EB Daily Market Report - Friday, May 8, 2026

Dear Members.

The market continues to rise, with both the S&P and NASDAQ hitting fresh all-time highs.

While blue chip stocks are currently lagging, traders cannot get enough of the large cap tech stocks. In fact, in what can only be described as stunning moves, Intel has tripled in just over a month. Sandisk has doubled in a month. Micron and AMD are both up 40% this week alone. Yet traders don't seem fazed one bit with the $VIX back in the 16's earlier in the session.

The extreme moves we are seeing in such a short period could be seen as irrational but the market is embracing AI wholeheartedly, believing profitability due to greater efficiencies will continue to grow.

The jobs report jumped more than expected but the consumer confidence report hit a record low in May. So while the market continues to climb to record levels consumers are feeling the pinch of higher prices.

Of all the major indexes the NASDAQ is now the most overbought with its RSI sitting right at 80. Historically, this level has led to selling. Will history repeat itself or will traders continue to pile into tech stocks, ignoring signs that the recent move higher might be a bit much? At a minimum it might be a good time to wait for better entry points, especially on those stocks that have risen so much so quickly. It might even make sense to consider trimming some after such hefty gains. And one other thing to consider: monthly options expire next Friday and it's highly likely that when we run our Max Pain report this weekend it will show a disproportionate ratio of calls to puts—way more bets on the long side than the short side.

I think we all recognize that individual stocks and the market as a whole can remain overbought for extended periods of time. This could be one of those times. But it doesn't hurt to keep an open mind just in case there's a sudden shift in sentiment. So let's see where things stand by day's end and revisit when Tom provides his Weekly Market Report on Monday.

At your service,

John Hopkins