Let’s be honest — the market feels like it’s standing at a crossroads right now.
On one hand, the S&P 500 is holding support at the 50-day moving average and showing signs of a possible rebound.
On the other hand, the Nasdaq is slipping below key levels and looks like it could tumble fast. So which way do we go?
Here’s what I think: it’s going to come down to the Mag 7.
If you’re not familiar, the “Mag 7” refers to the seven mega-cap tech stocks that have driven most of the market’s gains over the few years — think Apple (AAPL), Microsoft (MSFT), Meta (META), Nvidia (NVDA), Tesla (TSLA), Amazon (AMZN), and Alphabet (GOOGL). These giants hold a ton of weight in the major indexes, and if they’re not participating in the upside, it’s tough for the broader market to get going.
We’ve seen rotation into other areas — Energy (XLE), Utilities (XLU), and Financials (XLF) have all shown some strength lately — but that won’t be enough on its own. If the Mag 7 bounce, we could see a sharp rally into Q2.
But if they break down further, we’re probably staring at a deeper correction.
It’s not about tech needing to go parabolic — we just need them to hold their ground and stop dragging. If we can get a weekly close above $48 on the MAG7 ETF (MAG), that could signal the kind of strength needed to get a real rebound going.
I’ve explained a few times while I am cautiously optimistic for Q2 at this moment…
For one, most very quick corrections actually act as “flushes” and then get bullish again pretty darn quick:
In fact, every other drop this fast has been bullish immediately after.
And these quicker cycles have been more common lately, just like the flush we got in August of 2024 which ended up being a very bullish year.
The other thing that makes me optimistic is, frankly, that so much of the retail world is getting scared. When that happens, it usually means a flip is close. We saw retail bearishness hit peak levels in 2010 and 2020 if that tells you anything (though I do like to see more insider buying on the other side of that than we’re seeing now).
And, on top of that, this mid March bottom would make sense for seasonal bottoms over the last 20 years…
So, for all those reasons and a few others, I am starting to think Q2 could be really bullish.
But none of it matters unless the Mag7 do their part. So watch them closely.
One More Thing… The Weekend Strategy That Shouldn’t Work (But Does)
Now, while the market chops back and forth, I’ve been testing something that honestly surprised me — a weekend-only trade on SPY. The idea was to find high-probability setups using options that expire Monday. And despite the usual thinking that weekend trades are “too risky,” the data told a different story.
Turns out, a lot of the big, scary Monday losses that make weekend trades seem risky are just statistical outliers. When you factor in how many of these trades actually hit their profit target before the weekend even starts, the win rate jumped as high as 90%.
It’s one of those rare setups where market fear creates an opportunity — and I’ll be sharing more about it live this weekend.
Watch the replay HERE before the video gets pulled down!
Oh, and one more thing. We’re doing Mapping the Market today at 1:30 pm ET. We’ll break down the bullish market we’re seeing today and a whole lot more.
— Nate Tucci
