Equity Clock

Stock Market Outlook for May 20, 2026

Defensive leadership emerging, aligning with seasonal norms.

*** 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:

Urban Edge Properties (NYSE:UE) Seasonal Chart

Optimal holding period from May 20th to September 6th The stock recently broke above a cup-and-handle pattern with the move above resistance at $21; the setup proposes an upside target of $25.  Stop loss appropriate at the 20-week moving average (20.58) Despite the headwinds that are growing for REITs amidst the rising cost of borrowing, this typically more defensive segment of the market that flourishes at this time of year has shown a certain level of resilience. So long as this resilience persists (as the technicals suggest), exposure to this name and the broader REIT sector can be deemed appropriate.

Tesla Inc. (NASD:TSLA) Seasonal Chart

MicroSectors Gold Miners -3X Inverse Leveraged ETN (AMEX:GDXD) 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

Pressures from the cost of borrowing amidst the high price of energy commodity weighed on equity markets during the Tuesday session.   The S&P 500 Index closed down by two-thirds of one percent, closing below the lower limit of the short-term rising trend channel that has been carved out in the past couple of weeks.  A short-term point of horizontal support at 7340 is being contended with, a break of which 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 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 were positioning last week for a more volatile/risk-off market framework for the back half of May, seeking to lower our sensitivity to the market fluctuations now that benchmarks had become stretched to a significant (unsustainable) degree.  The conflict in Iran remains a wildcard and some of the cues that we have been following that would warrant moving towards a more defensive posture in risk assets continue to trigger.  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:

• Market shifting defensive
• Canada Consumer Price Index (CPI)
• Rising trend of yields and shift of trajectory in the bond market
• Canadian Bonds
• Canadian Dollar
• Other Notes from our weekly chart books review
• Our list of all segments of the market to either Accumulate or Avoid

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Sentiment on Tuesday, as gauged by the put-call ratio, ended bullish at 0.83.

Seasonal charts of companies reporting earnings today:

S&P 500 Index

TSE Composite

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