Hey there, Gianni here.
The market touched 6,000 Friday. Financial media cheered. Analysts called it validation of the "soft landing" narrative.
They're all looking at the wrong thing.
While everyone fixated on jobs numbers and Tesla's dramatic bounce, a much bigger story unfolded in plain sight. The kind of rotation that marks the beginning of major bull markets – not the relief rallies most think they're seeing.
I've been tracking what I call "The Great Tech Reset" since May 22nd. Today's action just confirmed what the smart money already knows: we're not in a relief rally. We're in the early stages of something much bigger.
The Signal Everyone Missed Friday
Here's what really happened while markets celebrated that jobs report:
8 out of 11 S&P sectors moved into positive territory. That's not relief – that's broad-based strength.
But here's the kicker: technology jumped from the laggards to 3% year-to-date gains. Meanwhile, utilities – the ultimate defensive play – dropped from 2nd place to 4th.
This isn't random. This is textbook early-cycle rotation. And semiconductors? They're up 6.3% just this week – absolutely crushing the broader market.
When semiconductors lead tech, and tech leads the market, you're not looking at a bounce. You're looking at a reset.
Why the "Recession Crowd" Has It Backwards
Even Elon Musk came out yesterday, predicting a recession later this year. The bears are still calling for major corrections.
Here's what they're missing: the correction already happened.
Look at the evidence:
- Tesla whipsawed traders (including me) with its 14% plunge followed by 5% recovery
- Quality names got hammered on headlines, not fundamentals
- Weak hands got shaken out across multiple sectors
These aren't signs of impending doom. They're signs of a market clearing out the weak players before the next leg higher.
Don't let headlines get you twisted. Price action tells the real story.
The $142 Stock Everyone's Calling "Expensive"
While everyone debated Tesla drama, I watched Nvidia quietly set up for what could be its next major breakout.
The stock trades around $142. Analysts worry about "stretched valuations."
I see it differently.
Nvidia isn't expensive at $142 – it's tremendously undervalued when you consider what's coming. And here's the beautiful part: it's not far from hitting its highest weekly close in history.
Which is why I believe we can see this eventually hit $230.
When this stock closes at a new high, it's going to power this entire market higher. The Mag Seven is woefully under-owned right now. Foreign money that fled during the selloff is trying to get back in.This creates massive buying pressure few are anticipating.The Currency Signal That Changes Everything
Here's something most traders completely ignore: everything in the market is downstream from currencies.
While everyone focuses on stock charts, I start with the dollar. Why? Because there's a huge difference between a country's stocks rallying with an appreciating currency versus a depreciating one.
When both rally together, it signals real foreign demand – not just inflation.
Right now, US stocks are outperforming international markets while the dollar holds strength. That's not a coincidence. That's genuine capital flows into American assets.
My S&P Target That Nobody's Talking About
Friday's action created what looks like a cup-and-handle pattern on the hourly S&P chart. If I'm right, we're looking at another 250-point rally from current levels.
That puts the S&P around 6,300.
New all-time highs. While everyone celebrated touching 6,000 as some major milestone, the real move hasn't even started yet.
The Phillips Curve Nobody Remembers
Want to know why I keep talking about rate cuts? It's not wishful thinking. It's economics.
The Phillips Curve shows the inverse relationship between unemployment and inflation. Central bankers take this seriously. As unemployment ticks higher (which it is), inflation pressures ease.
That gives the Fed room to cut rates – rocket fuel for risk assets.
How to Position for What's Coming
Don't chase headlines. Don't get emotional about individual stock drama. Focus on the rotation.
Watch semiconductors. When they lead, tech follows. When tech leads, the market follows.
The Great Tech Reset isn't some theory – it's happening right now.
While others worry about "soft landings" and debate recession timing, smart money is positioning for the early stages of what could be a major bull market.
The correction most people fear? It already happened. The opportunity most people are missing? It's unfolding right in front of us.
Don't let it get you twisted. The price action says we go higher from here.
The only question is whether you'll be positioned when it happens.
You can find me in the TheoTrade Chatroom all of next week.
And if you’d like to get access to all my plays, click here to get started.
- Gianni Di Poce
