The headlines were chaotic. Tariff tantrums. A sudden breakdown in U.S.-Canada trade talks. Digital service tax drama. Presidential proclamations. You’d expect markets to panic. But they didn’t. Instead, stocks broke out to new all-time highs. Not once, but twice. And that action is telling you something important... if you’re paying attention. Markets Climb Walls of Worry The S&P 500 and Nasdaq both sold off early Friday after a surprise message from Trump on Truth Social: all trade discussions with Canada had been abruptly terminated. The reason? A digital tax targeting U.S. tech companies was going live. But by the close, the indexes weren’t lower, they were higher. All-time high territory. Then Canada dropped the tax. And the rally continued into Monday. This is what bull markets do. They shrug off bad news. And this kind of price action; fear, then strength, is more than just noise. It’s a tell. It’s a signal that risk appetite is real. Momentum > Mayhem Technically, we’re in a strong uptrend. Price channels remain intact. Futures are above long-term averages. And even after a sharp rally since April’s lows, there’s no meaningful sign of broad exhaustion. Relative Strength Index (RSI) levels are elevated, yes. But elevated doesn’t mean reversal. In fact, overbought readings are common during strong bull legs. That doesn’t mean the market will melt straight upward. But it does mean you can’t dismiss the strength just because you missed the first leg. What Could Break the Trend? We’re watching a few key events:
We could see a short-term breather if employment numbers come in hot or if fiscal spending negotiations stall. But here’s what matters more: Even geopolitical shocks—like escalating conflict in the Middle East—haven’t rattled markets. Volatility remains low. The VIX has dropped back near 16, erasing its spike from just weeks ago. If you’re looking for an edge, this is it. Bull markets reward buyers, not skeptics. Avoiding the Wrong Lessons Yes, you want to be selective. Concentration in the S&P’s top 10 stocks is rising. And plenty of high-flying names have zero earnings backing them. But that doesn’t mean go to cash. It means pick your shots. Be deliberate. Find real setups in strong sectors with tailwinds. For instance, we’re tracking several overlooked AI plays, names that haven’t run yet, but will benefit from infrastructure demand and backend adoption. Those are the kinds of plays that thrive when markets grind higher in the background and its also the kind of information out paid members get access to. Final Thought Markets aren’t supposed to make this much sense. They’re supposed to frustrate traders and confound logic. But right now, price action is clean, the setup is real, and the opportunity is still alive. Don’t wait for the perfect pullback that never comes. This is what stealth bull markets look like. Become a paid member today. ... Continue reading this post for free in the Substack app
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Tuesday, July 1, 2025
Forget the Fear—Here’s Why the Rally Has Legs
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