Seasonal Context & Events

Earnings season? Officially wrapped—close the books and move on. This week brings no options expirations and no holidays, which means the Market’s not getting any artificial jolts or breaks. What we do have, though, are end-of-month flows—those lovely portfolio rebalancing moves that can throw in a bit of noise or spark short-term action. So while the calendar’s quiet, don’t be surprised if price action gets a little twitchy as money managers do their usual end-of-month housekeeping.

Key events include:

• 03rd June 14:00UTC JOLTs Job Openings
• 05th June 12:30UTC Initial Jobless Claims
• 06th June 12:30UTC Unemployment Rate

Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

I don’t think we’ve covered this before—pretty sure we haven’t. But even if we did, someone new here might find it useful, and if you already know it… consider this a quick refresher.

Let’s keep it simple: the S&P 500 is what’s called a market-cap weighted index. That means the bigger the company, the more influence it has on the index. So when giants like Apple or Microsoft move, they drag the whole thing with them—up or down. Now, indexes like VALUA or SPXEW work differently. SPXEW stands for the S&P 500 Equal Weight, where every stock gets the same importance—Apple counts just as much as the smallest name in the index. VALUA, on the other hand, is a value-focused index—it tracks the performance of stocks that are considered “cheap” based on certain financial metrics. So while the S&P 500 might be flying because of a few tech giants, the equal-weight or value indexes could be telling a totally different story. That’s why looking beyond just the headline index matters—it shows whether the strength is broad or just riding on the backs of a few names.

I’ll post a few examples where this bit of knowledge could’ve helped guide a decision. Does it work every time? Of course not. But in my experience, it’s one of the more reliable tools when it comes to spotting major turning points—so we’re talking longer-term signals here.

Here’s what we’re looking at:

• Blue Line – S&P 500 (market-cap weighted)
• Red Line – SPXEW (S&P 500 Equal Weight)
• Violet Line – VALUA (Value index)

The scale is weekly, and we’re measuring in terms of % change.

The green arrow marks the week of July 9th, 2007. The red arrow? That’s October 8th, 2007. What stands out? The S&P 500 pushed to a higher high—but take a look at the other two: SPXEW and VALUA didn’t follow. No confirmation from the broader or value segments. And what happened next? Well… we all know how that story ends.

Fast forward to 2020—yes, the signal’s still shown up, but in a more subtle way. Not always as clean on the chart, but definitely there if you dig in. Go take a look for yourself: July 2011, May 2015, and September 2018. The signs were there, just a bit quieter.

Same colors, same meaning. The green arrow marks the week of January 13th, 2020, and the red one is February 10th, 2020. The divergence? Still there. No need to refresh your memory on what came next—just glance at the chart, it says it all.

Above, you’re looking at the beginning of the 2022 bear market—once again, the divergence laid the groundwork before the drop.

Above, you’re seeing what recently happened with the whole tariffs situation and the usual round of blablabla. The divergence showed up again—quiet, but there.

Now, does this magically predict a financial crisis, a global pandemic like COVID-19, or a sudden geopolitical decision? Not at all. But if you’re already thinking, “Hmm, something big to the downside might be coming,” then this can serve as a solid confirmation tool—especially when the usual market whispers start circling: “It’s going down.”

What about bottoms? You might think, “Oh easy! So I just look for bullish divergence, right?”
Yeah… not really. Unfortunately, it doesn’t work nearly as well—or as often—as it does with tops.

Why? Because you’ve got to accept a hard truth: bottoms are events—they happen fast. Tops, on the other hand, are processes—they take their time, unravel slowly, and give you clues. Bottoms? They just show up, slap you in the face, and take off.

What happened last week? Forecasts pointed up for the shortened week—and direction-wise, they weren’t wrong. But those R levels? Stickier than expected. After Tuesday’s candle, I figured we’d smash right through them. Instead, the Market showed up with a bit more resistance than enthusiasm.

Support & Resistance Levels

R3	6095
R2	6049
R1	5988
Close	5911
S1	5785
S2	5719
S3	5677

Forecasts

Plenty on the radar this week. We’re kicking off a new month—and historically, that’s often a bullish stretch, especially the final days of the previous month and the first few of the new one. But charts are throwing mixed signals. The two red arrows highlight a high and a lower high—classic setup that usually leads to a lower low. If the Market closes below the lowest low between those two highs (which happens to sit right on the blue and green lines), it could confirm a double top and trigger a drop, potentially down to S2 and into that open gap.

Resistance levels are more spaced out than last week, so upside—if it comes—might face less friction. But here’s the catch: we’re also entering beach season, aka the part of the year when retail volume naps in the sun and Market moves get thinner and weirder. I had expected some action between May 29th and June 5th, but so far, the charts aren’t playing along. When I see this kind of divergence between technical setups and actual behavior, I lean one way: choppiness.

I’m watching Thursday (around) as the first real window for something meaningful to break loose. Until then, stay flexible. A close below the key low could trigger downside. A new higher high or a solid higher low might light the fuse for a push upward. In other words—direction is likely, conviction is optional. Trade accordingly.