Is This Still a Genuine Broad Market Rally?

We are actually in a 'hard penny' environment right now. A snapshot of my situational read, shaped by breadth, leading index extension, and relative strength across segments and sectors at both equal and cap-weighted level.

Leading Index Breadth $Invesco QQQ(QQQ)$ :

NDFI breadth continues to hold above the 80% mark, having regained strength following brief weakness on May 23rd and May 29th.

Leading Index Extension QQQ:

Meanwhile, QQQ is currently extended by 5.6x its ATR% from the 50-MA, a more stretched level than the previous peaks on December 17th, 2024, and February 21st, 2025. though historical precedents (e.g. July 9th, 2024, and December 29th, 2023) show that QQQ rallies have stretched as far as 8x ATR% extensions before correction.

Is This Still a Genuine Broad Market Rally? Diving into Segment and Sectorial Relative Strength:

Broad market strength is only supported until 12th May, before $Vanguard Mega Cap Growth ETF(MGK)$ $iShares S&P 500 Growth ETF(IVW)$ (Mega Cap Growth) in both Technology and Industrial continue its trajectory (also Cap Weighted $Consumer Discretionary Select Sector SPDR Fund(XLY)$ led by $INVESCO LEISURE AND ENTERTAINMENT ETF(PEJ)$ $AdvisorShares Restaurant ETF(EATZ)$ $Amplify Online Retail ETF(IBUY)$ groups).

Highlighted sectors is also supported by leading groups in $Innovator IBD 50 ETF(FFTY)$ $SPDR S&P Aerospace & Defense ETF(XAR)$ $INVESCO LEISURE AND ENTERTAINMENT ETF(PEJ)$ but there are more segments faltering, than gaining in strength right now. Leadership in mega cap liquid names remain in $Robinhood(HOOD)$ $NVIDIA(NVDA)$ $AppLovin Corporation(APP)$ $Meta Platforms, Inc.(META)$ $Netflix(NFLX)$ that continue to push higher everyday. Those names are all already exceeding 6 x ATR% multiple extension from 50-MA (HOOD is at 9, second time since IPO in 2021).

What are in my watchlist (I'm still currently heavy long with the same position with no stop out):

Focus (After Pre-market NFP Friday):

Weakest Sector: Energy $Direxion Daily Energy Bear 2x Shares(ERY)$ (Inverse 2x Long)

Stalk (Primary rotation back to core and value play):

$Consumer Discretionary Select Sector SPDR Fund(XLY)$ $SPDR S&P Retail ETF(XRT)$ via $Direxion Daily Retail Bull 3X Shares(RETL)$ $Real Estate Select Sector SPDR Fund(XLRE)$ (via $Direxion Daily Real Estate Bull 3X Shares(DRN)$), $Communication Services Select Sector SPDR Fund(XLC)$ $Destiny Tech100 Inc(DXYZ)$ (lowest priority for now), $Spdr S&P Biotech Etf(XBI)$ (via $Direxion Daily S&P Biotech Bull 3x Shares(LABU)$ ). $iShares Russell 2000 ETF(IWM)$ via $Direxion Daily Small Cap Bull 3x Shares(TNA)$ is also a inverse head and shoulder pattern now, though it's lagging.

Summary:

Not the period to chase but above are some great play if they could hold their price structure if market pullback.

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