Lockout Rally
My game plan, a new buy, and why this rally is just getting started.
Marlin Capital Readers,
This has all the makings of a lockout rally.
Let me explain. 👇
Yesterday, we gapped down on bad Iran news to start the week. Peace talks collapsed over the weekend and oil was surging. Scary headlines were everywhere.
The dip lasted about 5 minutes. The S&P 500 reversed, ripped higher, and closed +1%.
Today, the market staged another big rally. The SPX surged +1.2%, and is now sitting just ~0.5% from all-time highs.
The Nasdaq ripped +2% and has now finished positive 10 days in a row, its longest winning streak since 2021.
Historically, such winning streaks are a bullish indicator for the market (on all time frames, 1D-6M).
The market has now officially erased every single point of losses from the Iran war.
As I wrote in “Headline Fatigue”, the market began to move on from the Iran headlines ~2 weeks ago. We first saw it following Trump’s April 1st re-escalation speech, when the SPX gapped down -1% at the open and closed green. We saw it again last Tuesday, when Trump threatened that “an entire civilization will die tonight” and the SPX closed green again. And now, despite the Islamabad talks collapsing and the Hormuz blockade, the market has shrugged it off and rallied to within ~0.5% of ATHs.
The market has spoken.
And for the S&P 500, the breakout hasn’t even started yet. The SPX is sitting right at the doorstep of ATHs, and setting up for a 6+ month base breakout (following a false breakdown). This is a powerful technical setup. We are on the verge of a significant breakout here.
Here is my game plan for the rest of the week, including a new buy today in the Active Trading Portfolio, my top watchlist names, and where I think the SPX is headed from here. 👇