What They Won't Tell You About This Rally

TheEquityBluprint
05-05

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.  

Key Resistance Level: Will S&P 500 Break Out or Turn Lower?
The S&P 500 has rebounded to 5,650 points—its level before April’s sharp sell-off and a key technical resistance zone. Following strong earnings reports from the Magnificent 7, this week’s market focus shifts to the FOMC and its signals on interest rate cuts. The market is still pricing in three rate cuts this year. ------------- Can the S&P 500 successfully break above the 5,600 level, or will it turn lower? And more importantly, can it overcome the seasonal “Sell in May” pattern?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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