To The Moon

This week, the S&P 500 surged 2.92% to 5,686, completely erasing its post-"Liberation Day" slump, while the Nasdaq jumped 3.42% to 17,977– another decisive move higher.

What’s Driving the Rally?

1. Earnings Are Beating – By a Lot

- 77% of S&P 500 companies have topped estimates so far, with an average beat of 9%– better than the 5-year (8.8%) and 10-year (7%) averages which means corporate America is delivering, justifying the market’s run-up.

2. Small Caps Are Waking Up

- After lagging for months, small-caps have broken out vs. the Equal-Weighted S&P 500 to their highest levels since March.

- This suggests broader market participation, not just mega-cap tech carrying the load.

The Big Question: How Much Higher?

The S&P 500 is now eyeing 5,740– a key psychological level. But here’s the thing:

- The rally is extended after a straight-up move.

- Short-term exhaustion signals are creeping in.

- A brief consolidation would be healthy before the next leg up.

What’s Next?

- Watch earnings momentum– the rally could stretch further if beats continue.

- Small-cap strength must hold– if it does, it’s a bullish sign for market breadth.

- Emerging markets & diversification– I’m scouting opportunities beyond U.S. equities for the next phase.

Bottom Line

This market remains bullish but not bulletproof. Earnings are strong, small-caps are joining the party, and the trend is up. But after such a sharp run, a pause or pullback wouldn’t be surprising– and could set up the next buying opportunity. 

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