Transcription
The S&P 500 just erased $1.75 trillion dollars in market cap just hours after the third strongest US jobs report in 18 months. Trump said stocks should be going up, not down. And the administration might buy equity stakes in US AI companies and will host a meeting with AI executives as soon as this week. Today we cover why stocks are falling, what to know, and where the action is right now.
Once you hear everything going on, you're going to realize that tomorrow will be even crazier. The SPY fell 2.58% on Friday, and we haven't seen a pullback like this since March. $1.75 trillion was erased from the stock market on Friday alone. So, let's talk about what just happened here because on the surface, it doesn't make sense.
The US economy added 172,000 jobs in May and that crushed expectations of 85,000 jobs. April's jobs data was also revised up another 64,000 jobs and unemployment came in at 4.3% which is right in line with expectations. By every measure, this is a strong jobs report, the second strongest in over a year, actually. And Trump even commented on how stocks should be going up off of this news.
When you get jobs numbers this strong, the market starts pricing out rate cuts. The market is actually now pricing in two rate hikes in 2027. Just months ago, markets saw up to four rate cuts in 2026 alone. The Federal Reserve has been watching inflation tick back up, partly because of energy costs from the Iran conflict, and a blowout jobs report gives them even less reasons to cut. So, what looks like good economic news on the surface is actually the market saying rates are probably staying higher for longer than we thought. And this is a headwind for stocks.
And guess what? There's an inflation report set to release in 3 days. It's expected to rise above 4% on the headline year-over-year reading. And on a quarter basis, it's expected to rise 0.1%. This will be one of the biggest events of the week, and we're going to cover it deeper as we get closer to it.
But the Iran war also just passed its 100th day, and Wall Street may finally be waking up to the reality that this war might last longer than they were expecting. Over the weekend, US forces struck Iranian coastal radar sites in the strait of Hormuz after shooting down drones launched by Iran that the US said posed a threat to maritime traffic. Iran retaliated against US bases in Kuwait and Bahrain with ballistic missiles. Six were intercepted and a seventh didn't reach its target. But also the fighting between Israeli forces and Hezbollah is continuing in Lebanon, which is adding another layer of complexity to any potential peace deal because Iran has required a ceasefire in Lebanon before it will agree to anything with the US. And Trump has posted twice over the past week about this to try and end this fighting. And the US will also attempt to redirect seized Iranian assets to Gulf states for rebuilding and repairs of damage caused by Iran as well as any future destruction as well. And this is likely to enrage Iran. So keep this news on the radar as it can impact the market.
But something else that that's impacting the market is that we're finally getting the long-awaited SpaceX IPO and it's actually set to start trading on Friday. And they also inked a deal last Friday where Google will pay them $920 million a month to lease their data centers. Even though this is a big upcoming event, it could also help explain some of the profit taking as it's creating great conditions to sell. Because as we know, the market has been up quite a bit recently. But as of Friday, we started to see a massive pullback start to take hold. And the SPY is actually now 3.02% away from all-time highs. There was a major support that we've been watching over the past few weeks right around the 748 to 750 zone that ended up breaking down on Friday and triggering a much larger and broader sell-off.
Something else that happened recently that we've talked about a lot is that the uptrend officially ended last week on Wednesday whenever the SPY fell initially. We did get that pop back on Thursday, but the SPY really failed to break through resistance and test the all-time high. It ended up rejecting very hard and now we're actually getting close to another major support down here around 730 to 732. This is going to be a big zone to watch for going into this week. The low from last week was close to 733.50. So if we see 733.50 break down, watch for the lower support of 730 and then 732 to start to come into play for a test. That was a massive drop though, Mike. And now the SPY has a lot of room to recover back up. And there are going to be a lot of resistances to watch for if it does pop up. 740 is going to be the first major one that I'm looking at along with 742 and 745 if we do end up seeing a recovery start to take place.
Yeah, we have a big week ahead of us. And another thing to be aware of is the seasonality typically associated with this time of year. We can see that on average June during midterm years tends to be pretty negative and we start to see it roll over right around this time of the month. We can see right when we get to like that sixth and seventh trading day in June, the average returns do go negative. And this data goes all the way back to 1950. So be aware of this. The returns on average are negative in months like this.
Yeah, the midterm year data here is pretty surprising. And we have even more because we actually had a negative Q1. And if we have a negative Q1 like we did in 2026 in midterm years, June actually finished negative 10 out of 11 times. This is some pretty significant statistics here to see that June went red that many times in a or that many times over the past few readings. And as we can actually tell, this is pretty negative as the year return percentage is also very low. With the market going green for the rest of the year, only 27% of the time with average percent returns of negative 8.7%. We could be in for a bit more pullback coming into play here.
As we're heading into the 108th trading day on Monday and as we actually look at these stats for the NASDAQ, it gets even worse. So this the NASDAQ closed down Friday 4.77%. And generally going into Mondays, it's pretty mixed. So it obviously doesn't go red every single time, but there are a lot of scenarios where we do see a lot of selling pressure. Kind of like March 9th of 2001 where the market fell 7.3%, February 16th of 2001 where it fell 5.3% and especially October 16th of 1987 where it fell 15%. And on average, the Monday return is negative at minus 1.76%. But of course, that doesn't mean every Monday is red. There have been some really bad Mondays, but there also have been some green Mondays and one really good Monday on April 14th of 2000. But it is worth paying attention to and being aware of this data, especially considering how badly the market fell on Friday.
And then looking at the market coming up over these next few days, the earnings calendar is mostly clear. So that's nice. But we do have Oracle and Adobe set to report on Wednesday and Thursday, which can be pretty big. So look out for that. But another thing to be aware of is that Trump said he will likely meet with AI companies at the White House this week to discuss what he called a federal government partnership that would allow the American people to profit in their success. So look out for companies like Google, Palantir and other AI related names um because you know if there's a deal they can move quite a bit and I think this will also be pretty interesting as we have the upcoming IPOs for SpaceX, OpenAI and Anthropic uh set to release.
Yeah, and those IPOs are going to have a lot of eyes watching them and even SpaceX coming up this Friday is going to be extremely exciting. So keep these stocks on the radar. But Mike, I think it's time for some setups and predictions for tomorrow. And speaking about SpaceX with my first play, I'm actually looking at Tesla to the downside. Last week, I did a lot of Tesla analysis, and we ended up looking at this massive uptrend that Tesla was on. But something that I've been waiting for is for this uptrend to eventually break down. And well, on Friday, we officially saw it. And we saw a big breakdown at that with it closing down 6.56% on the day. But you can tell it's it's obviously trading down and out of this wedge and it's solidified under $400 here. As long as Tesla sticks under $400 into this week, I'm going to keep looking for more downside opportunity.
I think that Tesla could actually be selling because Elon Musk has has almost like a cult-like following, right? Uh people really like to follow Elon Musk and the main way that you could follow him in the stock market was by trading Tesla. But of course, now SpaceX is entering the picture with potentially even more appeal as they have deals with their data centers and obviously high ambitions with space. So there's a lot to be said about Tesla and shareholders potentially selling to get into the SpaceX IPO or just rotate into SpaceX over time. But as I look at this, I will be watching Tesla down this week. The low from uh Friday is right around 389. And if we rebreak that, watch for the flood to continue.
>> Very interesting. Another stock that's close on watch is Meta. And they had some pretty big news on Friday where they announced they're considering raising tens of billions of dollars in a stock offering as it seeks new sources of capital. And what's interesting is Google just came out and announced that it plans to raise $85 billion in a stock offering. So basically some of these AI companies are looking to sell stock to raise capital which clearly isn't uh great news for existing shareholders because they get diluted. Meta stock fell by 5.5% on Friday and it has been moving in a relatively weak way compared to the market overall especially throughout this year. Meta's close on the radar this week where if we continue to see the market and especially Meta investors sell off this news, it can continue to offer some asymmetric movement. The more pressure Meta puts on its lows, especially around that like 580 level, I think the bigger the risk of an extended selloff there is for Meta. If we see that, there can be some short-term bearish opportunities with it. And if the stock holds up and rallies, then there's no need to even force a setup like this. Meta has been holding the 594 to 595 support and consolidating there a lot recently. It started to break down Friday, so I will be watching it closely as well, Mike.
But with my next setup, I'm looking at McDonald's to the upside, ticker symbol MCD. I know this is generally a pretty boring stock, but whenever you look at it, it can actually have some pretty massive moves, especially in the options market. As I look at MCD, a lot of times whenever it has these massive dips on the daily chart, we do see them start to get bought up in some pretty great ways. And something that I particularly like about this dip with McDonald's is that it's double bottoming pretty precisely right around 272. So, as long as that bottom starts to hold there, there could be a great swing potential to the upside. If you go ahead and take a long position, you stop out under the recent low and you target, let's say, critical resistance around $298 to $300, your risk reward is pretty solid, pushing the two range. I like that quite a bit. My only concern is that if we zoom out on a McDonald's stock or or on a longer term chart, you can actually see that it's following a long-term and broader trend. And something that I am worried about is it breaking through that double bottom and testing the trend before ultimately rising. I do think it would be safer to average into shares here at this point with McDonald's, but it's more of a value play and I could see traders attempting to rotate into some sort of safety throughout this time of turbulence with the overall market. Even though McDonald's is a very boring stock, it's options can move quite a bit. And what's nice about this rotation that we're seeing right now is sometimes the boring stocks actually move up as investors, you know, rotate into those boring safe companies. McDonald's had a good day on Friday while everything else fell and other boring stocks like Coca-Cola, Proctor and Gamble and others. So, keep a close eye on these ones. I think a lot of people overlook them.
But another stock that's close on the radar is LIT and it's to the downside. We talked about this one last week and it had a nice downside move on Friday. And while the company has been crushing it over the past year as as it has benefited greatly from the AI boom, I think it and other stocks like it that are up so much are especially at risk of selling off if we do see more profit taking uh continue in the market. It fell quite a bit on Friday and again it's up so much where I do see uh a risk of it selling off even more. It's close on the bearish radar and uh it could also be a play that plays out over the coming weeks and months. LIT has been consolidating very hard recently and I would not be surprised if it started to pull back, especially I'm watching that $800 support coming up. It would be pretty big to break below there.
But I guess it's time for today's momentum plays, Mike. So, let's get right into them. And with the first one, I have ticker symbol TXRH or Texas Roadhouse to the upside. If it breaks out above $171, look for the upside continuation move.
>> Had a great day on Friday. The next one we have Coinbase, ticker symbol COIN to the downside.
>> If Coinbase ends up breaking under 147.90, look for it down. Crypto got hit just like the overall market did.
>> And then with the last one, we have Poet Technologies, ticker symbol POET, to the downside. It had a very rough day on Friday.
>> It did. And this is another one of those growth names that has been flying to the upside recently. And it could end up pulling back pretty hard if it drops under $10.83, the low from after hours. Watch it to the downside.
All right, so we have these three stocks on the radar for potential continuations tomorrow. If and only if they break through the levels listed. These stocks are volatile, so always protect yourself, use stop losses, and focus on what matters, which is making smart, disciplined trading decisions. If you need help with that, check out all the information in the Stocked Up Discord group. But besides that, Tom, let's jump right into today's $837,000 big money trade. And today we are looking at ticker symbol AESI. The trader here bought the $17.50 strike call options that expire on January 15th of 2027. Uh Atlas Energy Solutions is an energy services provider that specializes in producing frack sand, managing tech-driven oil field logistics, and supplying distributed power systems. These call options are on the furthest dated options chain and are at the money, which is showing that the trader here is positioning themselves to profit from the stock increasing for the foreseeable future. With a trade like this one, I'm not all that surprised by it because with the war in Iran still going on, I can see how energy companies are continuing to be looked at in potentially bullish ways. Even though oil prices are not skyrocketing at recent highs, they still are significantly elevated year-to-date. And the longer the supply disruption lasts for, the bigger the consequences will be on the stock market and the global economy. And I could see why investors are continuing to look at energy companies potentially in a bullish way. Very interesting setup and excited to see how it does.
>> Yeah, over the past couple weeks, AESI has been pulling back and as we can see on the chart, ASI does pull back quite a bit and it has been on this overall uptrend, especially around the beginning of the year. So, whenever I'm looking at this pullback right now, it's pretty similar to the recent pullbacks. They could be looking for a good buy the dip opportunity here on AESI, but I am worried because it is pulling back in the short term. It is a little bit out of the money at the 17.5 strike. So, keep that in mind. But the main thing to know is that this play has a lot of time out to January 15th of 2027. You know, this isn't going to be a play that, you know, the the big money is probably looking to capitalize on this next week. They're probably looking to capitalize over the next coming months into the end of the year. So, as I look at AESI though, it can have some pretty wild swings. And of course, uh on this current dip, it could it could end up being a good buy the dip opportunity.
Yeah, we shall see. Either way, let's keep it close on watch. And if you're new to the channel, welcome and consider obliterating that subscribe button for every single trading day. We post brand new videos just like this one showcasing crazy big money trades, stocks keep on your radar, spy levels and analysis, important news, stats, upcoming events, and so much more. Takes a long time to make these videos, and if you subscribe, you'll get them recommended to you more often. But let's also give a giant shout out to today's member of the day, John in the Stocked Up Discord group, who had some beautiful profits on Friday. He said, "Lost four grand on AVGO and Crowdstrike calls. Made it all back today. Earnings ain't the way. A little bit uh under $5,000 in profits. Huge shout out to you, John John. Keep up the great work going forward. And if you guys are into short-term trading, check out that first link in the description and comments down below. Surgebot had a wild day on Friday with Tesla puts moving up by 641%, Nvidia puts by 405%, AVGO puts by 256%, KO calls by 187%, the list goes on and on. And of course, there were a handful of duds sprinkled in as well. You also get full access to the big money trades each day. You can search to see which big money trades are still open. You could search for the best performing big money trades. Join our weekly live events. Chat with Tom and myself all day long and access all of the very exciting new features we'll be adding. Coupon code auto trends will get you the lowest price possible for this. And we're wrapping up this sale pretty soon as well. So, check it out. Thank you guys so much for watching and let's crush it in the market this week.