Good afternoon, everybody. JD here with your Rational Trader market analysis daily.
In today’s video, I want to highlight something I’ve been watching closely: a quiet but fascinating tug-of-war between Main Street and Wall Street.
It’s not just a narrative. It’s visible in the price action — and it’s shaping how I’m thinking about the next few weeks in the market.
Let’s dig in.
Wall Street Missed the Rally
We’ve seen a strong bounce off the market lows lately. But surprisingly, it hasn’t been driven by institutional money. In fact, Wall Street — hedge funds, macro funds, the “smart money” crowd — has largely missed this move.
According to the Wall Street Journal, macro-focused hedge funds have been whipsawed by recent volatility and are underperforming. They’ve been sitting out while the market marches higher.
That’s a reversal of the usual script.
Main Street Is Leading the Way
In volatile environments, it’s typically the retail crowd that panics and runs for the exits.
But this time? Main Street is leading.
The individual investor has been stepping in, staying in, and in some cases driving price action.
The Nasdaq is now pushing toward historical highs — all time highs — and much of that lift has come from Main Street activity. Like it or not, that’s the reality — and it’s worth paying attention to.
Why the First Half of June Matters
Since mid-May, we’ve been consolidating. Building a base. Then the calendar turned — and almost like clockwork, we started to see bullish momentum pick up again.
There’s a reason for that.
The first two weeks of June are historically strong for stocks. That’s a seasonal pattern that’s held up over time.
Yes, things often get wobbly in July and August. But June — especially the first half — tends to have a tailwind. That’s the glide path I’m watching.
Just Like Politics…
This dynamic between Wall Street and Main Street isn’t unlike what we’ve seen in the political sphere.
Think back to the energy that brought Trump to office — the power of the grassroots voter, the outsider.
We’re seeing something similar in the market: the crowd taking the lead, while the institutions play catch-up.
I’m not taking sides. I just observe.
And right now, what I’m observing is that the individual investor is doing what the institutions haven’t — riding this rally.
Caution Signs and Breadth Warnings
That said, I’m not throwing confetti just yet.
The last couple of days haven’t thrilled me. Gains have come, yes — but they’re being driven by momentum stocks, not broad market participation.
Many of the high-quality names I follow — especially those that show up in my Two Sigma system — did really well late last week, even as the indexes moved sideways.
But so far in June, they’re lagging.
That’s a red flag. A rally without breadth doesn’t usually last.
What Would Make Me Bullish From Here
Here’s what I want to see:
If Wall Street joins Main Street — if the institutions finally jump on board — then we could get a much more powerful rally. A broader lift. The kind that doesn’t just drag the indexes higher, but raises all boats.
If that happens, June could turn out to be a very positive month for stocks.
Until then, I’m watching. I’m adapting. And I’m staying rational.
Talk soon,
JD
The Rational Trader
P.S. Geof’s “opening bell” strategy could have you done with your trading in 20 minutes! Check it out here.
