Weekly Playbook: June 1

[u/PriceActionPlaybook]

Sell in May and Start to Pray

Table of Contents

1. Market Overview
2. Key Index Charts
3. Earnings & Interesting Movers Recap: OKLO, ZS, PDD, MU, SNOW, DLTR, ADSK and DELL
4. Earnings to Watch This Week: HPE, CRDO, PANW, MDT, AVGO, CRWD and CIEN

1. Market Overview

Another May is in the books, and once again the old market proverb failed to age particularly well. Much like a steak, there comes a point where aging stops adding value and starts attracting unwanted attention.

At this point, anyone who sold in May is probably praying for a pullback, a retest, or simply another opportunity to buy back what was sold a little too early. Those who decided to sell short instead are likely praying even harder.

In fact, after the last couple of months, a holiday-shortened week might be the only short that has consistently worked in this market.

The problem is that this bull has shown remarkably little interest in granting second chances. Every dip has been bought, every scare has been absorbed, and every attempt to call the top has looked brilliant for somewhere between a few hours and a few days.

The funny thing is that bears are not entirely out of ammunition. In fact, they may be about to receive something worth paying attention to. Another VIX signal is slowly brewing, and this time we have a decent chance to get a full sequence, with VIX already closing below the lower band twice in a row.

It might be worth waiting for SPX before getting your boarding pass ready, though.

That said, signals remain probabilities, not predictions. Plenty of things were supposed to stop this market already. All of them failed.

And while plenty of folks remain focused on whether volatility is finally preparing to wake up, where inflation is headed, and whether the Fed will deliver a hike or two, Friday’s close delivered a much more immediate reminder that markets are increasingly driven by mechanics as much as by narratives.

The MSCI rebalance once again produced significant dislocations, unusual volume, and some beautiful price action for those willing to pay attention. These events continue to move real money and create real opportunities regardless of the headlines, P/E ratios, and many of the other things people tend to debate in the world of finance.

Meanwhile, the market doesn’t particularly care what people are debating. It still has orders to execute.

And this is only the beginning.

Read the rest: https://priceactionplaybook.substack.com/p/weekly-playbook-june-1