Sunday Edition: A Trader’s Market – Staying Sharp Near S&P 6000

In this week’s Sunday Edition, Carlos breaks down the wild swings in U.S. markets as optimism over a China trade deal clashes with Moody’s downgrade of U.S. credit. The S&P 500’s V-shaped recovery puts it near major resistance at 6000, and Carlos outlines a tactical approach for traders—including short setups, gold positioning, and where mega-cap tech could still rally. With rate cuts on the horizon and volatility still elevated, this is a trader’s market—here’s how to stay sharp.

“Stay tactical. It’s a trader’s market.”

Another week in the books, and what a ride it was.

We kicked things off Monday with a massive jolt higher in stocks—an overnight gap in futures that caught a lot of people off guard. The catalyst? A so-called “China trade deal” that seems to be agreed upon in principle… but nothing on paper yet. And let’s be honest, none of these trade deals are enforceable or legally binding anyway (that’s straight from the White House).

Does that concern me? Not really. The market thrives on extremes. Just a month ago in April we were swimming in extreme pessimism. Now we’re riding a wave of extreme optimism. Tide goes in, tide goes out. The trick is taking advantage of these emotional imbalances, because the market—especially the S&P 500—is really just a barometer of trust in American companies.

Let’s talk S&P 500:

What a V-shaped recovery. Even I was surprised by how fast we bounced back from sub-5000 levels. Whether it’s a “Trump put” or just pure reversion from oversold conditions, the bears got blindsided. But zoom out and look at how we closed Friday.

We got a credit downgrade from Moody’s: U.S. dropped from AAA to AA2. Sound familiar? Same thing happened in August 2023—I wrote about that back then too (see screenshot). What’s interesting is the sentiment shift:

• A few weeks ago, the market was looking for bad news (tariffs, data misses).
• Then it searched for any good news (GDP beats, soft CPI).
• And now? It’s looking for reasons to take profits.

Funny how that works—selling off right near 6000 on the S&P.

Here’s the reality: you don’t need to time extremes, you need to prepare for them. We trade probabilities, not absolutes.

My view looking ahead:

I expect some profit-taking as we start the week. 6000 on the S&P is a big psychological level, and I don’t see us breaking above it easily unless dip buyers absorb this downgrade headline and rip it back up. If they do—then sure, we can start talking new all-time highs. But I think that scenario is a bit less likely.

Why? Because we went from oversold to overbought on the Nasdaq in just four weeks. That’s not natural. It’s the same reason we shorted Gold when it was +30% YTD—it was overcooked. And just like I’ve said the past few weeks: this is a trader’s market.

SPX has gaps below.

• 6000 is now my line in the sand—resistance. I’ll be looking to short against it and play for downside gap fills.
• Gold: Neutral to bearish. Yes, it bounced at the tail end of the week, but the short-term trend is still down.
• Mega-cap tech: Still upside in specific names. AAPL, for example, is showing an inverse head and shoulders on the 1h/20d chart. That’s a bullish setup.

Economic calendar? Pretty quiet. Just a few PMIs and some Fed speakers. No surprises expected. The market is still pricing in the first rate cut in July. Until then, it’s just noise.

Long-term investors:

You had a solid dip-buy opportunity there at the heights of volatility (above 40 like we mentioned before) . But this may not be the last one. We’re still above major moving averages, but that could flip fast on any negative headlines. But you can’t deny the momentum here either. Stocks have more to go and all time highs are in play- we need the institutions to join the party. Stay tactical. Stay sharp.

Bottom line:

You’ll likely make more from trading this market than just owning it passively right now. Use the volatility. It’s your friend.

Let’s make it a great week! – Carlos– Carlos