To The Moon

U.S. equity markets closed the holiday-shortened week of May 25 with meaningful gains and new record highs across the major indices. The S&P 500 $S&P 500(.SPX)$ added 1.4% to settle at 7,580, completing

its 9th consecutive weekly advance. The Nasdaq 100 $NASDAQ 100(NDX)$ led the tape with a 2.9% gain to close at 30,333. The Dow $Dow Jones(.DJI)$ added 0.9% to finish at 51,032, while the Russell 2000 $iShares Russell 2000 ETF(IWM)$ gained 1.7% to close at 2,919.

Investors rotated into growth through the week validating bullish setups anticipated in this publication last week for $Apple(AAPL)$ (+4.1%), $Microsoft(MSFT)$ (+7.5%), $Tesla Motors(TSLA)$ (+3.4%), and $Eli Lilly(LLY)$ (+6.1%). All of them reaching levels anticipated one week before 🎯🎯🎯🎯.

Technology drove the bulk of the advance, with artificial intelligence spending expectations continuing to set the tone. Micron crossed a historic threshold this week, surpassing $1 trillion in market capitalization. Computer hardware surged late in the week after $Dell Technologies Inc.(DELL)$ and $NetApp(NTAP)$ both delivered earnings that exceeded expectations, lifting the infrastructure group broadly. On the software side, $Microsoft(MSFT)$ provided support after announcing an upcoming AI-native coding framework. $Oracle(ORCL)$ and $Snowflake(SNOW)$ each posted double-digit percentage gains on the week.

Crude oil fell 9.5% to settle at $87.7 per barrel after reports emerged of a provisional 60-day ceasefire framework between the United States and Iran targeting the Strait of Hormuz. The energy drop pulled Treasury yields lower, with the 10-year settling at 4.45%. Core inflation came in at 3.3% year-over-year for April, keeping the Federal Reserve in a wait-and-see posture on rate cuts. Gold faced pressure and settled at $4,560 per ounce after bouncing from a key support line studied below in the paid content.

Key Economic Events Next Week:

Next week will be crucial for two reasons:

1. The SPX has to prove the latest weekly move holding this price zone, and specifically its central weekly level that differentiates between bullish momentum and consolidation or bearish reversal if it is breached. For the complete set of levels included NDX, QQQ, SPY, DIA, all the Magnificent Seven, Futures, and other megacaps make sure to read the updated levels posted yesterday after the close, they have audio content guiding about the benefits of using levels.

2. The Semiconductor Giants must hold the line and keep the current valuations, price action is overbought across the board: $Micron Technology(MU)$ $Advanced Micro Devices(AMD)$ $Intel(INTC)$ $Texas Instruments(TXN)$ $Broadcom(AVGO)$, and others are overextended, and $NVIDIA(NVDA)$ is already in pullback mode after being overbought. We will study today, as usual, $VanEck Semiconductor ETF(SMH)$, NVDA, AMD and AVGO in the paid content below. Only one has a likely solid bullish setup, the others look toppy.

Sell in May and Goo Away?

There are widespread overextensions and open gaps to consider, not only in Semiconductors but across the SPX, NDX, and IWM. June is historically a strong month (finishing green in 9 out of the last 10 years with the sole exception of 2022, which was a midterm election year). We will soon see if June continues this dominant uptrend, or if it validates the alternative statistic marking it as the worst performing month of a midterm cycle.

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