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The Stock Market Should Have A Good Week With NVDA Stock Split On Tap

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The stock market should have a good week, but we are likely to see it hit a speed bump later in June, while gold, silver, and the precious metals complex are consolidating, and pausing, to work of the big gains they have made in the past few months.

There are some danger signs in the market. We saw what happens for a few days last week when Treasury bond yields tick up to the market, and we know that one day the yield curve will go from negative to positive to signal the end of this bull market, but we are in a moment of “AI” stock chasing. We are in a time when everyone sees the memes on their social media feeds, and the headlines on the news websites, talking about “AI” stocks, even though many of them are actually crashing, except NVDA, which keeps going up.

I’ll talk more about that tomorrow, but right now I just want to talk about the market averages, because they dipped a little last week and got to an oversold condition, with their daily stochastics below 20 and now starting to turn up.

You can see this in a chart of the DOW.

And a chart of the NYSE….

…..What the two charts suggest to me is that the stock market should have a rally from here. The S&P 500 should make new highs.

We saw a very narrowing of the market rally in the past two weeks, with only four stocks making almost all of the gains for the S&P 500 in May, and NVDA making up half of that!

But, this NYSE chart suggests that we should see a little expansion in the number of stocks going up for a bit, as many are now simply oversold, and so should go up. I looked through lots of stocks Saturday and that’s what I see.

The NVDA 10-1 stock split date is also on June 6, this Thursday, so a lot of traders are going to buy into that to “buy the rumor and sell the news.”

Shareholders of record on that day get their shares split.

I think, though, that the market could run into some more profit taking before June is over, after a lot of lagging stocks bounce enough to get overbought again. Also, people may sell “AI” stocks that go up with NVDA and are junk and then you have the Fed meeting the week after next. I’ll show you some of these junk “AI” stocks tomorrow.

Right now, though, the charts more clearly suggest that this should be a decent week for stock market bulls, barring some unexpected weird event.

For short-term swing trading, one could play oversold stocks by putting stop loss orders under their lows of last week and just selling at the end of the week or when their daily stochastics get overbought by crossing back above 80.

Here are four stocks, inside the S&P 500, lined up for an oversold bounce or larger rally from oversold conditions.

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