May 2025

Spring Special - It's Not Too Late!

Our Spring Special ran its course yesterday, but we've decided to extend it another 48 hours! Therefore, you have until Wednesday at midnight ET to take advantage of our 20% off sale. For more information, CLICK HERE!

ChartLists/Spreadsheets Updated

The following ChartLists/Spreadsheets were updated over the weekend:

• Strong Earnings (SECL)
• Strong Future Earnings (SFECL)
• Raised Guidance (RGCL)**
• Bullish Trifecta (BTCL)
• Manipulation Spreadsheet
• Upcoming Earnings & Upcoming Earnings Relative Strength

** I made a recent change on the RGCL. If you look at the list of companies on it, you'll see that stocks like MTZ show an asterisk before and after its ticker symbol. These companies all raised guidance for both revenues and EPS in the upcoming quarter, as well as raised guidance for both revenues and EPS in the coming year. Many companies are included on the RGCL for simply raising revenue guidance or EPS in an upcoming quarter OR year. To raise guidance for both revenues and EPS in both the upcoming quarter and upcoming year shows more confidence in their business strategy, in my opinion. I'm not endorsing these stocks as "better" or anything like that. I just feel it's important to begin differentiating those companies that significantly raise guidance like that.

The ChartLists should be available to download into your StockCharts Extra or Pro account, if you have a StockCharts membership. Otherwise, we can send you an Excel file with the stocks included in these ChartLists in order to download them into other platforms.

The Manipulation Spreadsheet has been updated for our 3 primary index ETFs - SPY, QQQ, and IWM and our 12 individual stocks - AAPL, MSFT, NVDA, META, GOOGL, AMZN, TSLA, NFLX, AMD, JPM, PLTR, and CLS. I review this Excel file weekly. It is not meant to be updated and studied daily.

If you have any questions, please reach out to us at "[email protected]".

Weekly Market Recap

Major Indices

Sectors

Top 10 Industries Last Week

Bottom 10 Industries Last Week

Top 10 Stocks - S&P 500/NASDAQ 100

Bottom 10 Stocks - S&P 500/NASDAQ 100

Big Picture

The secular bull market, despite last week's weakness, remains fully intact. My only question is WHEN the S&P 500 hits a new all-time high. So many believe that doing it in 2025 is impossible, but this "impossibility" is drawing closer and closer.

Sustainability Ratios

Here's the latest look at our key intraday ratios as we follow where the money is traveling on an INTRADAY basis (ignoring gaps):

QQQ:SPY

This intraday QQQ:SPY ratio looks extremely bullish. The accumulation since the early-April low is very apparent to me. If this intraday QQQ:SPY ratio can break above 104.5, it'd send a signal that prices will likely continue to push higher into June.

IWM:QQQ

I see a potential bottoming reverse head & shoulders pattern in the bottom panel, which is the IWM's absolute chart. In order to see confirmation of the pattern, it would be best if the IWM remains above the 197-198 level to the downside, while ultimately breaking out above 210-211. The measurement on this potential breakout is roughly 248, which would be a new all-time high on the IWM, clearing the November high.

XLY:XLP

The pullbacks in our major indices and in this XLY:XLP ratio were inevitable. We were very overbought and some selling was overdue. We saw a bit of selling last week, but it was mostly due to gap downs. The intraday XLY:XLP ratio, which ignores opening gaps, barely lost ground. A move back to highs in this intraday ratio should be viewed bullishly.

Sentiment

5-day SMA ($CPCE)

Sentiment indicators are contrarian indicators. When they show extreme bullishness, we need to be a bit cautious and when they show extreme pessimism, it could be time to become much more aggressive. Major market bottoms are carved out when pessimism is at its absolute highest level.

This 5-day CPCE chart suggested a potential short-term top and that's finally what we saw after Monday's close last week. History tells us that this 5-day CPCE is a short-term signal ONLY. As far as I'm concerned, this signal worked once again, no matter what happens from here. The CPCE has moved back into neutral territory and is no longer sending us any directional clues.

253-day SMA ($CPCE)

Here's a repeat of what I said last week as this 253-day SMA of the CPCE continues to fall.

"The 253-day SMA of the CPCE has yet to find a bottom. The history of this long-term reading on the CPCE is that when it goes down, the stock market soars. It's still going down, so I believe it fully supports continuing upside in 2025. When it does eventually turn back to the upside, keep in mind it doesn't mean the market will collapse or that we'll be entering a bear market. Look at the period from 2014-2016. The CPCE was rising throughout this period, but there were lots of ups and downs and, ultimately, it turned out to be nothing more than a period of consolidation. The rise of the 253-day SMA of the CPCE tells us that there's widespread nervousness that's growing and that can coincide with either a bear market brewing or a lot of back and forth action.

We could see this 253-day SMA fall for several more months or even a year or more, while the S&P 500 gains ground to 7000, 8000, or higher and THEN see a period of consolidation where this 253-day SMA begins to curl higher and rise."

Long-Term Trade Setup

Since beginning this Weekly Market Report in September 2023, I've discussed the long-term trade candidates below that I really like. Generally, these stocks have excellent long-term track records, and many pay nice dividends that mostly grow every year. Only in specific cases (exceptions) would I consider a long-term entry into a stock that has a poor or limited long-term track record and/or pays no dividends. Below is a quick recap of how I viewed their charts a couple of weeks ago:

• JPM - April shows a successful 20-month EMA test
• BA - printed triple bottom around 120-125, now trending higher
• FFIV - solid long-term uptrend, bouncing off 20-month EMA test
• MA - another bouncing off 20-month EMA test
• GS - 20-month EMA test as well
• FDX - double top established near 300, key uptrend line support approaching near 180
• AAPL - tested 50-month SMA in April for first time since last trade war
• CHRW - successfully testing gap support, now trying to hold onto 50-month SMA
• JBHT - has broken down on multiple time frames, would look for bottom in the 110-120 area
• STX - recent low may have established Point D in an A-B-C-D-E ascending triangle
• HSY - first step to repair technical picture would be monthly close above 180
• DIS - renewed strength after quadruple bottom at 80
• MSCI - now in a wide 485-650 trading range; still consolidating following a lengthy decade-long advance
• SBUX - might be poised for another test of key price support from 65 to 70
• KRE - attempting to hold both 20-month EMA and 50-month SMA support
• ED - seeing some weakness recently, but long-term pattern has been quite bullish
• AJG - few stocks have been steadier to the upside over the past decade
• NSC - long-term cup with handle pattern?
• RHI - rough trading in 2025, massive support at 30, should it get that far
• ADM - tested long-term price support in low 40s, could be starting significant reversal back to the upside
• BG - 65-70 level remains quite significant, I expect it to hold
• CVS - significant improvement in 2025, first test of 50-month SMA resistance failing thus far
• IPG - 4-year support at 23 level tested, nice to see bounce back to 25
• HRL - support over past 2 years still holding around 27.50
• DE - strength seems to be building here

Keep in mind that our Weekly Market Reports favor those who are more interested in the long-term market picture. Therefore, the list of stocks above are stocks that we believe are safer (but nothing is ever 100% safe) to own with the long-term in mind. Nearly everything else we do at EarningsBeats.com favors short-term momentum trading, so I wanted to explain what we're doing with this list and why it's different.

Also, please keep in mind that I'm not a Registered Investment Advisor (and neither is EarningsBeats.com nor any of its employees) and am only providing (mostly) what I believe to be solid dividend-paying stocks for the long term. Companies periodically go through adjustments, new competition, restructuring, management changes, etc. that can have detrimental long-term impacts. Neither the stock price nor the dividend is ever guaranteed. I simply point out interesting stock candidates for longer-term investors. Do your due diligence and please consult with your financial advisor before making any purchases or sales of securities.

Looking Ahead

Upcoming Earnings

Very few companies will report quarterly results until mid-April. The following list of companies is NOT a list of all companies scheduled to report quarterly earnings, however, just key reports, so please be sure to check for earnings dates of any companies that you own. Any company in BOLD represents a stock in one of our portfolios and the amount in parenthesis represents the market capitalization of each company listed:

• Monday: None
• Tuesday: PDD ($166 billion), AZO ($64 billion), OKTA ($21 billion)
• Wednesday: NVDA ($3.21 trillion), CRM ($263 billion), SNPS ($77 billion), VEEV ($38 billion)
• Thursday: COST ($447 billion), DELL ($78 billion), MRVL ($52 billion), ZS ($39 billion)
• Friday: None

Key Economic Reports

• Monday: None
• Tuesday: April durable goods, March Case-Shiller home price index, March FHFA house price index, May consumer confidence
• Wednesday: FOMC minutes
• Thursday: Initial jobless claims, Q1 GDP, Q1 PCE, April pending home sales
• Friday: April personal income & spending, May Chicago PMI, May consumer sentiment

Historical Data

I'm a true stock market historian. I am absolutely PASSIONATE about studying stock market history to provide us more clues about likely stock market direction and potential sectors/industries/stocks to trade. While I don't use history as a primary indicator, I'm always very aware of it as a secondary indicator. I love it when history lines up with my technical signals, providing me with much more confidence to make particular trades.

Below you'll find the next two weeks of historical data and tendencies across the three key indices that I follow most closely:

S&P 500 (since 1950)

• May 26: +54.11%
• May 27: +57.71%
• May 28: +5.44%
• May 29: +22.50%
• May 30: +47.64%
• May 31: +31.78%
• Jun 1: +54.02%
• Jun 2: +36.90%
• Jun 3: +4.15%
• Jun 4: -1.04%
• Jun 5: +47.89%
• Jun 6: +55.43%
• Jun 7: +3.37%
• Jun 8: -18.56%

NASDAQ (since 1971)

• May 26: +106.29%
• May 27: +160.41%
• May 28: +42.58%
• May 29: -41.39%
• May 30: +32.36%
• May 31: -8.12%
• Jun 1: +73.91%
• Jun 2: +131.50%
• Jun 3: -66.10%
• Jun 4: +80.54%
• Jun 5: +107.72%
• Jun 6: -13.07%
• Jun 7: +17.61%
• Jun 8: -18.14%

Russell 2000 (since 1987)

• May 26: +170.50%
• May 27: +209.58%
• May 28: +0.99%
• May 29: +4.64%
• May 30: +46.49%
• May 31: +24.72%
• Jun 1: +113.13%
• Jun 2: +179.79%
• Jun 3: -46.59%
• Jun 4: +39.89%
• Jun 5: +88.81%
• Jun 6: -4.47%
• Jun 7: +32.75%
• Jun 8: +1.50%

The S&P 500 data dates back to 1950, while the NASDAQ and Russell 2000 information date back to 1971 and 1987, respectively.

Final Thoughts

We finally saw a bit of selling to relieve our momentum oscillators a bit. Is the selling over? Well, that's always difficult to say with a ton of confidence, because short-term rallies and selloffs can occur on a dime. As I've said many times, it's difficult to get the short-term market direction correct consistently. We have tools and signals to aid us, but they're most definitely not 100% accurate.

Here are a few things I'm thinking about this week:

• 20-Day EMAs. It's hard to deny that we've been trending higher. When secular bull market advances emerge, rising 20-day EMAs typically provide lots of support. This moving average, along with gap support zones will need to provide a bottom during any short-term selloff in order to keep losses during the pullback to a minimum.
• History. The May 26th-June 6th period has been one of the most bullish periods of the year - dating back to 1950. The annualized return on the S&P 500 has been +34.37% during this 11-day period since 1950. This doesn't guarantee higher prices ahead, but it does provide historical tailwinds.
• Leadership. If we're able to rally back near or through recent highs, what does the rotation look like? Technology (XLK) and consumer discretionary (XLY) should provide leadership on such a move.
• Inflation. The PCE component of the Q1 GDP report will be watched closely. The 2nd estimate of Q1 GDP is showing an expectation that last month's initial PCE reading (annual rate) will remain unchanged at 1.8%. The bond market still expects 2 rate cuts this year and this PCE reading - due out on Thursday morning - will provide us a clue as to whether that expectation should be changed.

Happy trading!

Tom