Caruso Weekend Report: May 25, 2025
Weekend Summary
Buying showed up just when needed as Friday’s market dipped into FEAR as indicated by our FOMO indicator. That’s exactly what you want to see in a healthy market: markets climbing the proverbial wall of worry and seeing negative news met with buying.
The fear was largely driven by headlines about a bond market “sell-off.” But look under the hood — 10-year yields remained stable, and high-yield bonds held up just fine. If you look at the “average True Range” beneath the chart, you’ll notice that this week’s price action was hardly out of the ordinary. In other words, the bond market “panic” didn’t align with the actual data. Stocks shrugged it off and closed strong.
Despite last week’s volatility, net highs returned on the NYSE — another sign of underlying strength. This breadth under the surface suggests we’re not just being led higher by a handful of mega caps, but by a broadening group of stocks.
Clear leadership continues to emerge in AI and crypto-related stocks. Stocks like GEV(AI), CLS(AI), HOOD(CRYPTO), and IBIT(CRYPTO) are standing out with strong price action and persistent institutional demand. You’ll notice in the following charts that while the Nasdaq remains below its all-time high set in December, strong stocks have easily moved higher since then, with the best performers like GEV and IBIT reaching new all-time highs this week. These are precisely the kinds of names we want to focus on in an early-stage bull market.
In short: this isn’t a market that’s breaking — it’s a market that’s building. As a result, we continue to keep adding more exposure to the strongest market themes.
This week’s volatility can easily trigger numerous stop-losses and cause frustration to build as the market digests gains in a normal pause. I discussed the often overlooked concept: the importance of throttling how quickly you build exposure in these moments in this week’s YouTube video on the Risk of Stop Losses — watch it here:
👉https://www.youtube.com/watch?v=9fLmQJbji4g
“Don’t be thrown off by the swarm of gloom and doomers. In the long run, they have seldom made anyone any money or provided any real happiness. I have also never met a successful pessimist.” – William J. O’Neil