Doug

[Team Talarico @TeamTalaricoHQ]

BREAKING: Ken Paxton’s own lawyer just endorsed James Talarico:

“I defended Ken Paxton for years in the impeachment trial and in state criminal cases. But in my view, I think Ken has lost sight of his core mission, which is to represent the people of Texas. 

And unlike Ken, I believe that you, James, believe in unity over division and that you know how to assemble not only Democrats but Independents and Republicans and we need that right now. 

We need unity, we don't need any more division and that's why I'm supporting you.”

[John🎣 @BottomPhishing]

Friday was a reckoning. The Nasdaq plunged -4.18% to 25,709.43, its worst single-session decline since the tariff shock of April 2025. The S&P 500 dropped -2.64% to 7,383.74, snapping a nine-week winning streak. The Dow fell -1.35% to 50,866.78. The Russell 2000 cratered -3.6%, caught in the undertow alongside everything else. Volume surged on the Nasdaq, up +28.86%, the heaviest trading day in weeks. NYSE volume rose +3.30%. Both the Nasdaq and S&P 500 picked up distribution days, bringing the count to 3 on each. Exposure guidance dropped to 60%-80%, the first downgrade since the uptrend was confirmed in April. The confirmed uptrend holds, but the character of this market changed on Friday.

MarketSurge stock action was devastation. 485 stocks down on volume against 175 up. 10 near pivot but only 1 breakout. That 2.8-to-1 negative ratio matches Wednesday's ugly read, but Friday's came on massively higher volume, which makes it significantly worse. The snapshot captured it: techs, small caps dive despite strong jobs data. The word "despite" does a lot of work in that sentence. Strong data was the problem, not the solution.

The May nonfarm payrolls report landed like a bomb. The economy added 172,000 jobs, more than double the 80,000-85,000 consensus estimate. Unemployment held steady at 4.3%. March and April payrolls were revised higher. By any labor market standard, this is a strong print. But with PCE inflation at 3.8%, PPI at 6.0%, the 30-year yield already above 5%, and oil still elevated from the Hormuz disruption, the market read it as one thing: the Fed cannot cut, and the probability of a hike just went up. The 10-year Treasury yield jumped 7 basis points to 4.54%. The 30-year pushed back above 5%. Fed rate hike odds for December climbed to 68%. "Good news is bad news" was the cleanest read of the session.

Semiconductors bore the worst of it. The Philadelphia Semiconductor Index fell -10.3%, its worst day since March 2020. More than $1 trillion in market value was erased from chip and AI stocks in a single session. $NVDA dropped -6.2%. $AVGO fell another -7.9%, extending Thursday's 15% post-earnings decline into a two-day wipeout. $MU crashed -13.3%. $AMD lost -11%. $META fell more than -6%, pressured by news of a secondary equity offering on top of the broader tech rout. The selling that started with $AVGO's failure to raise its full-year AI chip target on Wednesday snowballed into a sector-wide liquidation by Friday. The AI infrastructure trade that carried the market to records for two straight months just gave back two weeks of gains in a single afternoon.

The defensive rotation was decisive. Healthcare and consumer staples were the only sectors in the green. Colgate-Palmolive gained +4%, Coca-Cola rose +3%, Johnson & Johnson added +2%. $GOOGL fell only -1% and $AAPL lost -1.2%, both holding up far better than the rest of the mega-cap complex. When the market flees from its leaders into toothpaste and soda, the risk appetite has shifted.

Citigroup's Bear Market Checklist hit 11.5 of 18 U.S. risk flags on Friday, its highest reading since the 2008 financial crisis. That's not a sell signal by itself, but it's the kind of institutional risk metric that feeds back into positioning. Funds that use these frameworks will be trimming exposure into next week.

From here, Friday changed the conversation. The nine-week winning streak is over. Exposure guidance dropped for the first time since April. Distribution days are accumulating on heavy volume. The semiconductor group that led the entire rally just posted its worst session in six years. And the jobs report confirmed that the economy is too strong for the Fed to offer relief while inflation is still running hot from the energy shock. The uptrend is still confirmed. The market has not broken its major moving averages. But the margin of safety just narrowed considerably, and the tape is telling you to tighten everything. Honor the stops. Reduce where extended. Let the leaders prove they can hold before adding any new exposure. The trend earned your trust for nine weeks. Friday earned your caution.

Tight lines and tighter stops 🎣
The StrikeZone for Monday, June 8:
Observe see how stocks open.

[Jeff Sun, CFTe @jfsrev]

Build your pullback Relative Strength watchlist starting with these 26 leading names that are still holding above the 10-MA with over $100M in dollar volume, even as the market slices through its rising 10 and 20-MAs.

$CLF — Steel
$ZETA — Software - Infrastructure
$TWLO — Software - Infrastructure
$OKTA — Software - Infrastructure
$NTAP — Software - Infrastructure
$NET — Software - Infrastructure
$MDB — Software - Infrastructure
$IOT — Software - Infrastructure
$DOCN — Software - Infrastructure
$BB — Software - Infrastructure
$SNOW — Software - Application
$FROG — Software - Application
$VSH — Semiconductors
$MRVL — Semiconductors
$BRKR — Medical Devices
$OSCR — Healthcare Plans
$TXG — Health Information Services
$FLEX — Electronic Components
$FPS — Electrical Equipment & Parts
$M — Department Stores
$UMAC — Computer Hardware
$DELL — Computer Hardware
$HPE — Communication Equipment
$APTV — Auto Parts
$RIVN — Auto Manufacturers
$VSXY — Apparel Retail

[Doug @DougStetzer]

I couldn't do my regular routine. My head just wasn't in it. I wasn’t ready to buy that dip, but the fix wasn't to just go chasing. I had to watch as some quick money was made in the group, knowing that I had missed the day.

I just kept repeating to myself what I had easily pointed out to my friend when looking for setups - “Tuesday was the day.”

https://t.co/KfiVZVr7rl

[zerohedge @zerohedge]

Why are Mag 7s suddenly scrambling to sell expensive equity? Because as we reported a month ago, the debt channel has shut (except for occasional SPVs). Good lucking funding $5 trillion in capex

[Doug @DougStetzer]

Important video about the 'when' of entering a position vs just locking in on setups. Over the last couple of weeks talking to another trader I speak with and looking at setups I was constantly responding, "ya, but Tuesday was the day". Tues being May 19, the best pullback entry of the latest move.

And sometimes you miss it. I missed that day. Daughter graduation, family in town, mom fell and broke her ankle (doing ok!) total chaos. Couldn't do my regular routine. My head just wasn't in it.

But the fix wasn't to just go chasing. I'll just have to wait for the next one.

Situational awareness (including your own) beats individual setups.

[Ariel Hernandez @RealSimpleAriel]

6/7/2026: One Ugly day or something more?
- $XLK loses 6.66% but ultimately it was a pullback that needed to happen
- $EWY -14% played a big roll in our markets also coming down since they have been the memory trade for the last year. $MU $SNDK $WDC $STX
- $XSD $WGMI $PBW $COPX $GDXJ $URA $SMH $TAN all effectively down double digits. And in some cases with the gold and uranium they become no touch until they can establish themselves back above their long term trend.
- Aerospace and Defense $UFO back into the 50sma, could be a spot to consider but with SpaceX IPO coming this week I think sitting on the sidelines looks like the better option. $RKLB $PL $ASTS
- $BTC $ETH not much to be said there, lots of negativity around the crypto space right now but there is no real reason to try and predict a bottom. Before it ever makes a big move it will need to reestablish itself back above the 200sma.
$IGV after briefly trying to reclaim it's own 200sma we quickly rejected that area with the help of $PLTR $MSFT $CRM $NOW.
Healthcare Plans and Drug Manufacturers have been one of the standout groups this week and over the last month. $UNH $MOH $LLY $OSCR $GH. Genomics deserve a mention as well. $ARKG $TXG.
- Maybe if we get a gap down/washout tomorrow there is a chance for a quick mean reversion setup but there is all the reasons in the world to just remain patient here for ranges to tighten back up.

[Doug @DougStetzer]

"not to be in the market all the time and trade way less."

[Anand @anandragn]

This might be the best 30 seconds one can spend this weekend.

2005 or 2026, some things just remain timeless.

Also, it’s summer right? ☀️

[peoplewish @Peoplewish]

@luis_og86 yes

[Doug @DougStetzer]

Great traders telling us the time of easy money is over.

[Martin Luk @martinlukkt]

It's a great time to take time away from the screen and stay off the buttons, no matter how good or bad your trading has been.

[Christian Flanders @CFlanders7]

I would recommend traders go back and study market moves post volatility apocalypse in early 2018. The October 10th 2025 sell off and what happened after. Could also look at large one day “kill” bars during other rallies and see what happens next.

A lot of technical damage has been done. Have to watch very closely and see if we can recover fast or if it takes more time.

Speaking from past experience. I am certain that many people who missed the early stages of the rally got hammered today after forcing size to try to catch up or buying the sell off today on leverage. Old me would try to make money back in the likely ensuing volatility instead of waiting for a clearer picture to emerge.

[Matthew Yglesias @mattyglesias]

Why did he construct an analogy in which he is on the side of the Nazis?

[Doug @DougStetzer]

Looking to regroup on my writing after shifting focus from energy markets to my own swing trading (mostly equities).

Here's my first stab taking note of Friday's distinct change in character in the markets.

The last nine months of trading has been distinguished by three days, three distinct changes in character for how the market has behaved. Friday was one of them, and you would be wise to keep in mind how it played out last time.

On Oct. 10 last year, the QQQ broke its recent up trend - opening at the highs and closing at the lows, breaking through the 5, 10, and 20 day moving averages all in one go. The market was down about 3.5% for the day.

Friday was similar, except this time you actually got a warning first. The gap lower on Thursday (that was promptly bought up) was there for those paying attention. This was the warning shot.

“I’m sure that was just something random.”
~Nick Drendel

Thanks to @RealSimpleAriel @NickDrendel and @Clement_Ang17 and the rest of the MarketPulse crew for helping me through the process.

https://t.co/Nx9vOozY5c

[John Harwood @JohnJHarwood]

Fox is disgusting trash

[Clement Ang @Clement_Ang17]

Lets see a repeat of this earnings call now 😆🩸

[Republicans against Trump @RpsAgainstTrump]

WaPo: More than half of the donors to Trump’s White House ballroom project have received new or expanded federal contracts worth over $50 billion in the past six months, according to a report released Thursday by a government watchdog group

Endless corruption

[The Ocean Cleanup @TheOceanCleanup]

The rainy season is starting in Guatemala, bringing trash tsunamis down the Rio Las Vacas:

[Richard Hanania @RichardHanania]

India has sent 96 people to America who started billion dollar companies. No one else is even close.

There's only about 5 million Indians in America. Almost one in 50,000 of them is a unicorn founder!

What a holy, special, beautiful people.

I will always fight for them.

[Clement Ang @Clement_Ang17]

04 June 2026: The Environment Is Shifting 🛞

Market Commentary:

Churning day for the indices, with the QQQ failing to make further price progress higher on increased volume. Under the hood, distribution/profit taking is rather evident with many of the leading thematics selling off. That said, the profit taking is under the context of egregiously extended moves, making many charts still look 'normal'.

In dollar land, the DXY resolved higher as it challenges the $99.50 level. Nothing has changed much in precious metals: both Gold and Silver chugging lower below the 10/20/50 MAs. Copper on the other hand staged a DTSS entry vs the 13 May LSP.

In crypto land, jarring relative weakness as BTC/ETH/SOL/XRP are now leading to the downside (yow! are we having fun yet?).

The environment is shifting, preservation of capital comes to the forefront.

Notes:

> Very poor price action with distribution across the board. Unlike the mid-May pullback, individual charts across different themes are: (1) Losing their RS phase, (2) Structurally breaking moving averages. MRVL looks like a blow off, which does not bode well for the semiconductor sector on any follow through lower.

> Crude oil's price pattern reminds me of Gold consolidation between Apr - Aug 2025. Macro coming back into the picture could shake things up.

> Best time to own stocks is when NOBODY wants it. Now, EVERYONE wants stocks - decide wisely which boat you want to be in.

HAG1 !

[Rory Johnston @Rory_Johnston]

literally yesterday

[Jesus Freakin Congress @TheJFreakinC]

🚨BREAKING: The Secretary of Homeland Security just admitted, on camera, that he is going to violate your First Amendment right to free speech.

He said, “I have ZERO tolerance. If you verbally assault our officers… we will find you, we will arrest you.”

Except… that’s not how the First Amendment works.

Unless someone is making a credible threat of violence, speech… even rude, angry, or insulting speech… is still protected.

That’s the whole point of a free speech clause… to protect the people from situations where those in power don’t like what’s being said.

So, when a top federal official starts framing “verbal assault” as something you can be arrested for, without clearly defining it as an actual threat…

It stops sounding like protecting officers, and starts sounding like a government trying to silence people who speak out against it.