Situation Awareness: Bullish. The market is driven by a “peace dividend” narrative as U.S.-Iran negotiations show progress, combined with a historic eighth straight weekly gain for the S&P 500. Trade mode: Selective and aggressive on strength. The tape is poised for a higher open ahead of the Memorial Day weekend, with futures pointing to gains despite elevated oil prices and Treasury yields hovering near critical resistance. Regime context — 57.79% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 294 bulls vs. 84 bears. The 5-day trend shows a consistent up sequence, confirming strong upward momentum as breadth expands beyond mega-cap tech.
SIP: ROST EL WDAY ZM
- What’s working: Continuation signals are rich with 8 high-quality setups, indicating a broadening participation environment where momentum stocks are finding support.
- Leading sectors: Retail (driven by ROST‘s 17% comp surge), Defense/Aerospace (geopolitical positioning), and Software (WDAY, ZM beats); leading themes: Off-Price Retail, AI Infrastructure, and Defense Spending.
- Key event: Kevin Warsh sworn in as Fed Chairman at 11:00 ET, marking a pivotal moment for policy expectations amidst inflation concerns.
- Market read: Yesterday’s close extended the winning streak to eight weeks, with the Russell 2000 outperforming (+2.5% weekly), signaling a healthy rotation into rate-sensitive small caps.
- DEP watchlist: KALU, MCHP, DT
- SIPS: KALU, MCHP, BRK.B