This rally is still alive, but it depends on how Wall Street reacts to the 3 big catalysts this week.
Before I break it down, if you’ve ever wondered how traders read the news, my mentor Tim Sykes wants to show you later this week. Specifically, session #6 on May 2nd is about Catalyst Trading. It’s free, but you have to register ahead of time.
Register for the Millionaire Formula Conference Now
Back to the 3 big catalysts this week.
Setting the narrative is Mag 7 earnings, with five of the seven reporting. Next, the Fed meeting starts today. And macro prints throughout the week create the backdrop. The Big Picture
Last week there was a stronger risk appetite with the S&P 500 and NASDAQ notching all-time highs. Coming into the week, the market was being framed around earnings and policy rather than fear. This is no longer a pure war tape.
Instead, this powerful rally can prove itself. Big tech and AI lead the market as the focus shifts to earnings quality and Fed messaging.
The Mag 7 Super Wednesday
On Wednesday, four of the Mag 7 will report earnings after the bell. That includes Alphabet (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Meta (NASDAQ: META). On Thursday, Apple (NASDAQ: AAPL) will report. Where they go, the market follows.
The FOMC Meeting
The Fed meeting starts today. Powell will give what are likely his last remarks as Chairman tomorrow afternoon.
As much as I wish they’d cut rates, the best-case scenario is they stand pat. Odds are, they’ll wait until the new guy comes in to do anything. So, I assume it will be a non-event where rates stay unchanged and won’t spook the market.
The Macro Backdrop
This is a big week for economic data. Important prints include:
- The Conference Board publishes its April survey of consumer confidence today.
- Q1 GDP and the Chicago business barometer release on Thursday.
- On the heels of the Fed, the Bank of England and EU Central Bank will announce their rate decisions on Thursday.
My Take
One risk to this rally is that it’s driven by just a few big names. If we have strong tech earnings, assuming the Fed stands pat, this rally should keep going.
One reason is that people have gotten over the whole “AI tech bubble” idea. Like I’ve been saying, this is the greatest technology in the history of mankind.
What’s crazy is that AI is just getting started. It’s the first inning and people were already calling it a bubble. Now, the SaaS companies are a different story. But the pure AI plays? They’re at all-time highs.Watchlist
Atomera Incorporated (NASDAQ: ATOM) is a stock I’ve talked about for years. It’s a semiconductor materials and technology licensing company.
ATOM is relevant to anyone trading semiconductor stocks. Yesterday, I shared why chip stocks are in play. Last week (April 23) Atomera announced expanded collaboration with Synopsys, Inc. (NASDAQ: SNPS) which is a major player in semiconductors.
The collaboration gives ATOM a live angle in the broader market theme around AI infrastructure.
ATOM closed up 39% on Friday and gapped up into premarket on Monday before pulling back on lower volume.
Source StocksToTrade ATOM 1-year, daily candle, semiconductor momentum play
If reaction to earnings this week is not bullish, then the idea on ATOM is busted. But it fits right into the narrative:
- Lower priced
- Speculative name
- A history of big moves
Best case, ATOM shows relative strength versus its big name peers. Wait to see what happens with the earnings plays.
On My Radar
- Anthropic’s CEO says the company needs more compute. He also defends discipline over YOLOing. Kinda like trading penny stocks.
- Yesterday I meant to share the link to my new free course, Day Trading for Beginners. Instead, I linked my older Day Trading 101 course. My bad.
- Wall Street expects Bill Ackman’s Pershing Square Inc. (NYSE: PS) and Pershing Square USA (NYSE: PSUS) to IPO as soon as today.
- My Rubicon Codex algo has proven to be an absolute banger. Discover more here.