EB Weekly Market Report - Monday, May 11, 2026

Tom Bowley - May 11, 2026

ChartLists/Spreadsheets

The following ChartLists/Spreadsheets were updated either late yesterday or earlier this morning and have been updated on our website:

Strong Earnings (SECL)
Strong Future Earnings (SFECL)
Raised Guidance (RGCL)
Strong AD (SADCL)
Bullish Trifecta (BTCL)
Leading Stocks (LSCL)
Matt's Hot Stocks (HTCL)
Upcoming Earnings
Upcoming Earnings Relative Strength

The above ChartLists and spreadsheet have been updated through Friday, May 8th. You can view and/or download these ChartLists from our website, and also read about them to gain a better understanding of how they can help in your trading success.

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

One month ago, we were in the depths of a Q1 correction. Now we're sailing along in all-time record-high territory. But can you even distinguish between the two on this Big Picture chart? Not really. That's the real beauty, as a long-term investor, simply ignoring all the day-to-day noise on CNBC. The war? The Fed? Inflation? Earnings? Politics? Honestly, none of it really matters.

Follow the charts and the money. Then just relax.

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

Keep in mind that the intraday analysis provided is a "work in progress". I continue to analyze this data to see if it helps provide us clues about calling market direction. It makes common sense to me that it should help in some sense, but it'll require a much longer-term study to determine its worth.

It was another crazy week of bullish rotation into the NASDAQ 100, relative to the S&P 500. We DO NOT see this type of behavior prior to a significant decline. At least that's not what I've seen after years of researching the U.S. stock market. I guess anything is possible, but I wouldn't bet against the market going higher still.

IWM:QQQ

The IWM is not keeping up with the NASDAQ 100, but what is? Unless you're in a semiconductor ETF, you're generally underperforming the NASDAQ 100. This is a market being driven higher by rampant growth in the very aggressive semiconductor space.

XLY:XLP

The XLY vs XLP ratio is down from where it was back in mid-April, so I understandably get questions from members, asking if this is a warning sign about the current market. I would say to just be careful about taking every literal movement in the XLY:XLP ratio and trying to call the market. First of all, while it's a very important SECONDARY signal to me, it is just one signal. When we have a major market top at hand, we will see lots of warning signs. We will not see the QQQ:SPY ratio soaring, for instance. It's a big mistake to try to look at one secondary signal and try to make market calls.

It's also important to understand that significant market tops do not occur every two months. After a major top in a calendar year, I'd be very careful about trying to call another major top within that year. Normally, I would expect to go 3-4 years between significant tops in a secular bull market advance. But my good buddy, Fed Chief Jay Powell, has rewritten the record books as far as presiding over cyclical bear markets and corrections. The Fed's back-and-forth, yo-yo type policy has added to volatility, in my opinion. Feel free to disagree, many do. I just know the level of misguided info coming from the Fed over the past several years has been unprecedented - again, in my opinion.

Using an analogy, I think the Fed has simply added speed bumps (cyclical bear markets) to this secular bull market advance.

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.

It was very odd, but the most recent low in the 5-day CPCE did not provide any sort of short-term top. We almost always see at least a 2%-3% drop when this 5-day moving average reached the .47-.48 level. Not this time, though. We're about to approach this .47-.48 level again. Will this signal work any better this time, if we do reach that level of complacency?

253-day SMA ($CPCE)

This longer-term 253-day SMA of the CPCE is our "ocean-liner" signal, unlike our short-term speedboat indicator. Any significant change in direction in this 253-day CPCE, in the past, has had profound effects on the S&P 500.

I'll just state what I said last week.

"The rolling over of this 253-day CPCE is a potential indication that the S&P 500 will simply ride the top of its channel higher throughout 2026. Should the Volatility Index ($VIX) drop further down into the 15-16 range, or lower, that would be another indication of the S&P 500 riding that channel higher."

Long-Term Trade Setups

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. I try to review the long-term picture once a month, and I reviewed all of the following stocks as of last Monday, May 4th:

JPM – has consolidated with the entire banking industry, still looks solid
BA – 275 remains the long-term obstacle, now trending above 20-month EMA
FFIV – trending up above its 20-month EMA
MA – last week's high pierced 20-week EMA, but was false breakout
GS – very extended, remains strong relative to its investment services peers
FDX – set new all-time high, but AMZN just announced competing service
AAPL –strengthening on weekly chart, needs to clear 288.35
CHRW – pulling back and consolidating after doubling in 6 months
JBHT –nice breakout in 2026 after 3-4 years of consolidation
STX - simply amazing run since April 2025 low, seems no end in sight
HSY - very disappointing failure to hold onto 200 price support
DIS - been waiting on this one for awhile, needs to hold 77-80 support
MSCI - 4+ years of consolidation continues after prior rapid ascent
SBUX - short-term breakout near 100, now staring at major 115 resistance
KRE – still looks great in the long-term, awaiting lower interest rates
ED – retesting recent breakout near the 110 level; 17-year uptrend intact
AJG - year-long downtrend remains in place, watch 194.41 price support
NSC – cup with handle breakout in mid-2025, measurement to 360 or so
RHI – support in 22-23 range now established and needs to hold
ADM – remains in solid uptrend off April 2025 low
BG – breakout in January 2026 has led to further gains, nice uptrend
CVS – big rally off 20-month EMA support, key resistance near 95
HRL - weak stock, but it is a dividend aristocrat (raising dividends for 25 yrs+)
DE – trending up, but continues to significantly underperform CAT
LULU - will the bleeding stop at the 2020 pandemic low of 128.84?
TTD - software is rebounding, but TTD's relative strength remains weak
META - big gap lower last week with earnings, gap support is 606
ADBE - bouncing with software rebound, key initial resistance at 259
KMB - another dividend aristocrat, with solid price support at 95
ORCL - added most recently and it's soared, leading April software rebound
ABBV - added last week after a recent 20% decline to its 20-month EMA
MCD - see below.

Recent weakness in McDonalds (MCD) shares provides an opportunity for lower entry for long-term investors. MCD has a very steady long-term chart and rarely tests its rising 50-month SMA, but that's where we are right now. With a steady increase in its dividend and its recent price weakness, MCD's dividend yield is up to 2.64%, a historically high yield for MCD. In my opinion, this is a great entry for any investor looking for both long-term growth and a solid dividend yield. Here's the current chart:

Dividend increases have accelerated the past few years and note also that the RSI in the 40-50 range has historically represented a great time to enter MCD. That's where we are now.

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 own due diligence and please consult with your financial advisor before making any purchases or sales of securities.

Looking Ahead

Upcoming Earnings

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: SPG ($65 billion), CRCL ($28 billion)
Tuesday: SE ($54 billion), JD ($43 billion)
Wednesday: CSCO ($364 billion), BABA ($338 billion), NBIS ($47 billion)
Thursday: AMAT ($326 billion)
Friday: None

Key Economic Reports

Monday: April existing home sales
Tuesday: April CPI
Wednesday: April PPI
Thursday: Initial jobless claims, April retail sales, March business inventories
Friday: May empire state manufacturing, April industrial production & capacity utilization

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. The percentage for each calendar day represents the annualized return for that day. An example of how this is calculated is reflected next to the first day under the S&P 500 and in parenthesis:
S&P 500 (since 1950)

May 11: -50.36% (Ex: cumulative gains = -10.35% over 52 trading days since 1950. -10.35% x 253/52 = -50.36%)
May 12: +33.97%
May 13: -3.93%
May 14: -16.65%
May 15: +16.19%
May 16: +13.32%
May 17: -17.89%
May 18: -13.84%
May 19: -24.84%
May 20: -13.54%
May 21: -17.00%
May 22: +7.87%
May 23: -42.73%
May 24: -5.11%

NASDAQ (since 1971)

May 11: -19.11%
May 12: +60.47%
May 13: -3.74%
May 14: +22.26%
May 15: +41.32%
May 16: +51.21%
May 17: -36.53%
May 18: -9.09%
May 19: -40.95%
May 20: -15.72%
May 21: +8.14%
May 22: +33.58%
May 23: -61.46%
May 24: +16.31%

Russell 2000 (since 1987)

May 11: -50.24%
May 12: +0.45%
May 13: -77.11%
May 14: +20.69%
May 15: +37.87%
May 16: +13.08%
May 17: -22.47%
May 18: +82.33%
May 19: -39.72%
May 20: -27.33%
May 21: +79.76%
May 22: -12.32%
May 23: -46.30%
May 24: -10.50%

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

Well, this is what a secular bull market looks and feels like. It just doesn't let up. Overbought conditions simply don't matter. The daily RSI on the S&P 500 and NASDAQ 100 right now is at 75.47 and 82.97, respectively. The NDX saw its RSI move above 70 on April 15th, the day it broke out to a new all-time high. Do you realize that the NDX has gained another 11-12% AFTER becoming overbought? And it's closed higher 12 of 18 days since. When it has pulled back, it's been fractional.

The lesson here? Do NOT bet against secular bull markets. Here's what I'm thinking about in the week ahead:

Earnings. Earnings will slow down dramatically this week, but we will still get a few key reports, like Cisco Systems, Inc. (CSCO) and Applied Materials (AMAT) later in the week. Next week, we'll get the latest from NVIDIA Corp (NVDA), the largest market cap company in the world, though Alphabet (GOOGL) is rapidly gaining.

Negative Divergences. The two indices that show negative divergences, the Dow Jones and Russell 2000, are the two indices struggling currently on a relative basis. The S&P 500 and NASDAQ 100 keep moving higher with a rising PPO, so there is no momentum issue there at all - at least not yet.

Seasonality. Technology (XLK), specifically semiconductors ($DJUSSC), love the month of May. So far, it's easy to see why. The group just hasn't let up. I was very surprised, however, to find that the strength in semis over the past 6 weeks isn't unprecedented. In fact, the gains for this advance might even be a little light! Check out this chart of the DJUSSC, highlighting a 29-day rate of change (ROC):

A couple things I noted after looking at this chart. First, there have been several larger 29-day rallies, which I found amazing. Second, note that most of these massive moves have followed periods of significant market decline - either bear markets or corrections.

Rotation. It's interesting to note that other key growth areas like internet ($DJUSNS), broadline retail ($DJUSRB), automobiles ($DJUSAU), and even software ($DJUSSW), have been showing relative strength vs. the S&P 500. These are areas to be leaning on so long as their relative strength holds up.

Happy trading!
Tom