Stock Market Outlook for May 21, 2026
Despite Wednesday’s drop in the cost of borrowing, the headwind that the trend of interest rates is imposing on the market has not been eliminated.
*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Stock Highlight: |
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Getty Realty Corp. Holding Co. (NYSE:GTY) Seasonal Chart |
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Simulations Plus, Inc. (NASD:SLP) Seasonal Chart
iShares North American Tech ETF (NYSE:IGM) Seasonal Chart
iShares U.S. Technology ETF (NYSE:IYW) Seasonal Chart
V2X Inc. (NYSE:VVX) Seasonal Chart
Disclaimer: Comments and opinions offered in this report are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered is believed to be accurate, but is not guaranteed.
The Markets
A sharp drop in the price of oil, along with interest rates, fuelled a rally in stocks during the Wednesday session. The S&P 500 Index closed higher by 1.08%, bouncing from short-term horizontal support at 7340. Previous trend channel support is showing initial reaction as a point of resistance, albeit nothing definitive, as of yet. A breakdown below 7340 would project a move back towards the upper limit of the end of April consolidation span around 7150. While the character of the market remains where levels of resistance hold less weight than levels of support, there are certainly fractures around the periphery as breadth in the market narrows. A daily MACD sell signal was triggered with Tuesday’s drawdown, closing a long trade with respect to this momentum indicator that began at the start of April. In the Seasonal Advantage Portfolio that we manage for clients at CastleMoore, we hit a new high watermark yesterday, even though we have prepared for and positioned for a more volatile/risk-off market framework for the back half of May. The conflict in Iran is the ongoing wildcard and some of the cues that we have been following that would warrant moving towards a more defensive posture in risk assets have triggered in recent days and weeks. Subscribers can view the themes in our chart books to either Accumulate or Avoid that we continue to gear portfolios towards.
Today, in our Market Outlook to subscribers, we discuss the following:
- Yield headwind alleviated, but not eliminated
- Energy supply and demand and how we are hedging against the risk of a supply shock
- The jump in vehicle miles travelled through the first quarter
- The setup in consumer stocks
- Margin debt jumped to the highest level on record in April
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bullish at 0.71.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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