Transcription
The stock market is in the midst of one of its fastest reversals in history, and this week is about to be one of the biggest yet. $7.6 trillion has been gained since March 30th on the back of strong earnings and booming tech stocks. Now, 36% of the S&P 500, and the majority of the MAG 7 are set to report earnings with semiconductor stocks at overbought levels we haven't seen since the dotcom bubble. The Fed will release its latest decision on interest rates and we'll hear from Fed Chair Powell for possibly the last time. All this comes as the US and Iran failed to come together again in Pakistan. Here's everything you need to know before your first trade Monday.
Tech stocks are driving this market higher right now. Institutional investors bought tech stock futures at a record pace, making their largest weekly purchases in at least 10 years, and semiconductor stocks are basically driving this whole entire rally. The S&P 500 closed Friday with a fresh all-time high thanks to Nvidia and AMD closing at all-time highs as well. But they were just following along with Intel, which just had its best day since 1987 and finally closed above its dot price after reporting strong earnings and signs of a turnaround.
So far, earnings in general have largely met or beat Wall Street's expectations, but this week will be a major test with over 30% of the S&P 500 reporting in one of the busiest earnings weeks so far this season. The highlights of the week include the Mag 7 players where five out of the seven will be reporting in a 48-hour period. Microsoft, Alphabet, Amazon, and Meta are reporting Wednesday with Apple reporting on Thursday. And there will also be a handful of key semiconductor reports as well. SanDisk, Western Digital, and Seagate have been at record highs as memory chips and storage are in high demand during the AI boom. So, keep your eyes on those tickers as well. And don't forget about the oil stocks either.
But yeah, it's going to be a very exciting week. And like you said, semiconductor stocks in particular have been driving almost all of the market's gains. The AI spending boom is only growing and chip stocks are capitalizing heavily off of it. But they're also the most overbought they've been since the dot bubble. The semiconductor index is 48% higher than its 200-day moving average, something it's only done three other times in history. And two of those times were right in the leadup to the dotcom crash, and the index fell lower in the future in all three of these cases. For those of you who are interested in trading this, look at SOXX. It is on an 18-day streak.
And semiconductor stocks being up this much is risky because the rest of the market isn't following along. Friday, we actually saw 324 of the S&P 500 companies close lower, making it the second worst negative breath record only after October 28th of 2025, when the S&P closed at a record with 80% of the S&P companies down in the red. And whenever we look at that period with the S&P 500 with the negative breath record, the SPY ended up pulling back 5.63%. And SPY itself made a brand new all-time high on Friday, touching $71,445.
Something that we saw play out last week is that the range was finally broken. There was a clear resistance around 712 to 712.50, and we finally saw the SPY push through that. If we see the SPY fall back into the range this week, that would be a negative sign because look at how choppy that range was. It was definitely a hard-to-trade range, and there is a support at the lower end of that range if we do fall in there around 702 to 750 to also watch for. But the key psychological level at 700 will also be on the radar. Of course, if we break out to new all-time highs, we'll probably be seeing some pretty good earnings reports from these tech stocks. But later in the week, like when we get to Wednesday and Thursday, that's where I expect a lot of the movement to finally happen.
Yeah, the market can't really start out the week any better than it ended on Friday. Like, it is breaking out. It's at fresh all-time highs, and we have a huge week ahead of us. Another thing worth keeping in mind, though, is of course, yes, there's still a lot of risk out there. But with April being so strong, it is historically a good sign heading into May. We can see that there have been 10 cases in history where the S&P 500 gained 5% or more in April. And when this happened, May ended up closing positive 90% of the time, and it posted strong average returns of 2.58%.
Yeah, that is a huge statistic to see there. And retail sentiment right now is also improving. 46% of individual investors expressed bullish sentiment over the next 6 months, which is up 15 points since March. And the bull-bear spread has turned positive for the first time since February. This marks the end of a 9-week streak of bearish sentiment readings, the longest since March and May of 2025. Retail investors are finally becoming bullish once again, and that's probably why we're seeing new all-time highs continuing to be made.
But regarding updates to the war, the US and Iran were supposed to meet in Pakistan to negotiate on Saturday, but Trump decided not to send his negotiating team, citing too much time has been wasted. They still don't know who's in charge, and that we have all of the cards, and that Iran could call us at any time.
Yeah. And it really seems that the war has been like on the back burner for the stock market, but that waiting game has a clock ticking. That's the oil market. If oil prices stay too high for too long, it's going to force the market to pay attention. We can see that oil flows through the Strait of Hormuz have basically completely collapsed, causing the largest energy shock on record. And even when the Strait reopens, it's going to take some time to get rid of all the sea mines that have been laid in the Strait and rebuild and repair the damaged energy infrastructure. So, it's going to take a while for energy supply to return to normal. We're going to talk about a few specific trades for this as the video goes on. But in the meantime, ticker symbol USO has surged 93% year-to-date, on track for one of its best yearly performances this century, followed by a 65% gain in 2021 and a 47% gain in 2007. And as we actually look at USO right now, it's been kind of stuck in this range. There is a big support around 108 to 110 to watch for on the chart. And of course, the all-time high sitting around 140 will be critical as well. Uh, it's been pretty choppy actually over the past few weeks, and seeing USO break this zone in one direction or the other will be critical. So, Iran updates and headlines will be huge to watch for coming up this week.
But that's not all to watch for this week. It's going to be a major week on the economic front, and Wednesday will be the most important day. We will get the latest decision on rates, as there will be an FOMC interest rate decision and press conference at 2 PM and 2:30 PM Eastern time, respectively. And this is possibly the last press conference for Jerome Powell. Kevin W is essentially guaranteed to be the next Fed chair. And now that the DOJ has dropped its investigation, the field is all but clear for Kevin Walsh's nomination. WASH is widely expected to be more inclined to cut rates, which is typically good for the stock market.
Yeah, Powell had hit a had a nice run, at least for the stock market, but we're entering a new era now. And yeah, it should be pretty exciting over these coming uh months. But uh like you said, Wednesday should be pretty exciting, too, because it will be an interest rate decision. And these events are always very important for the stock market. But also when we look on Thursday, we have key economic data with the GDP data set to release, and I would argue even more importantly, the PCE data um set to release 1 hour before the market opens, which is the Fed's preferred inflation gauge, which will be so important right now because oil prices are so high, and that will at some point cause inflation to go up. So, should be a pretty exciting week in this sense as well.
And it's also going to be a very exciting week in terms of some price action that we have lined up as well. Ticker symbol XLE is still on my radar. We've been uh talking about this one quite a bit lately. It follows the oil industry, and with oil prices elevated and with the, you could say, cancelled negotiations this weekend between the US and Iran, I don't think this war is changing for the better. And I think oil companies have a lot to gain from this. Um, when we look at XLE, it has had a great year so far. And for the first time in history, there are over 60 large crude oil tankers bound for the US. Uh, and I think US oil companies especially have a lot to gain from from this. XLE is on my bullish radar. That doesn't mean it has to go up tomorrow, but I think over these next couple of weeks and months, they have a lot to gain.
Yeah, XLE actually just broke a massive downtrend recently, and I'll be watching it as well, Mike. I know that we've been mentioning it quite a bit. Uh, with my first play, I'm looking at DraftKings to the upside. Uh, looking at DraftKings on Friday, they actually popped up 4.5%, and they're holding this critical support zone around $20 to $21.50. Multiple bounces have happened around this range recently. And what I'm watching for with DraftKings is for them to get back to the top end of this range closer to 24 to 24.50. I could see this testing pretty early this week, especially off of Friday's bounce. And there's going to be a clear high of day to watch for very close to 23.45. So, if we see that break around 23.45, watch for DraftKings to get up there. Earnings is coming though on May 7th. So, it's definitely more of a shorter-term swing trade possibility. I'm not really looking for a multi-week hold through earnings or anything like that.
Sounds good. Another stock that's close on the radar is TN, and it is to the upside. This is an ETF that follows the solar industry, which has also been gaining quite a bit over the past year. Uh, as we are in a massive energy supply crunch, uh, basically energy-producing companies have a lot to gain in this environment. The whole world needs energy, especially with the AI industry and data centers growing so much. Uh, TN is also a stock on the radar, and it is getting closer to a breakout right around like $61 to $62 per share.
Yeah, this is a huge stock to watch for here in the short term. I love the price action off of the trend, and it's holding that lower support zone very well here. With my next play, I'm looking at Palunteer for a downside continuation play. Palunteer has been pretty weak in the short term, and there is a major support zone on the radar close to 125 that I'll be looking for a test over the next couple of weeks. Now, of course, if the market does continue higher, it's going to be hard for Palunteer to move down, but their correlation to the market is actually only moderate, coming in at 0.61. And they've shown some weakness recently. Friday's recovery was also pretty weak, and they're failing to break past key resistance at 133.50 to 134, or sorry, 143.50 to 144. If they break through that range, then I won't be watching Palunteer to the downside anymore. I'll actually be looking at it for a possible short-term recovery back up. But if we go to the book map, there is just a massive wall of buyers down around 138 to 140. So, if it does break that 138 to 140 zone, watch for a continuation as the buy wall starts to disappear.
Sounds good. Yeah, let's keep a close eye on these levels. Palunteer has been pretty hot, and clearly there's a lot of activity stacked up here. But let's also jump into today's momentum plays. With the first one, we have Poet Technologies, ticker symbol PO, to the upside. The stock has been crazy lately.
It has, cuz it has been one of the craziest runners that I've seen in a while. If Poet can break out above 16.50, its high from after-hours Friday, then watch it to the upside. With the next one, we have BYU, ticker symbol BU, also to the upside.
Yeah, BU had a very strong move Friday, closing up 5.9%. This is a Chinese stock, but if it breaks above 129, watch for a continuation higher.
And then with the last one, we have D-Wave Quantum, ticker symbol QBTS, but to the downside. Yeah, you know, there's been a lot of tech stocks and chip stocks ripping. It seems like the quantum stocks though are pulling back a bit. If D-Wave pulls back under 17.90, continue watching it down.
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. As always, these stocks are volatile, so make sure to protect yourself. Always use stop-losses. Always know why you get into any trade you ever enter, and focus on what matters, which is making smart, disciplined trading decisions. If you need help with that, check out the information in the Stocked Up Discord server. There's a lot of great free info in there.
But let's also jump into today's $800,000 big money trade. Today, we are looking at ticker symbol CHDN. The trader here put $800,000 into the 105 strike call options that expire on June 18th of 2026. This company is Churchill Downs. They operate the Kentucky Derby and a handful of other uh things like their Twinspires online wagering platform, numerous casinos throughout the US, and other assets. Uh, the company reported great earnings last week. The stock is running strongly off that. But also on April 21st, they announced that they are acquiring the intellectual property rights to PNIS stakes and the Black-Eyed Susan Stakes for $85 million. Essentially, this will position them to own the IP for two of the three Triple Crown races, growing their business and brand. Uh, with the Kentucky Derby scheduled for May 2nd, which is pretty soon now, it wouldn't be surprising for this stock to have more attention towards it than usual, which can potentially benefit it, especially with this recent momentum. These calls are slightly out of the money and have around 50, you could say a little bit over 50 days of time to them. So, the trader here is uh positioned themselves to profit off of a decent-sized up move in the relative short term.
And looking at CHDN, it's in a clear range and channel right now. You know, the lower end of this range is down around the $85 support, and the clear resistance is right around $118.50. And when I say it's clear, I mean it's touched this pretty much three times, almost to the cent. But as I look at CHDN, I would not be surprised if it ended up running up to the top end of this channel. That would be around that 118.50 range, which would be well in the money at that point on these 105 strike calls. So, I like this play quite a bit, Mike. And there's a lot going on with this business. You know, of course, the Kentucky Kentucky Kentucky Derby coming up soon could drive some buyers in as well, and just hype in general. So, I'll be watching this one very closely. It's one of my favorite big money trades that I've seen in a little while.
There we go. Yeah, let's keep it close on the radar. Definitely should be interesting. And if you guys are into short-term trading, like Tom showcased with Palunteer, definitely make sure to check out Bookmap. It shows you exactly where all key buy and sell orders are stacked up, which can be very useful for finding support and resistance and points to look to exit positions. There's so much you can do on Bookmap. So, definitely check it out, and you can save quite a bit with the first link in the description and comments down below. If you use that link, a special offers segment appears with some pretty good deals. So, definitely check it out. We showcase it all the time.
And we also want to give a giant shout out to today's member of the day, Spacium, in the Stocked Up Discord, who had some beautiful profits on Friday with Nvidia. Huge shout out to you. Keep up the great work going forward, and it's awesome to see posts like this one. Thank you guys so much for watching. We are set for quite the exciting week, and let's crush it in the market tomorrow.