Strong but stretched

Nick SchmidtMay 31, 2026

20D trend

QQQ

SPY

IWM

Overall Market Thoughts

Last week closed strong across the board. May was once again another powerful month. For the most part recent trades continue to get traction, leaders are leading, and the market continues to act constructive. There are however some signs that have me a little bit cautious short-term.

Reasons I am going to be careful this week

1. Semis are extended again. Last time they became extended 4 weeks ago we saw a quick 2 week pullback. This has been the strongest group and it looks like they need to rest again. I am pretty concentrated in semis and 2 weeks ago the weakness was a good opportunity to add exposure that I didn't really take advantage of because I was focused on managing my positions. Many leading stocks mostly in Semis but also across other growth groups like Space & Neoclouds are also short-term extended.

2. Optical/Photonic stocks were the first group to lead us higher. They deserve a rest and its best for the market if they rebase and digest their moves. We saw weakness last week across the group which is fine as long as they start base building. A full break down is not a good sign.

3. I don't mention sentiment often but the Put/Call ratio ended last week at the lowest level since 2021. This means buying is heavily skewed towards Calls as people chase this market. It doesn't mean we have to pull back but its something notable to pay attention to because whenever everybody swings too far to one side its not sustainable.

"The market likes to make a fool of the most people all the time."

4. This one is personal but April & May I made a ton of progress. Its very easy to give progress back and I want to protect it. I'm not concerned with keeping my account at highs here I know most time is spent in a drawdown but I'm not willing to give too much up.

Overall outside of those short-term observations I remain very optimistic on this market

• We have had no real distribution yet which always clusters up as a market tops.
• Stocks continue to break out, hold key levels, and act like leaders.
• We are seeing strong rotation. Even with Semis extended we saw a hard rotation into Software again last week. Rotation in growth groups keeps a bull market alive.

Semis remain the top group, but focus this week in my opinion should be on Software seeing fresh breakouts, rare earth stocks, and robotics.

Current Positions

MU

20%

This is my top priority managing this position. Just like 4 weeks ago after a straight up move we digested and pulled back to the 4-week. Thats healthy action and expected, and my goal is to pad my equity curve with my other positions if needed to continue to sit with this.

I am watching the 4-week for an exit on a closing basis, or if this ends up displaying parabolic climactic action selling more into strength.

Avg cost

$413.47

Last

$971.00

P&L

+134.84%

TSLA

25%

Getting tighter and tight coming up the right side here. Not much to do yet with my current position.

Avg cost

$407.88

Last

$435.79

P&L

+6.84%

NBIS

15%

I don't have an A+ entry in this I had to get in a secondary entry on a pullback to the 4-week when I bought. Sneaking in to a leader. For me I am watching the rising 4-week on a closing basis as a guide to exit. So far we continue to find support.

Avg cost

$191.78

Last

$231.09

P&L

+20.50%

CRDO

15%

This has earnings Monday after the close. Expected move is around 17%. Current cushion here is 17%. If it holds strong into close Monday I plan on sitting through earnings. If it pulls back and I lose my cushion then I will exit before earnings.

Avg cost

$201.56

Last

$236.03

P&L

+17.10%

ASML

10%

This has been a slow position but acting well. The pullbacks to the base were supported which indicates resistance -> support. Now seems to be riding the 4-week. With semis extended if they pullback it may put pressure on this. As long as it holds above its base pivot structure is intact, but not sure I want to sit around. Currently stops set to even but may decide to exit if we lose the 4-week and revisit or use funds elsewhere.

Avg cost

$1535.38

Last

$1612.76

P&L

+5.04%

DOCN

10%

3 weeks tight. No cushion yet using original stops. If shaken out will watch to buy back. Want it to push out of this range.

Avg cost

$155.68

Last

$155.95

P&L

+0.17%

My Focus

4 charts

TSLA$435.79

Robotics

This has been a tough stock but its doing everything right. Currently supported by $430 level which can be used to manage risk. If weakness, eyes on the recent 3 week range it broke above $415-$430.

DOCN$155.95

Software

Strong software name. Up over 200% in the past few months and instead of pulling back its basing at highs. This is a big sign of strength. We want to see it break out of this range to get working. I prefer weak or quiet entries so started some last week in the range.

MP$64.70

Materials

Trump administration took a 15% stake in this few months ago. Higher low 2 weeks ago indicating its coming up the right side of its base. Rejected last week at its $70 base pivot reaffirms that level is important. Watching for another higher low this week, or push through $70.

CRCL$113.00

Fintech

Missed the breakout of this from its contraction few weeks ago. Since then its been building a base above its pivot. Shakeout last week makes it look more appealing.