Weekly Review - 2026-May-01
Sell in May and go away???
Last 10 years seasonality for the S&P:
Anf for the Nasdaq:
Last Week’s Comment: Friday’s shooting star candlestick, together with overbought RSI and PPO (or MACD) is not a good omen (from the technical point of view).
Level 1: Why is it happening?
Economic Data: Production: ISM PMI vs. SPX
Analysis: No changes since last week.
Outlook: Bullish
Economic Data: Production: Dallas & Philadelphia Manufacturing vs. SPX
Analysis:No changes since last week.
Outlook: Bullish
Economic Data: Consumption: Consumer Sentiment
Analysis: Slight decrease in sentiment. High gasoline prices makes nobody happy.
Outlook: Bullish
USD & Interest Rates: FED, 2yr, 10yr, and 30yr Rates
Analysis: This is really not good. Interests keep increasing. Long-term (30 year) have a psychological resistance at 5% and we are at 4.964%. Markets may embrace this narrative and drag down everything.
Outlook: Bearish
USD & Interest Rates: USD vs EEM ILF and S&P500
Analysis: USD slightly down and so ILF. A long war is not a great outlook for ILF.
Outlook: Neutral (the longer the war the higher the oil & gas disruption)
Context Investors Sentiment: Credit Spreads
Credit spreads move in tandem with the S&P, but when they diverge, that’s often an early warning signal.
Analysis: Sharp increase in Spreads. This will keep fueling the bullish momentum.
Outlook: Bullish
Level 1: Why is it happening? Summary
Economic Data (long-term): Bullish
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish
What is happening? – Level 2
Price Action: SPX – Long Trend – 20 & 10 years
Analysis: 20 years channel has been broken on the upper side, signalling an overbought market. On the 10 years channel there is still a bit of room on the upper side. Despite being in a bull move, the outlook cannot be too bullish due to this overbought conditions.
Outlook: Neutral-Bearish
Price Action: RSP – Trend – Weekly & Daily
Analysis: RSP formed a lower high. RSI left the overbought area and is starting a decline trend. Daily PPO about to form a bear cross. Downgrading the outlook from Neutral to Neutral-Bearish
Outlook: Neutral-Bearish
Breadth & Volatility: % Stocks above SMAs vs. RSP
Above 200 Daily SMA
Above 20, 50, and 200 Daily SMAs
Analysis: Remember that RSP (equal weighted index) has not reached new all time highs as the SPY (market cap. weighted). These breadth indicators show us that there is still +40% of the market below their 200D SMA line. More stocks could join the rally or few stocks are holding up the party. Yet, the Above 200D SMA signal is still bullish, even if it is just for a little bit. We remain Neutral on this outlook,
Outlook: Neutral
Breadth & Volatility: Bullish Pct. Index & McClellan Summation Index
Analysis: The number of stocks in a bullish pattern (reported by the Bullish Percent Index) is not increasing. The Summation Index is flat, which may signal a change in trend. Downgrading the outlook from Bullish to Neutral.
Outlook: Neutral
Breadth & Volatility: Ratio Low Volatility Stocks / SPY vs. SPY and RSP
Analysis: No changes since last week.
Outlook: Bullish
Breadth & Volatility: New Highs vs. SPY & RSP
Analysis: No signs of extreme new highs/lows. As we are coming from a lower level, I maintain the Bullish outlook.
Outlook: Bullish
Breadth & Volatility: VIX vs. SPY & RSP
This chart is mainly to detect market bottoms.
Analysis: The trend continues trending lower towards the 15 level.
Outlook: Bullish
Options: (Inverted) Put/Call Ratio vs. SPY
Analysis: Historically, at this levels in the P/C ratio, the market finds difficulties to advance. I’m keeping the outlook as Bearish.
Outlook: Bearish
Options: Gamma Exposure – SPX
Analysis: Positive Gamma keeps increasing to higher levels at 7,200, 7,300, and even 7,400. The Gamma tail is positive. If markets are to drop, it shall not be a significant drop as per options positioning.
Outlook: Bullish
Level 2: What is happening? Summary
Price Action: Neutral-Bearish
Breadth & Volatility: Neutral
Options: Neutral
Where is it happening? – Level 3
Bulls vs. Bears: RSP vs. RSPD (Cons. Disc. – Bulls) and RSPS (Cons. Sta. – Bears)
Analysis: Bearish signal (yellow) triggered and Bulls (green) are very weak and not getting stronger.
Outlook: Bearish
Sectors Rotation
Market & Economy Rotation
US Sectors order by ISM PMI Correlation (between parenthesis)
Growth Sectors - shall outperform when the market is bullish:
XLK: Technology (71%)
XLY: Cons. Discretionary (67%)
XLI: Industrials (66%)
XLB: Basic Materials (66%)
XLF: Financials (59%)
Value Sectors - shall outperform when the market is bearish:
XLV: Healthcare (55%)
XLC: Communications (49%)
XLE: Energy (44%)
XLU: Utilities (35%)
XLP: Cons. Staples (30%)
XLRE: Real Estate (16%)
Analysis:
With a market moving at this speed is difficult to decide in which moment of the cycle we are. We know that the economy is improving from lower levels, so we could consider it “Early Recovery”. The market, after the noise brought by the Iran war, is signalling towards a Bull Market as we shall see Technology and Industrials leading.
Sectors Bullish Percent Index
Growth Sectors:
Value Sectors:
Any sectors below their red levels are good opportunities to find great companies at good valuations or buy sector ETFs (buy cheap). Those sectors above their Green levels are candidates to be sold (sell expensive).
Buy Opportunities: None
Sell Opportunities: None
US Cap. Weighted Sectors ordered by performance (desc):
Weekly:
Daily:
Level 3: Where is it happening? Summary
Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market
All Levels Summary and Final Thoughts
Level 1 Summary - The Why
Economic Data (long-term): Bullish
USD & Interest Rates: Bearish (due to Interest Rates)
Investors Sentiment: Bullish
Level 2 Summary - The What
Price Action: Neutral-Bearish
Breadth & Volatility: Neutral
Options: Neutral
Level 3 Summary - The Where
Bulls vs. Bears: Bearish
Market & Economy Rotation: Bull Market
Level 4: Scanning for opportunities
Stock Screener
Descriptive
Index: S&P500 | Market Cap.: +Mid (+$2B) | Option/Short: Yes/Yes
Avg. Volume: >1M | Relative Vol.: Over 1 | Price: >$10
Fundamental
EPS Growth Next Year: >15%
Technical
Performance: Quarter Up | Price > 50D SMA | Price > 200D SMA
I really like: PWR and INTC
I will add them to my watchlist to enter a LEAPS once they retrace a bit.
Options Screener
I’m testing some Options Screeners.
From Insider Finance (https://www.insiderfinance.io/flow):
And we also see C in OptionStrat flow (https://optionstrat.com/flow):
Disclaimer: The content on AMAT Investing is strictly for educational and learning purposes. The author is not a licensed financial advisor and holds no formal financial education. This post does not constitute professional financial advice. All investing involves risk of loss. Always conduct your own research and consult a licensed professional before making any investment decisions.