Last week we essentially saw the stock market pause and then turn up. Things looked a little dicey on the close Tuesday as the S&P 500 fell towards support, but those technical analysis levels held, and that is what it took to bring buyers in Friday after the first tariff war shots began between Trump and China.

So now the stock market is likely to rally this month into earnings.

If we look at the chart we see what happened.

The S&P 500 began last week in an oversold condition with its daily stochastics below 20 and the index itself sitting on its 150-day moving average.

The fact that it did not fail enabled the buyers to take over on Friday.

But the DOW is now lagging badly.

The DOW stocks though have been lagging since January.

One thing important to note is that most world markets are actually in a bear market now as they are trading below their 150 and 200-day moving averages in a stage four decline.

A lot of these markets have been falling hard for the past month, but many of them actually turned up on Friday too.

For instance take a look at FXI, which is an ETF for China stocks.

FXI went up a little on Friday.

The emerging markets ETF EEM made a more important move though.

The EEM ETF actually moved up enough on Friday to make its oversold daily stochastics cross back above 20.

It’s likely to bounce for at least a week here.

So tariffs woes are likely to take a back seat for now.

In fact, it looks like the Asian markets fell into Friday’s tariff news and so could have a small relief bounce.

The Nasdaq powered up on Friday with the help of big moves in the FANG stocks and biotech.

Once again the money is going into the two dozen big cap tech leaders inside the Nasdaq 100.

FB, for instance, made a new high on Friday.

AMZN looks like it is in a position to break out of a very short-term one week pause to follow FB to a new high.

And take a look at NFLX.

NFLX is already starting to do this with a juicy 2.47% gain on Friday.

NFLX is actually the top performing stock inside the Nasdaq year to date.

So once again it is the fad FANG stocks that are positioned to lead the market up going into this July’s coming earnings reports.

Of course, buying these stocks today means chasing the action and it’s easier said to do than to make money in them jumping in and out.

Luckily there are thousands of stocks to pick from so you can choose to use only the trading setups that you want to use.