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WEEKLY REGIME VERDICT

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BULLISH CLEAR

Posture: Full deployment, with FOMC-week tactical caution

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THE REASONING

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SPY closed Friday at $741.75, slightly below the 20 MA ($745.07) but holding well above the 50 MA ($722.80) and 200 MA ($686.30). The pullback this past week is cosmetic — Stage 2 uptrend structure remains fully intact.

QQQ at $721.34 is testing its 20 MA ($721.50) as support. The same controlled pullback pattern as SPY.

IWM (small caps) is the standout: $218.33, sitting at 52-week highs, perfectly aligned with all moving averages stacked beneath. Small caps participating at the high is a strong breadth confirmation.

Key levels to watch:

→ SPY support: $722.80 (50 MA)

→ SPY resistance: $745 (20 MA reclaim)

→ QQQ support: $717 (8 EMA)

→ QQQ resistance: $730

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BREADTH CHECK

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This is where the picture becomes clear.

% S&P 500 above 50 MA (S5FI): 60.43 (+8.57% on Friday)

% S&P 500 above 200 MA (S5TH): 61.03 (+3.02% on Friday)

Both breadth indicators accelerated sharply on Friday. S5TH just broke decisively above its own 200-day average — a structural bullish signal that typically leads price action on the indices.

VIX at 17.67 (-9.06%): no fear regime.

Verdict: Healthy and improving. Breadth is leading, not lagging.

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SECTOR ROTATION

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Money is moving with conviction this week. The sector rotation scanner shows clean separation between leaders and laggards.

BUILDING LEADERSHIP (RS accelerating vs SPY):

→ XLK Technology (+32.2)

→ XLV Health Care (+27.8)

→ XME Metals & Mining (+26.6)

→ XLI Industrials (+14.4)

→ XLF Financials (+14.2)

→ XLB Materials (+13.5)

→ XLRE Real Estate (+12.8)

LOSING GROUND (RS deteriorating vs SPY):

→ XLP Consumer Staples (-4.6)

→ XLU Utilities (-4.6)

→ XLY Consumer Discretionary (-9.2)

→ XLE Energy (-18.6)

→ XLC Communication Services (-24.2)

This is a textbook risk-on rotation: cyclicals leading, defensives lagging. Tech and Health Care at the top, Energy and Communication Services rolling over.

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MACRO FLAGS — WEEK AHEAD

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This is FOMC week. Plan accordingly.

→ Tuesday 16 June: FOMC Day 1 (no announcement, positioning day)

→ Wednesday 17 June (THE BIG ONE):

• 8:30 AM ET — Retail Sales (May 2026)

• 2:00 PM ET — FOMC rate decision + Summary of Economic Projections

• 2:30 PM ET — Warsh press conference

→ Thursday 18 June: Post-FOMC digestion. Volatility likely.

→ Friday 19 June: Quad witching week — options expiry can amplify moves.

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VERDICT RATIONALE

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The bull case is built on breadth, not price.

SPY and QQQ have pulled back to test their 20 MAs — that’s a normal, healthy reset within an established uptrend. What matters is what the rest of the market is doing while that happens. And the rest of the market is accelerating: 60% of S&P 500 stocks above their 50 MAs, 61% above their 200 MAs, both rising sharply on Friday.

That’s the signature of broad participation. Not a tired rally narrowing into a few names — a market where the bench is showing up.

The KISS posture is full deployment (0.75% risk per trade) — but with one tactical adjustment: FOMC week.

What invalidates this verdict:

→ SPY closes below 50 MA ($722.80)

→ VIX spikes above 22

→ S5FI rolls back below 50

→ Powell signals an unexpected hawkish pivot Wednesday

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EXECUTION FRAMEWORK — FOMC WEEK

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→ Monday 15 June: Trade A-grade breakouts with full size. Volume must confirm.

→ Tuesday 16 June: Trade selectively. Reduce position size to 0.5% on new entries.

→ Wednesday 17 June: NO new entries before 2 PM ET. Let FOMC clear.

→ Thursday 18 June: Wait for direction confirmation post-FOMC before adding risk.

→ Friday 19 June: Witching week — let the noise pass.

The system doesn’t ask you to predict the Fed. It asks you to size accordingly.

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WATCHLIST + TRADE PLAN (PAID)

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Paid subscribers receive immediately below:

→ The Weekly Watchlist with three annotated PCP setups

→ Entry levels, stop losses, and R-targets for each

→ The Trade Plan of the Week — fully sized, ready to execute Monday

Everything is decided before Monday opens. You execute. The system does the thinking.

Upgrade at kisstrading.uk to access the full system.

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Trade Tight · Think in R · Focus on Process

— Radu

KISS Trading

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⚠️ Educational only. Not financial advice. Always DYOR

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