QM Trades Weekly: Markets Grind Higher, But Warning Signs Emerge Amid Tariff Truce
Over the weekend, headlines were dominated by the breakthrough tariff agreement between the U.S. and Europe—a deal that will scale back steel and aluminum duties while easing tensions over electric vehicle imports. The move has lifted sentiment across global equities, particularly in cyclical sectors tied to trade. But while the headlines are upbeat, our signals at Quantmatix tell a more nuanced story.
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📈 Markets Are Positive, But Stretched
U.S. equities continue to grind higher, with the S&P 500 now just 2.2% away from its Monthly Resistance level. Technically, the Daily Band has moved outside the Weekly Band, a strong indicator of market stretch based on our Quantmatix models. Despite occasional choppiness in Daily Signals, lower volatility is allowing markets to rise steadily—though perhaps mechanically.
We're seeing a familiar late-cycle behavior: broad strength with a growing number of selective profit-taking opportunities.
⚠️ Profit-Taking Clues in Tech and Materials
A key observation this week is the increasing number of negative reversals, especially in the Semiconductors and Software & Services sectors. In fact, 26 stocks in these sectors have triggered Negative Reversals, nine of which are Nasdaq 100 names.
Roblox (RBLX) has been a standout performer this year, but now shows both a Negative Reversal and an Exhaustion Signal. Based on Quantmatix’s volatility-adjusted modeling, the stock has -12.9% downside potential to hit Target 1 at $103.49. For those who’ve enjoyed the ride up, this may be a moment to secure gains.
In Materials, we’re seeing some light signs of rotation, though no decisive conviction behind a broader move lower yet. Still, names like:
Freeport-McMoRan (FCX) have printed a Top Quantmatix Negative Reversal, projecting a -10% move to $40.14.
CF Industries (CF) is also under pressure, with a Target 1 level of $86.22, or -7.25% below the weekly close.
✅ Where the Bulls Are Hiding: Utilities & REITs
Amid the cooling signals elsewhere, two areas are flashing green:
Exelon (EXC) in Utilities
Mid America Apartments (MAA) in Real Estate
Both show Top Quantmatix Positive Signals, though the upside targets are modest: +2.5% and +3%, respectively.
🧭 What We're Watching
This marks the sixth straight week where we've had fewer than three new large-cap Top Quantmatix Positive Ideas in the U.S.—a consistent red flag that shouldn’t be ignored. Yet, the scores across the board remain positive, so we're staying aligned with the trend for now.
As always, we’re not fighting the tape, but we are preparing for what could be an inflection point. With the macro backdrop improving slightly thanks to the U.S.-Europe tariff détente, there may still be a little more fuel in the tank—but tactical positioning will be key.
📌 Key Takeaways:
Markets are stretched, with S&P nearing resistance.
A growing list of negative reversals—particularly in high-beta tech.
Profit-taking emerging in Materials, though without momentum (yet).
Only two sectors showing fresh long ideas: Utilities and Real Estate.
Keep riding the trend, but be selective and watch for directional triggers.
Disclaimer:
The trade ideas and commentary shared on this page are provided for educational and informational purposes only. They do not constitute financial advice, investment recommendations, or an offer or solicitation to buy or sell any securities. All content reflects the opinions of the authors and is subject to change without notice. QM Trades does not provide personalized investment advice and is not a registered investment advisor or broker-dealer. Always do your own research and consult with a licensed financial advisor before making any investment decisions. Past performance is not indicative of future results. Trading and investing in financial markets involve risk, including the potential loss of capital.