading range between 5,800-5,975 with Wednesday’s top at 5,939. Multiple closes above 5,975 and the monthly peak at 5,968 would indicate ongoing strength to 6,000-6,100.

Key support is now at 5,850. There is stretch down to 5,800 and the 200-day moving average on a close below this level.

The Russell 2000 traded up to 2,114 on May 16th with Wednesday’s peak at 2,092. The March 24th and 25th hit a double top high at 2,110 with more crucial resistance at 2,135. This level failed to hold as crucial support on the March 1st 3% selloff in the index. If all of the aforementioned levels are cleared and held, there is potential for a resumed and quick v-shape recovery up to 2,175-2,200 and the 200-day moving average.

Key support is at 2,050. A drop back below this level would suggest a retest to 2,000 and the 50-day moving average.

The Dow cleared its 200-day moving average on Wednesday but a level that has held both days this week. Multiple closes above 42,250 gets 42,750-43,000 back in play with the prior Monday’s peak at 42,842.

Key support is at 42,000 with backup help at 41,750-41,500. A close below 41,000 and the 50-day moving average would imply a near-term top for the blue-chips.

The Volatility Index (VIX) fell 15% on Tuesday and closed back below key support at 20. The more important target remains at 17.50 with multiple closes below this level confirming a run to all-time highs for the major indexes. There was one close below 17.50 on May 16th after this level was tested seven-straight sessions earlier this month.

Any move, or close, on the VIX above resistance at 24, or 26 and the 50-day moving average, should be taken seriously, as it would be a bearish development for the market.

Dow component, Nvidia (NVDA), announced earnings after Wednesday’s close that topped Wall Street’s forecasts. The company posted an adjusted profit of $0.96 a share versus expectations of $0.93 a share. Revenue of $44 billion also cleared estimates for a print of $43.3 billion.

Shares were up 5% in after-hours action and above $141. This should lead to a positive open for Thursday, providing the gains hold. We have been busy this week as we wanted to take advantage of the possible breakout to higher highs. We could still have Alert updates, and possible New Alerts, the rest of the week so stay locked-and-loaded.

Unusual Options Activity (UOA) is a scan traders use to possibly identify option trades that significantly deviate from a stock’s typical volume or open interest. These occurrences highlight atypical trading patterns in the options market, such as a major spike in volume, large blocks of options bought at specific strike prices, or activity that deviates from historical norms.

UOA trades can sometimes indicate traders or investors are expecting a major move in the underlying stock, up or down, and are positioning themselves ahead of an anticipated market-moving event. This could be possible earnings news (beat or a miss), major products announcements, clinical drug trials, major contract awards, or management news (CEO hire or fire).

From a bullish standpoint, a sudden spike in call option buying might suggest expectations of a stock price increase due to the aforementioned events. A surge in a particular put option buying might imply expectations for a stock price decrease or selloff.

There are a number of key signs and filters you can look for and use when scanning for unusual options activity. The first is high volume relative to open interest. In other words, you want to look for a particular option that traded 50,000 contracts (which is five million shares now under control) in a session versus open interest of 100 contracts, or less.

If the open interest is high, traders often look for volume that day that is five or 10 times higher. For example, if open interest is already at 1,000 contracts and volume for the session tops 10,000 - that is a candidate for unusual options activity.

Teva Pharmaceuticals (TEVA) is a recent example where traders are expecting major price movement by early June as there was heavy action on May 21st in the June 17.50 and June 19 calls that expire on June 6th.

Volume approached 75,000 and over 87,000 in the two aforementioned options and is suggesting traders are expecting a pop towards $20. Volume in the TEVA June 18 calls that expire on June 6th nearly tripped 3,000 on Friday and is still showing traders are buying near-term call options.

Other signs of UOA can include large premium trades where institutions are putting millions into one strike price and sweeps, where you see orders that aggressively filled across multiple exchanges. This can signal urgency.

If there is high volume in deep out-of-the-money options from the current stock price, this can indicate unusual options activity as traders are betting on speculative moves. Implied volatility spikes can also suggest traders are expecting a big move over the near-term, and sometimes longer-term.

It is also important to note that not all UOA is directional, some can be hedges and why it is important to do further research. This could include technical and fundamental analysis.

Aside from directional bets on unusual options activity, traders often use credit spreads and straddles or strangles. If doing a credit spread, you will want to analyze whether UOA points to near-term or long-term conviction and construct bull call spreads or bear put spreads, accordingly.

Straddles or strangles are basically hedges where you buy both a call and put option. This will provide protection, or a profit, if a trader is uncertain of the direction and is just anticipating a very large stock increase, or decrease, of at least double-digits.

With any strategy, there are no guaranteed outcomes from following unusual options activity and it doesn't always lead to an expected stock breakout or breakdown.

Shares of Groupon (GRPN) recently broke out to a fresh 52-week high of $26.90 following an earnings beat on both the top and bottom lines. The company reported a profit of 17 cents a share versus forecasts for a loss of 12 cents. Revenue of $117 million also cleared forecasts for a print of $115 million.

In the previous quarter, the company reported a loss of $1.20 a share while estimates were for a loss of four cents. Revenue of $130 million was 2% higher than expectations for $127.7 million.

Groupon provides an e-commerce platform that connects customers with local businesses offering discounted deals. Some of their partners might include local merchants such as restaurants, gyms, and event organizers.

They emphasize a pay-for-performance business model, meaning the merchant only incurs a cost when a sale is made through the platform. Groupon’s revenue is mainly derived from commissions, advertising services, and subscription programs.

The company earns a percentage of each deal sold, typically in the range of 30%-50% of the deal’s value. Merchants can also pay for enhanced visibility through sponsored placements on the company’s website and targeted marketing campaigns.

Shares zoomed 42% on May 8th after closing at $24.21, up $7.23, from the May 7th close at $16.98. On March 12th, shares skyrocketed 43% after earnings to close at $13.98, up $4.21, from the previous session close at $9.77. Back in November, the stock fell 27% despite an earnings beat as revenue missed forecasts.

A mini trading range has formed between $25-$27 since the earnings announcement. There is gap down potential to $20 if shares fall below $24. Continued closes above $26.50 could lead to another breakout with upside to $31 and resistance from January 2022.

Two days ahead of earnings, there was some unusual options activity in the GRPN June 22 (weekly) calls that expire on June 6th, 2025. Volume on May 5th came in at 5,000 for the session with the stock at $16.78. Open interest at the time was only one contract. This suggested traders, or maybe one trader, expected a massive move in the stock. History also showed the possibility was there for an explosive breakout, or breakdown.

These calls options closed at 45 cents on May 5th. After the 42% pop in the stock, these calls were trading at $4.40 on the May 13th close. The return was an astronomical 878%.

We will keep Groupon on our Watch List for another trading opportunity as another massive could be coming.

Volatility Closes Below Key Support (Slightly Bullish)

The stock market was mixed on Thursday with Tech and the blue-chips showing weakness to close out the shortened week. Much of the Dow’s damage can be blamed on the 22% plunge in shares of UnitedHealth (UNH) following the company’s earnings miss.

The Nasdaq closed at 16,286 (-0.1%) with the low hitting 16,181. Support at 16,250 was cracked but held. Resistance remains at 16,750.

The S&P 500 traded down to 5,255 before settling at 5,282 (+0.1%). Support at 5,200 held. Resistance is at 5,400.

The Dow finished at 39,142 (-1.3%). Support at 39,000 held. Resistance is at 39,500.

Earnings and Economic News

Before the open: Bank of Hawaii (BOH), Capital City Bank Group (CCBG), Dynex Capital (DX), Washington Trust (WASH)

After the close: Calix (CALX), W.R. Berkley (WRB), Zions Bancorporation (ZION)

Economic News

Leading Indicators - 10:00am

Technical Outlook and Market Thoughts

Although the bears won the shortened week, the Volatility Index (VIX) closed below a key level of support (30) that had served as prior resistance ahead of the three-day selloff from the beginning of the month. For new subscribers, a rising VIX is bearish for the market while a falling VIX is bullish for the major indexes.

We mentioned a close below 30 last week on the VIX would be slightly bullish for the market. However, this level needs to hold throughout this week with a big push lower towards 27.50 and then 24.

There is wiggle room up to 35 on a move back above 30 with last Monday and Wednesday’s highs at 35.17 and 34.96, respectively. If 35 clears, 40-45 could come quickly.

The Nasdaq fell back below 16,750 on Wednesday with an inside day afterwards, meaning a higher high or lower low was not made on Thursday. The back-to-back closes above this level to start last week was a tease with the top of the downtrend channel at 17,000. We would like to see 17,500 cleared before we would call a possible near-term bottom.

Key support is at 16,000 with a move below this level getting 15,750-15,500 in focus. The low for the month and year is at 14,784 which represented a 27% drop from the all-time high of 20,204 from December 16th.

The Russell 2000 went out at 1,880 (+0.9%) with the high at 1,887. Key resistance at 1,900 easily held. Multiple closes above this level and last Tuesday’s top at 1,902 could lead to a quick trip to 2,000.

Support is at 1,850-1,825. A close below 1,800 likely leads to further weakness down to 1,750-1,725.

The S&P held current support at 5,200 throughout last week with the low at 5,220. There is wiggle room down to 5,100 with a close below this level suggesting weakness to 4,900-4,800. The 50-day moving average recently fell below the 200-day moving average earlier this month to form a death-cross and typically signals lower lows.

Resistance is at 5,300-5,350 followed by 5,400. We would like to see 5,500 cleared and held before saying a near-term bottom is in for the index.

The Dow fell back into its downtrend channel on Wednesday and towards the middle on Thursday. Support is at 39,000 and 1,000-point intervals afterwards. The April 7th low is at 36,611 and represents a 19% drubbing from the December 4th all-time high at 45,073.

Key resistance remains at 40,500 with multiple closes above this level implying additional upside towards 42,000. The 50-day moving average closed below the 200-day moving average on Thursday to officially form a death-cross near 42,200.

After Thursday’s close, Netflix (NFLX) posted a solid beat as earnings per share of $6.61 topped forecasts for a print of $5.67. Revenue of $10.54 billion also outpaced estimates of $10.5 billion for the quarter.

Shares were back above the $1,000 mark in after-hours with the recent all-time high at $1064.50 from February 14th. NFLX is one of our favorite stocks to do credit spreads, and if the gains hold, the action should provide a lift to Monday’s open.

The technical outlook still favors the bears as downtrend channels remain firmly outlined. This is a big week for earnings and there could be trade deals announced so any massive moves, or short-covering, could help the bulls and improve the picture.

Fed Comments Stall Momentum

Wall Street showed weakness on Wednesday after Fed Chair Powell said tariffs could drive up inflation over the near-term while pushing them further away from their goals. He went on to say the central bank could find itself in a dilemma between controlling inflation and supporting economic growth. This spooked the major indexes and forced a rejection at key resistance levels.

The Nasdaq traded to a low of 16,066 before settling at 16,307 (-3.1%). Support at 16,250. Resistance remains at 16,750.

The S&P 500 closed at 5,275 (-2.2%) with the intraday low hitting 5,220. Support at 5,200 held. Resistance is at 5,400.

The Dow slipped to a low of 39,394 while ending at 39,669 (-1.7%). Support at 39,500 held. Resistance remains at 40,500.

Earnings and Economic News

Before the open: Alley Financial (ALLY), Blackstone (BX), Charles Schwab (SCHW), KeyCorp (KEY), Snap-On (SNA), Taiwan Semiconductor (TSM), UnitedHealth Group (UNH)

After the close: Marten Transport (MRTN), Netflix (NFLX)

Economic news:

Initial Jobless Claims - 8:30am

Philadelphia Fed Manufacturing Survey - 8:30am

Building Permits - 8:30am

Housing Starts- 8:30am

Technical Outlook and Market Thoughts

The first clue the market needed to see this week that a possible near-term bottom could be forming is the easing in volatility. That has failed to materialize. Given the fact that it is also the start of the first-quarter earnings season, as well, multiple closes below 30 in the VIX was needed.

The Volatility Index (VIX) flirted with closing below key support at 30 on Monday and Tuesday and for the first time since April 3rd. This also marked the start of a massive three-day selloff that has established a trading range between 30-60 since the close above the former. Tuesday’s low at 28.29 pushed the next layers of support at 27.50-27.

We talked about the bulls likely needing multiple closes below 24-20 on the VIX before a near-term bottom could be CONFIRMED for the market and Wednesday’s low reached 29.48. The reversal to 34.96 was slightly bearish and likely won’t convince traders to stay long over the upcoming three-day weekend.

Resistance is at 35 followed by 37.50. A move above 40 likely gets 45-60 back in focus. A move above 65 and the August 5th peak at 65.73 could get 85 and the November 2023 highs in focus. This is where we also predict a capitulation moment for the market might occur although some may argue it already has.

The Nasdaq cleared and held key resistance at 16,750 to start the week and on Tuesday’s slight weakness. Additional hurdles remain at 17,000-17,250 following Wednesday’s 3% drubbing.

Support for Thursday is at 16,000-15,750. A move below the latter would indicate a retest to 14,800 with the prior Monday’s low at 14,784.

The Russell 2000 closed at 1,863 (-1%) with the low at 1,842. Upper support at 1,850-1,825 was tripped but held. A close below 1,800 likely leads to a further fade back to 1,750-1,725.

Key resistance remains at 1,900 with Tuesday’s top at 1,902. Multiple closes above this level keeps a possible 5% pop to 2,000 in play.

The S&P came within 1% of clearing key resistance at 5,500 on Monday and Tuesday but never really mounted a serious threat. Closes above this level and out of the current downtrend channel would be slightly bullish.

Support is at 5,200 with Wednesday’s bottom at 5,220. There is stretch down to 5,100 with a close below this level implying another retest down to 4,900-4,800 with last Monday’s low at 4,835. The 50-day moving average recently fell below the 200-day moving average to form a death-cross and typically signals lower lows.

The Dow recovered key resistance at 40,500 on Monday but closed back below this level on Tuesday. Multiple closes above 40,500 would suggest strength to 42,000. The 50-day moving average is less than 100 points away from falling below the 200-day moving average.

Support is at 39,500. Closes below this level would indicate weakness towards 37,000-36,500 with the prior Monday’s low at 36,611.

As a reminder, the market will be closed for Good Friday and Thursday is options expiration for regular monthly April options. This could add some extra spice to today’s session, especially if the first wave of support levels fail to hold.

JPMorgan (JPM) announced better-than-expected numbers to start the first-quarter earnings season and provided a much needed lift to the financial sector. The major indexes traded in tighter ranges on Thursday and Friday with key resistance levels that were stretched on Wednesday holding. The prior Thursday’s start of a three-day selling spree has established trading ranges of 10%-11% that highlight support, as well. There could be trade deals announced as early as this week as a number of high ranking officials from across the pond and around the globe are expected to meet at the White House. The biggest wild card remains China and the one country that will help a massive rebound rally, or a drop to fresh 52-week lows.

8:00am (EST)

The stock market showed strength on Friday following comments from the White House that President Trump is optimistic China will seek a deal. The news came after China retaliated by raising its tariff rate on US products to 125% from 84%. Goods from China will see a rate of 145%. Meanwhile, JPMorgan (JPM) announced better-than-expected numbers to start the first-quarter earnings season and provided a much needed lift to the financial sector.

The Nasdaq closed at 16,724 (+2.1%) with the high hitting 16,753. Resistance at 16,750 was cleared but held. Support is at 16,250.

The S&P 500 reached a peak of 5,381 before ending at 5,363 (+1.8%). Resistance at 5,400 held. Support is at 5,200.

The Dow went out at 40,212 (+1.6%) after tagging a high of 40,404. Resistance at 40,500 held. Support is at 39,000.

Earnings and Economic News

Before the open: AstroNova (ALOT), Goldman Sachs (GS), M&T Bank (MTB)

After the close: Applied Digital (APLD), FB Financial (FBK), Health In Tech (HIT)

Economic News

None

Technical Outlook and Market Thoughts

The major indexes traded in tighter ranges on Thursday and Friday with key resistance levels that were stretched on Wednesday holding. The prior Thursday’s start of a three-day selling spree has established trading ranges of 10%-11% that highlight support, as well.

Trading ranges ahead of quarterly earnings aren’t surprising as Wall Street awaits the results that could help spur bullish or bearish momentum. However, a range of double-digits is rare for any time frame, let alone earnings season. This event takes place four times a year and typically when stocks make their biggest moves.

The bulls needed to see some follow thru following the 12% surge in the Nasdaq on Wednesday but that action didn’t happen. We mentioned the technical outlook remained bearish on Thursday morning as death-crosses remain in play for the major indexes. The Russell already warned savvy traders in mid-March lower lows were coming and something we were well prepared for.

The action also showed us clear downtrend channels we can use to watch for lower lows, or when a bottom could occur. The resistance levels are at, or near, the top, of the downtrend channels so this will be helpful clues on keeping us one-step ahead of the action.

The Russell 2000 closed at 1,860 and the session high with key resistance at 1,900 holding. Wednesday’s close above this level teased a possible 5% surge to 2,000 but several layers of resistance at 2,075-2,100 and the 50-day moving average remain afterwards.

Key support is at 1,725. A close below this level likely gets the November 2023 lows at 1,633 and 1,635 in the picture. This area would represent a 34% spanking from the all-time high of 2,466 from last November.

The Nasdaq failed to hold and recover 16,750 to close out the week with additional hurdles at 17,000-17,250. A pop above 17,500 and the top of the downtrend channel might suggest a near-term bottom with more intense resistance at 18,000-18,500 and a freshly formed death-cross from last week.

Shaky support is at 16,000-15,750. A move below the latter would indicate a retest to 14,800 with last Monday’s low at 14,784.

The S&P made a higher high on Friday but struggled at clearing 5,400. Continued closes above 5,500 and out of the current downtrend channel would be a slightly bullish development as there is gap up potential to 5,700. However, the 50-day moving average is just over six points away from falling below the 200-day moving average to form a dearth-cross.

Support is at 5,100 with stretch down to 5,000. A close below the latter would reopen downside pressure to 4,900-4,800 with last Monday’s low at 4,835.

The Dow fell just shy of reclaiming 40,500 and the top of the downtrend channel following Wednesday’s close above this level. There is upside to 42,000 if cleared and held for multiple sessions but the 50-day moving average is less than 1% away from sliding under the 200-day moving average.

Support is at 40,000 followed 38,500. Closes below the latter would imply another round of weakness towards 37,000-36,500 with last Monday’s low at 36,611.

The Volatility Index (VIX) has also established a trading range from 30 to 60 following the prior Thursday’s close at 30.02. On March 14th, we noted a close above 30 would be a blood in the streets moment. The VIX surged 50% the following session to close above 45 with last Monday’s peak at 60.13. We have noted a move above 65 and the August 5th peak at 65.73 could get 85 and the November 2023 highs in focus. This is also where we also predict a capitulation moment might occur.

Same deal as last week as far as support. Closes back below 30 on the VIX would be slightly bullish. However, the bulls likely need multiple closes below 24-20 before a near-term bottom can be confirmed for the market.

There could be trade deals announced as early as this week as a number of high ranking officials from across the pond and around the globe are expected to meet at the White House. The biggest wild card remains China and the one country that will help a massive rebound rally, or a drop to fresh 52-week lows.

The market will be closed this Friday and the regular monthly April options will expire Thursday. The financial stocks will be ones to watch this week as the first-quarter earnings season will start to get going. The next four weeks promises to be exciting but daily homework will be needed to avoid getting whipsawed out of new positions.

We would like to see the VIX get below 24-20 to do credit spreads and new covered call alerts. We are off to another incredible start for the year and we don’t need to force the action. We will still hunt for opportunities but keep in mind we might stay on the sidelines for another week or so. However, we do like the current volatility for directional option plays and triple-digit winners so stay locked-and-loaded in case we take action.