THE BIG IDEA
At this time last week we had visions of a dreaded abandoned baby potentially appearing on a chart of the S&P 500. And we wondered if it was even really there or just a statistical illusion.
Well, the abandoned baby did not materialize. And we all rejoiced. What we got instead was an ordinary shooting star which pretty reliably puts an end to whatever bullishness had been present.
What we have now is the S&P 500 at an all-time high. So much for a shooting star killing the uptrend.
However, all is not as it seems. Let’s look at a group of six different charts and see if “the stock market” is really going up.
These charts, clockwise from top left, are:
SPX - the official S&P 500 index that is reported everywhere
SPXEW - the same 500 stocks, but equal-weighted instead of size-weighted
INDU - the Dow Jones Industrial Average, once upon a time “the” stock market index
ARKK - the ARK Innovation ETF, full of most of the same cool stocks that people actively buy and sell
SPLV - 100 of the S&P 500 stocks with the least historical volatility
FDX - FedEx, included here because transportation stocks can give a “second opinion” about the health of the market
April 20th seemed to be an inflection point in the current market rally, so we added an orange line on each chart from the market closing price that day.
It looks to us like “the stock market” has been scuffling for a few weeks and not rampaging into new all-time highs like the newspaper headlines tell us. Whether it is trendy tech stocks or legacy industrial stocks, they all are going nowhere, fast.
How, then, is the S&P 500 able to defy gravity?
Gain/Loss Since April 20 | |
|---|---|
NVDA | + 6.5% |
AAPL | + 7.4% |
MSFT | - 0.7% |
AMZN | + 9.8% |
GOOGL | + 18.8% |
Those five stocks account for roughly 27% of the S&P 500. When they are going up like that, it is hard for the index to be going down. Some of the other 495 stocks are going up, too. Clearly, it isn’t enough seeing how those charts above are bobbing along going sideways at best.
And, no, there is not a typo in the table above. Shares of Alphabet, a.k.a. Google, have gone up almost 19% in a few weeks.
And that brings us to a final point for this week. It is stunning how many stocks have been rising and/or falling by double digit percentages in a single day. It’s mega-cap stocks and small-cap stocks. High tech, low tech, no tech.
It is the type of thing you see at turning points in the market.
SEEN ON THE INTERNETS
Last week on the StockTwits website, the founder/CEO himself posted a long-term chart of the VanEck Semiconductor ETF. Many people know it by its ticker symbol, SMH, and use it as an unofficial benchmark of the semiconductor industry.
The chart covers 25 years. Not much to see for the first two-thirds, is there? And then its blast off!
And now? There were only a few words attached to the post and those words were “feels a tad extended” and “lol”.
Nothing goes up forever. The question is when the inevitable pullback will come.
NUMBERS ONLY
7.99% | Airline stocks were up nearly 8% last week, due to a decrease in fuel costs. Most are still below where they were in February. |
8 | As of Saturday, 8 people with a connection to the cruise ship MV Hondius have reportedly contracted the Andes hantavirus. Three of them have died. |
31.33% | Datadog (DDOG), the stock The Prime Wave loves to hate, gained 31.33% on Thursday, after a positive earnings report. |
SWINGEX INDEX
As of market close on: 8 May 2026
Swingy says: Semiconductors and electrons are in fashion. Everything else is a gamble.
Learn more about how the Swingex Index works here.
WATCHER
Stocks highlighted here each week are not recommendations to buy or sell. They are provided as ideas for swing traders to follow up on with their own research.
WLK (Westlake Chemical): Trading opportunities can come in a variety of different forms. This week we will look at a reversion to the mean setup for Westlake Chemical.
It is an ugly chart, and that is the point. The company disappointed with their earnings report on May 5th. It led to four consecutive days with the shares trading below their lower Bollinger band and four consecutive days with RSI(2) in single digits.
Those are two conditions that do not usually persist for more than a few days. We figure WLK is due for some kind of a rebound.
This is not a long-term play. Whatever rebound comes may not last long. Take the money and run!