Moment of Truth Arrives for the Bulls. S&P 500 Above 6100. NYAD Makes New High. Ten Year Note Near 4.3%.

Stay Alert. Trade what you see. Trust the charts not the noise.

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The stock market rally is gathering steam as the Nasdaq 100 (NDX) made a new high yesterday which was confirmed by the New York Stock Exchange Advance Decline line (NYAD). Let’s see what happens next. In this issue, I’m updating my two most recent picks which are offering sound entry points as well as updating Sell stops on other shares, especially our high flying tech stock of the moment AMD, on which we recently took partial profits.

The Moment of Truth is Here – Don’t Fight the Tape. But Keep Your Eyes Open.

The market is betting on a rate cut by the Fed in July but a lot can happen between now and then, especially if this Friday’s PCE number comes in hotter than expected.

So far, however, as I noted this weekend, the market seems to be discounting Powell’s hawkishness and starting to price in a rise in liquidity via rate cuts since at least three Fed honchos, Waller, Bowman, and Goolsby have offered more tempered comments on inflation than Powell. That leaves the rest of the Fed voters in a vacuum.

The only way to manage this market is to trade day by day and to pick stocks which are under accumulation before the crowd jumps in. I’ve recently added several of them to both the Weekender and the Smart Money Portfolios. You can gain full access by hitting the subscribe button below.

Otherwise we stick with the plan:

• Don’t fight the liquidity trend, which is positive – the Fed and the U.S. Treasury are sneaking money into the system and the market is expecting more

• Stick with strength – some tech stocks are moving decidedly higher. I’m adding a new one today.

• Let the market stop you out of positions – so far, our portfolio has remained resilient

• If a position does not get stopped out, it’s a sign of strength and it should remain in the portfolio – we have 11 such positions in the portfolio right now

• Hedge when necessary – we have an insurance trade setup in place.

Market Update – NYAD Makes Emphatic New High

The New York Stock Exchange Advance Decline line (NYAD) made an emphatic new high yesterday and has reversed course this morning. This is not an issue yet. Now that NYAD has delivered a new closing high, let’s see if it can build upon it, although it would be normal to expect some backing and filling in the short term. Keep an eye on the support lines, and the 20 and 50-day moving averages. If NYAD holds above this support cluster, and builds strength which delivers more new highs, the bulls will be in business for a while, especially if the dip buyers continue to appear when stocks pull back.

The Nasdaq 100 (NDX) is holding above 22,000 after its new high. A pullback to the 20-day moving average wouldn’t be unexpected. What’s important is that it holds.

The S&P 500 (SPX) is back above 6000 but is struggling to rise above 6100. We’ll see what happens here. Key support remains at the 5850-5950 and important resistance at the 6100 area. A breach of the upper or lower end of this range will likely be very meaningful.

The U.S. Ten Year Note yield (TNX) dipped below 4.3% yesterday, but is back inside the 4.3 and 4.6% trading range this morning with the key barrier to lower yields being its 200 day moving average.

Thank you all for your support. If you have a 401(k) plan that offers ETFs as investing vehicles, consider Joe Duarte’s Sector Selector. It’s FREE with your monthly membership to Buy Me a Coffee. Sign up here. If you’ve been thinking about tuning up your investment playbook, my new book “The Everything Guide to Investing in Your 20s & 30s” will get you started on the right foot – pre-order now. For those wishing to get started on day trading, consider “Day Trading 101.” For steady gainers, check out the Smart Money Weekender Portfolio. I’ve just added several new positions in this weekend’s edition. Trade better with extra energy, and vitality. Visit my Health Products Page.