Bottom Line
Top of BookThe week ended with price action you can build a thesis on. Last Friday’s breakout in the S&P 500 Equal Weight (SPXEW) carried straight through this week, and SPXEW, SPX, DJI and the Nasdaq Composite are all notching fresh all-time highs at the same time. That is the breadth confirmation bulls have been waiting for. Software joined in too — IGV broke out above its 200-day SMA for the first time this year. When the cap-weight, the equal-weight, the Dow, the Comp, and software are all making new highs together, the rally has stopped being a four-stock story.
The fuel was straightforward. WTI crude was down nearly 10% on the week and the 10-year Treasury yield dropped 11 basis points, both driven by rising expectations for a U.S.–Iran peace deal. An Axios report said U.S. and Iran negotiators had reached a 60-day memorandum of understanding to extend the ceasefire and launch negotiations on Iran’s nuclear program. The agreement still needs President Trump’s sign-off, but he has already posted his demands and said the naval blockade of the Strait of Hormuz will be lifted. Oil down, yields down, stocks up — and the market took the trade in size.
There are two sides being argued right now, and both have merit.
The bull side — which is what analysts have been hammering all week — is that this is earnings-driven, not speculation. Earnings are up 15–20% on the year and the order books are huge. Estimate revisions are tightly correlated with stock performance: tech estimates up, tech up; discretionary and financials estimates down, those sectors lag. Analysts are also pointing to a regime change in memory and storage — from commodity cyclicality to long-term agreements with prepayments and price floors — the kind of shift that has historically earned multiple expansion. And the runway argument: only about 9% of the top 3,000 U.S. equities are generating meaningful AI revenue today, and only about 15% are even talking about AI productivity savings. Micron is the clearest example of how violently revisions can reset.
The bear side — which I respect even when the tape is going the other way — is that the word “exuberant” is showing up everywhere, and the 1999 analog is sitting on every screen. If you treat the ChatGPT release like the Netscape IPO, the calendar lines up almost exactly: we are around “February 1999” in this cycle, with the Nasdaq running at roughly a 27% annualized rate from the start. Where the picture is genuinely different is valuation — the NDX in 1999 traded around 60x trailing and 40–42x forward; today it is roughly 30x trailing and ~25x forward. Not cheap, but not 1999. The harder warning is breadth within tech: only about 40% of tech is beating the S&P, with leadership concentrated in a narrow group of names that are up ~90% while the S&P-ex-Technology has flatlined for two months. Crowded leadership is the kind of setup that unwinds hard when it does unwind.
Here is my bias, stated plainly. I follow what the market is doing, not what I think it should be doing. Right now the market is broadening, breaking out, and being rewarded for it. Until the chart breaks, I lean with the tape. The SPX and Nasdaq Composite are both running RSI readings around 73, which is overbought on any traditional read — but RSI is not a timing tool, and 70+ readings have done very little to slow this rally over the past two months. A profit-taking pullback would not surprise me at any point, but nothing on the charts is signaling a reversal pattern yet. June is historically a flat-to-weak month, but the momentum has been strong enough that seasonality may not matter this time around.
Next week. The monthly jobs report is on deck — consensus around +95K to +105K payroll gains and a 4.3% unemployment rate. Unless the headline or the unemployment rate is well off, it is unlikely to move markets much. The earnings calendar is the more interesting piece: Broadcom (AVGO), Ciena (CIEN), Credo Technology Group (CRDO), CrowdStrike (CRWD) and Palo Alto Networks (PANW) all report, with real ability to move sentiment across chips, networking, and security software. NVIDIA’s keynote at NVIDIA GTC Taipei at Computex has the potential to generate its own headlines on the AI side.
Bottom line — respect the uptrend, respect the momentum, respect the breadth. SPXEW, SPX, DJI, COMP and IGV all making new highs together is exactly the picture bulls want to see. The downside catalysts are clean to list: a breakdown in the Iran peace talks, resumed military action, higher oil prices, and higher Treasury yields. Any one of them could produce a down week. Until something on the chart actually breaks, the burden remains on the bears. Stay in the middle of the dance floor. Still close to the door.
Technical Analysis
Course Rules — Support, Resistance & ConfirmationI’ve been studying charts for 32 years now, as you can see week in and week out when I give you levels — that’s where price tends to settle for a fight between the bulls and bears.
This week I will give you the outline from my course rules on support and resistance; same applies for trendlines.
Support, Resistance, and Price Confirmation
Support and resistance are foundational concepts in technical analysis that represent historical reaction zones where price has previously shifted due to changes in supply, demand, and liquidity behavior.
Support
A support level is a price zone where previous buying response or liquidity absorption has slowed or reversed declines.
In intraday trading, prior session lows are commonly used as reference points for potential support, though their significance depends on market context, volatility, and participation.
How to Use Support Levels
Long positions / breakdown scenarios: If price breaks below a key support zone with strong participation, it may indicate a shift in market structure and weakening demand. This can justify reducing or exiting long exposure depending on overall trend context.
Buying at support (confirmation required): Avoid entering blindly at support. Wait for confirmation of response, such as:
- rejection candle structures (e.g., wick rejection / hammer-type formation)
- stabilization or compression in price action
- evidence of absorption or buying pressure in flow/volume
Short positioning near support: As price approaches support, probability of reaction or liquidity sweep increases. Risk management becomes more important than assuming immediate continuation, as temporary rebounds are common.
Principle
Support and resistance are dynamic reaction zones driven by liquidity and participation, not fixed barriers. Their validity is determined by price behavior and confirmation, not the level itself.
Bottom Line
- Support/resistance = reaction zones, not exact price lines
- Breaks matter, but false breaks are common
- Confirmation requires price + structure + participation
- Levels evolve (support ↔ resistance flips)
- Behavior > level (market reaction defines validity)
S&P 500 — SPX
Cleared 7,570 · RSI 73SPX has been above the 20, 50 and 200-day moving averages since April 7. The trend structure is clean and bullish on a long-term basis; RSI came in a bit toward 60 and settled at 73. Next resistance is the next trendline I had around 7,570 (we closed the week just above it) and 7,710, and support around 20 Day MA 7,250 & previous trendlines.
I would keep an eye on S&P equal weight — for two weeks now I pointed out to see whether it will break all-time high. That has happened. We want to see follow-through.
Nasdaq Composite — COMP
26,500 Trendline Resistance ClearedEvery resistance level was taken out. The only resistance I had — some trendlines around 26,500 — were taken out, then the next Fib# is 29,391. Next supports can be found at a retest of last all-time high 24,040 & or the moving averages.
Up 20+% off the March 30th lows. I pointed out last week the Relative Strength Index (RSI) was at 82; it settled this week at 67.
Dow Jones Industrial Average — DJI
Broke Out · No Resistance Till 52,645DOW, like the equal-weighted S&P, also broke out. If we manage to clear this week’s high, I don’t have any resistance till 52,645. Support are the moving averages and trendlines.
Russell 2000 — RUT
Broke All-Time HighsRUT broke its all-time highs. A pull-in to the lower band of its Bollinger Bands found support. The only resistance I have is 3,120.
VIX — Volatility Index
Rejected at 20 DMA · Next Support 12.71Keeping an eye on the CBOE Volatility Index (VIX): in order for the market to stay up, I would like to see the VIX continuing to trade below the 50 and then the 200 DMA. VIX found resistance below its 20 DMA. Next support 12.71.
Crude Oil WTI — CL
Broke 50 DMA · 100 DMA NextAs you see on my chart the levels I have drawn out a few weeks ago are playing out perfectly — they are acting as support and resistance zones based on where price is coming from. We broke support at the 50 DMA. Next up is the 100 DMA support and the purple Fib# lines.
Gold — GC
200 DMA Found Support Twice · Keep It LightGold has long & medium support at the 200 day MA. It hit the 200 DMA again this week and found support. I see short-term resistance at the Fib levels I have and the 100 & 50 DMA; two weeks ago I wrote they appear as if they want to cross down soon — that happened last week. The Fib# horizontal lines are working as areas for trading points. I would be cautious around here — the 200 DMA has now found support twice (March 23 and again this week). Keep it light and small until things sort themselves out.
Fixed Income — 10-Year Treasury Yield
Watching Purple Lines & Moving AveragesFour weeks ago I wrote that the significant march higher in yields is probably the bond market suggesting to the equity markets that this may be stagflation — but the market doesn’t seem to be listening; the AI momentum is very strong. What the Fed will do is the question on the table. Look for my next levels using the purple lines and the moving averages.
US Dollar Index — DXY
38% Fib + 2008 Trendline — S&R TradingChart is showing support at FIB support lines 38% I drew out a few months ago. (If 38% is supported that’s usually a bullish sign.) The same goes for the upward sloping trendline I drew out, which dates back to 2008. If this area doesn’t hold, we would need confirmation before it turns into resistance. (That area has held a few times now.) Support and resistance is what it’s about of late.
Bitcoin — BTC
Levels Playing NicelyI’ve been showing you this level for a few weeks now. Chart is showing resistance at the 100 DMA and a Fib# at 79,826. (That level was hit a few times and held, but two weeks ago it broke that resistance, and longs needed to see that area turn into support — which didn’t materialize.) Support was found in the 61–65,000 area; closer supports are the horizontal lines I have. Next resistance is 84,300 & 85,600 and then the 200 MA. The levels are playing very nicely.
Futures — Commodity Complex
Chart ReferenceChart reference for the broader commodity complex this week — see the full Weekly Commodities Futures Overview section below for the full rotation read.
ETF — IGV Software
Inverted H&S Worked · Watch Downside RiskLast week I wrote: IGV appears to be breaking out from an inverted head and shoulders. (That seems to have worked — it doesn’t always work.)
IGV holds the support zone $74.38 I pointed out to you in previous weeks — by the way, that’s a healthy retracement via the Fib#’s. Next resistance $88.23 was taken out, then the $94 & $99 and the 200 DMA. Watching my horizontal support and resistance lines which seem to be working nicely. But if this market rolls, I would be scared of this one.
Silver Futures — SI
Consolidation · Levels Not WorkingMy levels aren’t working for Silver — it’s mostly support and resistance lines per prior days and weeks. I see consolidation.
Semiconductors — SOX
30-Year High · Closed Below 13,072Are you kidding me — does every big institution use Fib#’s? Just look at this. I’m just your average Joe; I show you what I’ve studied from real gurus — and this is mind-blowing.
SOX at a 30-year high. Read into that what you want. Semis lead at inflection points, both up and down. Next resistance area 13,072 — we hit that level this week, broke through it, and closed below. Just follow the horizontal lines, MA and trendlines — be cautious, very volatile.
NVIDIA — NVDA
Following the Biggest AI PlayTwo weeks I’ve been pointing out we may see a sell-on-the-news reaction after earnings, because that has been the trend. The next resistance for NVDA on my charts is $270. Support can be found at the MA and horizontal lines.
Weekly Economic Calendar
Week of June 1 – June 5, 2026| Day | Time ET | Release |
|---|---|---|
| MON 6/1 | 9:45 AM | U.S. Manufacturing PMI |
| MON 6/1 ⚠ | 10:00 AM | ISM Manufacturing PMI |
| MON 6/1 | 10:00 AM | Construction Spending |
| TUE 6/2 ⚠ | 10:00 AM | JOLTS Job Openings & Labor Turnover Survey |
| WED 6/3 ⚠ | 8:15 AM | ADP National Employment Report |
| WED 6/3 | 9:45 AM | U.S. Services PMI |
| WED 6/3 | 10:00 AM | Factory Orders |
| WED 6/3 ⚠ | 10:00 AM | ISM Services PMI |
| WED 6/3 | 11:00 AM | Global Services PMI |
| WED 6/3 | 2:00 PM | Federal Reserve Beige Book |
| THU 6/4 | 8:30 AM | Weekly Jobless Claims |
| FRI 6/5 ⚠ | 8:30 AM | Employment Report (Non-Farm Payrolls) |
| FRI 6/5 ⚠ | 8:30 AM | Unemployment Rate |
| FRI 6/5 ⚠ | 8:30 AM | Average Hourly Earnings (Month-over-Month) |
| FRI 6/5 ⚠ | 8:30 AM | Average Hourly Earnings (Year-over-Year) |
| FRI 6/5 | 3:00 PM | Consumer Credit |
Key Earnings
Week of June 1 – June 5, 2026Monday (June 1): After Close — CRDO, HPE, HIVE.
Tuesday (June 2): Before Open — DG, VSCO, ODD. After Close — PANW, GTLB.
Wednesday (June 3): No Major Earnings Scheduled.
Thursday (June 4): IPO — SFPT, QNT, SSMR, INIO. Before Open — CIEN. After Close — LULU, RBRK, PL, DOCU, IOT, AGX.
Friday (June 5): No Major Earnings Scheduled.
Weekly Commodities Futures Overview
Recovery Momentum vs. Inflation ReaccelerationMacro Theme: Recovery Momentum vs. Inflation Reacceleration. This week marked an important evolution across commodity futures markets. The dominant theme shifted from simple stabilization toward a broader debate over whether improving risk appetite can coexist with persistent inflation pressures.
Markets are increasingly balancing improving global risk sentiment, stronger equity performance, and moderating recession fears against sticky inflation expectations, ongoing geopolitical uncertainty, and Federal Reserve policy uncertainty. Unlike prior weeks, capital flows are beginning to favor cyclical and growth-sensitive commodities while defensive positioning continues to unwind.
The dominant macro question now becomes: Is the commodity complex entering a sustainable recovery phase, or merely participating in a broader risk-on rally?
Key Macro Observations
- Equity markets continued recovering despite elevated geopolitical risks
- Treasury yields stabilized after recent volatility
- U.S. Dollar strength remains intact but momentum slowed further
- Commodity leadership continues rotating rather than broadening
- Inflation expectations remain elevated enough to support selective commodity exposure
- Institutional positioning is becoming more risk-seeking
One of the most influential markets in the complex this week. Ongoing Middle East tensions continue supporting risk premium; OPEC supply discipline constructive; demand concerns moderated slightly; inflation-sensitive flows supporting energy exposure. Buyers consistently defended pullbacks; higher lows continue developing; volatility elevated but more orderly. Transitioning from headline-driven volatility toward a more constructive trend environment.
Improved materially relative to prior weeks. Summer cooling demand expectations rising; downside momentum reduced; speculative positioning stabilizing. Bearish trend structure weakening; consolidation becoming more established; increased probability of countertrend rallies. Transitioning from a bearish environment toward a range-bound accumulation phase.
Continued benefiting from inflation uncertainty, geopolitical concerns, central bank demand, and moderating yield volatility. Strong support buying continues; pullbacks remain shallow; trend structure improving. Has moved beyond stabilization and is increasingly behaving like a macro accumulation asset. Remains one of the preferred macro hedges as uncertainty around inflation and policy remains elevated.
Outperformed gold this week. Improved industrial sentiment; strong precious metals participation; increased risk appetite. Relative strength improving; volatility remains elevated; momentum participation increasing. Continues benefiting from both its industrial and monetary characteristics.
Some of the strongest improvement within industrial metals this week. China stimulus expectations supportive; growth fears moderated; manufacturing sentiment stabilized. Consistent dip-buying activity; improved technical structure; reduced downside momentum. Progressing from stabilization toward an early recovery environment. One of the best indicators of improving global growth expectations.
Continues maintaining leadership across the commodity complex. Weather uncertainty, crop condition concerns, tight global inventories, export supply risks. Trend structures remain constructive; buyers continue supporting pullbacks; relative strength remains dominant. Risks: crowded positioning increasing, elevated weather sensitivity, higher probability of corrective volatility. Strongest trend sector but increasingly vulnerable to sharp weather-driven reversals.
Positioning & Flow (COT Insight)
Positioning trends continue shifting toward “selective risk expansion.” Long commodity exposure is increasing modestly; gold participation is improving; energy positioning is strengthening; agricultural longs remain heavily concentrated; defensive cash positioning continues to unwind. Implication: markets are becoming increasingly susceptible to rotation-driven leadership changes, momentum-driven rallies, positioning squeezes, and data-driven volatility events.
Key Cross-Market Signals
- Recovery Participation Is Broadening — equities continue improving, commodities attracting selective inflows, defensive positioning declining.
- Inflation Remains Supportive — inflation expectations continue supporting commodity ownership; hard assets remain attractive relative to fixed income.
- Dollar Strength Is Losing Momentum — Dollar remains supportive but less dominant; commodity headwinds easing modestly.
- Leadership Remains Concentrated — agriculture strongest, energy second, precious metals improving, industrial metals recovering.
Risks to Monitor (Upcoming Week)
- Core inflation developments
- Treasury yield volatility
- Federal Reserve communication
- Geopolitical developments affecting energy supply
- China growth and stimulus headlines
- Weather-related crop developments
- U.S. Dollar breakout or breakdown
Bottom Line
Closing SummaryCommodity futures markets are transitioning from a stabilization environment into a more constructive recovery phase. Geopolitical influence: elevated. Macro influence: dominant. Trend quality: improving. Positioning concentration: increasing.
This environment increasingly favors relative strength analysis, trend-following opportunities, tactical risk management, and monitoring crowded positioning. Current leadership structure: agriculture is the strongest leader; crude oil structurally bullish; gold and silver strengthening; copper recovering; natural gas stabilizing.
The commodity complex is no longer focused on whether a recovery can begin — it is increasingly focused on which sectors can sustain leadership as capital rotates back into risk-sensitive assets while inflation remains a persistent macro force. Still dancing — close to the door.
by Eli G Levy · eli@cannontrading.com · May 31, 2026 · Issue 021