New all-time highs were hit as SPY erased 22 consecutive down days in just seven candles! The classic V-bottom we are used to has made a triumphant return. This market tends to take the escalator down and the rocket boosters up. If you’re staring at a SPY chart right now, you might be convinced the market is physically incapable of going down. It triple-bottomed off the 100-day SMA and has launched right back into all-time highs and its long-term trendline resistance, which has held strong for two years.

While there were clear bottoming signals last week across SPY, RSP, and other stocks signaling a bounce was due, this bounce is insane. If you’ve been riding this wave, now is the time to lock in gains, set up collars, or buy some cheap protective puts. The next retest is coming, and you don’t want to be caught flat-footed.

SPY

SPY is pushing higher on declining volume and fading momentum, signaling caution as the rally begins to lose steam. A retest seems imminent and could bring SPY down to around $595. However, RSP tells a slightly different story. This entire move could simply be a retest of the 13 consecutive bearish candles we saw in December. If that’s the case, RSP might drop as low as the key support at $169—or even test its previous all-time high near $163. Such a scenario would likely drag SPY to new lows and align more closely with the broader wave count pattern, though calling for lower lows after the last seven days of explosive price action feels like a tough sell. If this rally turns into a bull trap, it would be a dramatic one. That said, as long as RSP holds above $175 on the next retest, the likelihood of making new lower lows remains slim.

RSP

This upcoming pullback should offer some solid risk-reward setups for long entries on many favorite stocks and indices—provided earnings season doesn’t decide to torch everything and send us to the new lower lows. Speaking of earnings season, it kicks into high gear next week with AAPL, MSFT, AMZN, META, TSLA, V, XOM, ABBV, ASML, CVX, QCOM, NOW, and a parade of other market movers reporting.

Adding fuel to the fire, we’ve got the FOMC meeting on January 29th. President Trump has already chimed in, saying he would "demand" lower interest rates—a subtle jab that hints at potential fireworks between the "President of Money" Jerome Powell and the actual President, Donald J. Trump. With inflation bottoming out 50% above the Fed’s target range and debt-to-GDP comfortably lounging above 120%, we seem to be in quite the pickle. Powell’s speech will be must-watch for the market as we try to decode how the architects of this planned economy intend to plan their way out of this mess.

TSLA

TSLA earnings are just around the corner, and the chart is setting up for two equally exciting scenarios. The ideal setup would be for TSLA to consolidate and stay within a range until earnings on Wednesday, avoiding any breakout or breakdown beforehand. This would create the potential for a move into the mid-to-low $300s on the bear side or a surge into the mid-$500s on the bull side.

If TSLA gaps up to $450 or $460 with the current chart setup, it would be an extremely bullish gap and a strong buy signal for a continued rally. On the other hand, a gap down could lead to a swift sell-off, aligning with the middle of a potential C wave lower. Should that happen, buying near the 100-day SMA could offer a fantastic entry point for those with the patience to let the position play out.

We’ll provide an updated analysis of TSLA next week, and of course, the TSLA master himself, Jerremy Newsome, is locked, loaded, and cheering hard for the green count!