We just saw both the Nasdaq and S&P 500 close at their highest weekly level in history. From a purely technical standpoint, this would imply that another leg higher in stocks is in the works. But all year, we’ve heard stories about bad market breadth, negative market sentiment, tariff tantrums, a clueless Fed, and more. Yet our reliance on sector leadership telling the real story about what’s happening in stocks has kept us in the loop. And this week, I’m very excited to share this latest and greatest bullish development…  The Rising Tide Lifts All Boats Another week has passed and we have a couple key updates on the sector leaderboard. Technology has emerged as the one-week leader, which sends a strong signal that stocks have entered breakout mode. We’ve also seen communications emerge as the leader again on the 30-day and year-to-date basis, which is hardly a bearish signal.

Stocks are looking to cap off another impressive week, and register their highest weekly closes in history. Of course, we’ll see how we shape up into the closing bell, but the recent price action really is a testament to the idea that sentiment follows price, not the other way around. Here we have stocks within a spitting distance of all-time highs, yet various sentiment surveys are filled with loud and convinced bears. I’m not going to lie to you, this is music to my ears. New all-time highs are imminent, and most are completely unprepared.  But we’ve been singing a bullish tune for a while now – here’s why…  Perception Matters More than Reality One of the most important skills to cultivate as a trader is to hold two conflicting, and even contradictory ideas in your mind at the same time. I am a big believer in not getting bogged

A few weeks ago, I shared my thoughts on how Trump’s presidency could turn out to be bullish for the Chinese equity market.  I’m still very much in this camp, but now I want to take it a step further, especially after recent headlines of individuals like David Tepper boosting his allocation to China. I can’t say whether Tepper sees what I see, but I do know that there is a very specific theme brewing in that country, and it’s what I want to share with you today.  Check this out… Follow the Money Flows In my time here at TheoTrade, many have heard me say that I want to own the strongest stocks in the strongest sectors in the strongest countries. Well it just so happens that for a majority of this time, the strongest country has been the United States, which has kept our focus at a domestic

Over the past few weeks, we’ve seen the market’s trading range become increasingly narrow. But there is some context to this, because we’ve seen tremendous intraday volatility, or wide trading ranges on the daily timeframe. This is why I love to say, “When in doubt, zoom out.” Because even though there’s a healthy level of fear in the market, its internals continue to shape up nicely.  Here’s what I mean…  The Real Story on Rates One of my favorite aspects of being a trader focused on money flows and price action above all else is that it gives me something tangible to compare against the gossip of the day. This is especially the case when the phrase, “A bull market climbs a wall of worry,” is considered. Every time there’s a bout of market volatility, we start to hear about an imminent financial meltdown, or even more – a housing

Stocks have slowly but steadily crept higher since the start of the new year, and by most metrics I track, it looks like this trend is set to continue into the near-term future. But already this year, I’ve heard stories of traders blowing up their accounts due to the market’s volatility. But when you zoom out and realize that the Dow only corrected around 7% from its last all-time high, it’s painfully obvious that these traders were taking way too much risk. But today, I want to talk about the nature of this volatility that we’ve seen, because it’s different from what we’ve seen in recent memory.  Here’s what I mean…  When in Doubt, Zoom Out We’re in a trading environment where headline risk is the highest it’s been in years. The thing to understand with this volatility is that it’s mainly on an intraday level. In other words, we’ve

Some moments in time pack more activity into a single week than in years past—and I believe we are living in one of those moments. Markets act as a discounting mechanism; in other words, they continuously bring future expectations into today’s pricing. Today’s headline risks are as elevated as they have been in recent memory. That’s why it’s more important than ever to filter out the noise and focus on what really matters: the price action. The sectors reveal the full story. Take a look… When Winners Lead, The Rest Follow Last week was certainly memorable, and it looks like this week is off to a similar start. Two consecutive gaps lower during Sunday futures trading isn’t something you see every day. We’re often advised not to judge a book by its cover. While that may not be the best advice ever, it does apply to the markets. Think of

There are periods in history where more happens in the span of several months than several years. We lived through such a period back during covid, and now it seems like we’re entering another one of those times. And it’s during times like these where markets provide tremendous opportunities to level up one’s station. This is why I, along with the rest of the TheoTrade team, decided it was a good idea to dedicate one full hour per week to analyzing what’s happening in the crypto market. Let me share what I have in mind… A Sector Growing Its Roots The thing to understand when it comes to cryptocurrency is that regulatory clarity is what’s going to bring the technology to the masses. Bitcoin has solidified its position as the “Dow” or legacy coin of the sector, but that doesn’t mean there aren’t other great opportunities elsewhere. That’s why, starting

It’s been a whirlwind week for markets, especially on the tech front. Stocks opened Monday reeling from the DeepSeek news out of China. Even an announcement from Alibaba about a major AI development failed to attract significant media attention. Artificial intelligence has been a dominant theme in the U.S. over the past year, driving much of the strong performance in stocks. The level of capital expenditure (CapEx) in the AI space has been immense. However, as I’ll explain, it seems we’ve reached a critical inflection point. Interestingly, the Chinese stock market (currently on holiday) was already on our radar. In the bigger picture, China’s recent AI advancements are poised to have a significant impact on the U.S. tech sector. Here’s why this could actually be a positive development… New Bull Trends Emerging One important thing to remember about the technology sector is its breadth. It encompasses a wide range of

Hello TheoTrader, As we enter the second full week of trading in 2025, the timeline may have shifted slightly, but the underlying story remains the same: we’re in a bull market. Sector performance rankings saw a notable shake-up last week. While much of the movement is bullish, there’s one minor concern—but only in the traditional sense (you’ll see why shortly). The weekend was dominated by DeepSeek headlines, and this week promises to be action-packed. Between the Fed, key economic data, earnings reports, and headline risks like geopolitics and tariffs, there’s plenty to watch. The big question: will these factors push stocks meaningfully lower, or will the market’s internal capital flows continue to prevail? Let’s dive in… Moving With the Market’s Rhythm There’s some tension in the markets this morning, so let’s focus on where the bad news is coming from at the sector level. Utilities (XLU) have been the top-performing

We’re wrapping up an incredible week in the stock market! The S&P 500 cash index—and its ETF counterpart, SPY—hit fresh all-time highs, with futures indices not far behind. If you’ve been following the Sector Leader Bullseye newsletter closely these past few weeks, this probably doesn’t come as a surprise. But let’s be honest—accurately predicting market moves is just a stepping stone. What really matters in this business isn’t saying, “I told you so,” but growing your account. And trust me, there are plenty of people who care more about being “right” than being profitable. Fortunately, that’s not my style, and I’m guessing it’s not yours either. So let’s skip the patting ourselves on the back and focus on what’s next for the markets… The Good Times Don’t Last Forever—But They Can Last a While It’s easy to forget just how dramatic 2022 was for the markets. That bear market wasn’t