Following a brief early-week consolidation, the S&P 500 showed signs of renewed momentum on Thursday. Price spent the first part of the week trading tightly around the 10-day moving average before breaking higher. Friday saw the index hold above this level, though the close was slightly less convincing compared to Thursday’s strength.
The Nasdaq (QQQ) continues to lead. Price action mirrored the S&P 500 early in the week, with a shallow pullback toward the 10-day moving average followed by strong upside on Thursday. Unlike the S&P 500, QQQ managed to carry that momentum into Friday, closing the week with relative strength.
The Russell 2000 (IWM) experienced a slightly deeper pullback, briefly undercutting the 10-day moving average before quickly reclaiming it. Momentum returned on Thursday, and while Friday lacked strong follow-through, the index still printed a constructive candle with a solid close and a lower wick — suggesting support at current levels.
Themes in Play
SMH (Semiconductors) – A brief early-week pullback created several constructive setups before momentum resumed. Price is now testing all-time highs, with focus on whether it can sustain a breakout.
QTUM (Quantum Computing) – Delivered a clean pullback to the 10-day moving average with tight consolidation, followed by strong upside into the end of the week. Structure remains constructive, with potential for continuation.
IBLC (Blockchain) – Saw a slightly deeper pullback relative to other themes and remains within a broader consolidation. Would prefer to see additional tightening before a clean breakout attempt.
LIT (Lithium) – Very shallow pullback, barely testing the 10-day moving average before continuing higher. Indicates strong underlying demand.
REMX (Rare Earths) – Clean pullback to the 10-day moving average with tightening price action, followed by a solid expansion. Looking for continued momentum if strength persists.
Key Observations
Last week, momentum appeared concentrated primarily in AI and large-cap technology. This week, we saw clearer signs of breadth expansion, with multiple sectors beginning to participate more meaningfully in the rally. While AI infrastructure remains the leading theme, broader participation adds conviction to the overall move.
Additionally, the recent pullback across indices and sectors was notably shallow, with most finding support around the 10-day moving average. This type of price action typically suggests strong institutional demand, with buyers stepping in early rather than waiting for deeper retracements.
Focus for the Week
Given the strength of the recent move and improving breadth, the path of least resistance appears to remain higher in the near term.
This week, my focus will be on tracking continued momentum and identifying opportunities within leading areas:
- Semiconductors / AI infrastructure
- Blockchain