Defying Gravity
RLT Newsletter
The SPY and QQQ continue to defy gravity and blast higher, propelled by the AI trade. This is one of the most bifurcated markets I have ever seen, with few stocks participating in the massive moves. The ones that are, really are.
MU, one of the main leaders of this jaw-dropping run higher, has added roughly $500 billion to its market cap in just over a month and simply will not quit. This has pushed semiconductors into one of the most stretched moves we have ever seen.
SOXX has been showing bearish divergence for 33 days and is right inside the time zone where we generally see tops form after explosive RSI highs. June 11th is the last date where it has historically topped within this type of setup, but it has already blown away the percentage moves of the historical data, so it is quite possible that the timeframe stretches further this time around.
AVGO reports earnings in one week. That report could ignite the semiconductor trade and send the sector even higher, or break it down, depending on what way it goes.
QQQ Daily Chart
The SpaceX IPO
Everyone is watching the SpaceX IPO coming in early to mid June, and people have been calling for that to mark the top of the market ever since the rumors surfaced. If we keep stretching and pushing into that date, it actually could happen.
Generally, when everyone is watching for one thing, it does not play out that cleanly. That said, I do think the space-related names likely top around then, if they even make it that long without beginning a correction. I reviewed my favorite space names in detail in yesterdays video.
Euphoric “must own” stories often show up late in bull markets. We saw it during the Dot-com bubble. We saw it when Coinbase IPO’d almost exactly at the peak of the 2021 crypto bull market. We saw it when Rivian IPO’d near the peak of EV speculation.
The SpaceX IPO could represent peak retail exuberance and a massive liquidity concentration into one story, all while yields are rising, liquidity is tightening, and much of the broader market is not participating. A final blow-off move into a major liquidity event like a multi-trillion dollar IPO could potentially be where the music stops.
This is all still quite speculative. But with a market this extended, it is worth paying attention to.
The Bigger Picture
With the SPY as extended as it is, a decent pullback or sideways consolidation through the summer months would be healthy. However, we have seen throughout 2024 and 2025 that this market does not require meaningful corrections to sustain upward momentum, which is why I remain hesitant to assume a larger dip is guaranteed.
My plan stays the same. Until key supports break on SPY and QQQ, I remain bullish and will continue looking for slight dips to buy into stronger names.
Key Stocks
AMZN recently gave us a perfect example of buying a dip in a strong momentum stock. It pulled back for 14 trading days and bounced directly off key support. When a stock moves vertically for as long as AMZN did, rallying roughly 40% in just 26 trading days, you expect some kind of pullback into the short-term EMAs. That is another thing that makes the push in QQQ so remarkable. Anyway, AMZN dropped back into the 20-EMA and immediately bounced after closing below it for only one day. I discussed the setup in Tuesday’s Swing Trade Video and got long in the RLT Swing Trade Community.
AMZN Daily Chart w/2020 Analog
COHR is a similar setup. It dropped back into the 20-EMA after making a 40% run in just 12 trading days, and is now consolidating above the 10-EMA. If it breaks above $390, that creates another potential trade opportunity for a 10-EMA bullish trade into new all-time highs.
The key to trading this market has been finding momentum and trading with it. Finding names that are cleanly pulling back into the 10 and 20-EMA, then watching for signals like high-wave candles, hammer candles, or morning star reversals.
NVDA has fallen 11% since peaking. While it likely sees a short-term bounce soon, it has the structure of a stock that may be looking for a larger correction. After four consecutive down days sitting on support dating back to November 2025, a bounce is expected, even if it ultimately forms a lower high. A bullish gap-and-go on Thursday would likely be tradable, similar to the May 6th gap we discussed in real time.
AAPL has held the 10-EMA since earnings and is on an absolute tear. It has now hit all of my targets and looks like it wants to tag $316 before any meaningful correction. Once it does begin correcting, the $290 area is a solid level to watch for support.
TSLA has continued pushing higher, and the trade I outlined in my May 18th newsletter has worked out extremely well. It hit target one today when it filled the overhead gap. The next major target now sits around $474, the next overhead gap. Ideally, I would love to see it push into that area ahead of the potential SpaceX IPO.
META was finally a big mover within the Trillion Dollar Titans today. It had a very strong session and broke out of an 18-candle consolidation, closing above the high-volume earnings candle for the first time. It barely pushed above the 100-week SMA and stopped right at the 100-day SMA. Today’s candle is now the key area it needs to hold, while the overhead gap remains the main upside target. A small retest would be ideal, but if META starts gapping higher and gaining momentum, it could move straight toward that gap. META has a tendency to move aggressively once it finally decides to trend.
META Daily Chart
Bitcoin
Bitcoin recently rejected at the 200-day SMA after a choppy, overlapping, messy push higher that greatly resembles a bear flag. It has now given us a five-wave structure off the high that appears to be the beginning of a larger C wave that could take it down to a new low.
That would align well with prior cycles in terms of both timing and drawdown depth, and since nearly everything else in this cycle has tracked historical patterns closely, there is little reason to assume the pattern suddenly breaks now.
Worth noting: MicroStrategy is now buying Treasuries instead of Bitcoin, which suggests that even Michael Saylor believes better buying opportunities may come later.
If the low is already in, which I do not currently assume, things likely remain choppy and overlapping for a while longer. The type of sustained bullish momentum that typically defines Bitcoin bull markets is probably at least a few months away.
BTCUSD Daily Chart
