Technical Market Report For May 9, 2026

The good news is:

• The S&P 500 (SPX) and Nasdaq composite (OTC) closed at all time highs last Friday while the  Russell 2000 (R2K) closed at an all time high last Wednesday.

The Negatives

The market is overbought.

The first chart covers the past 6 months showing the SPX in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH) in green.  Dashed vertical lines have been drawn on the 1st trading day of each month.  

NY NH has failed to confirm all of the new all time highs for the past month. 

The Positives

The next chart is similar to the one above except it shows the OTC in blue, and OTC NH in green has been calculated with NASDAQ data.  

OTC NH did confirm the the index all time high last Friday.  

The next chart covers the past 6 months showing the OTC in blue and a 40% trend (4 day EMA) of NASDAQ new highs divided by new highs + new lows (OTC HL Ratio), in red.  Dashed horizontal lines have been drawn, on the Y axis, at 10% levels for the indicator; the line is solid at the 50%, neutral level (equal numbers of new highs and new lows). 

OTC HL Ratio rose, finishing the week in comfortably positive territory. 

The next chart is similar to the one above except it shows the SPX in red and NY HL ratio, in blue, has been calculated with NYSE data.

NY HL Ratio remained at a very high level.

The next chart covers the past 6 months showing the SPX in red and a 10% trend (19 day EMA) of NYSE new lows (NY NL) in blue.  NY NL has been plotted on an inverted Y axis so decreasing numbers of new lows move the indicator upward (up is good).  

NY NL remained at a very high level last week.

The next chart is similar to the one above except it shows the OTC in blue, and OTC NL, in brown, has been calculated with NASDAQ data.

OTC NL continued moving upward, finishing the week at its highest level in the past 6 months.

Seasonality

Next week includes the 5 trading days prior to the 3rd Friday of May during the 2nd year of the Presidential Cycle.  The tables below show the daily change, on a percentage basis, for that period.  
OTC data covers the period from 1963 to 2025 while SPX data runs from 1953 to 2025.  There are summaries for both the 2nd year of the Presidential Cycle and all years combined.  Prior to 1953 the market traded 6 days a week so that data has been ignored.

Seasonality for the coming week has been negative by all measures.

Report for the week before the 3rd Friday of May

The number following the year is the position in the Presidential Cycle.

Daily returns from Monday through 3rd Friday.

OTC Presidential Year 2 (PY2)

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1966-2  -1.37%  -2.19%  -1.06%   1.75%  -0.29%  -3.16%

 1970-2  -0.69%  -1.33%  -1.34%  -2.32%  -1.88%  -7.56%

 1974-2  -1.33%  -0.02%   0.42%  -0.01%  -1.88%  -2.82%

 1978-2   0.34%   0.82%   0.88%  -0.15%  -0.07%   1.81%

 1982-2  -0.70%  -0.58%  -1.02%  -0.65%  -0.18%  -3.13%

 Avg     -0.75%  -0.66%  -0.43%  -0.28%  -0.86%  -2.97%

 1986-2  -0.10%  -0.52%   0.18%  -0.69%   0.00%  -1.14%

 1990-2   0.80%   0.20%   0.10%   0.63%   0.58%   2.31%

 1994-2  -0.70%  -0.05%   1.46%   0.75%  -0.08%   1.37%

 1998-2  -0.87%   0.65%   0.32%  -0.04%  -1.00%  -0.94%

 2002-2   3.23%   4.02%   0.38%   0.28%   0.63%   8.55%

 Avg      0.47%   0.86%   0.49%   0.19%   0.03%   2.03%

 2006-2  -0.23%  -0.42%  -1.50%  -0.70%   0.62%  -2.23%

 2010-2   0.31%  -1.57%  -0.82%  -4.11%   1.14%  -5.04%

 2014-2   1.77%  -0.33%  -0.71%  -0.76%   0.52%   0.48%

 2018-2   0.11%  -0.81%   0.63%  -0.21%  -0.38%  -0.65%

 2022-2  -1.20%   2.76%  -4.73%  -0.26%  -0.30%  -3.73%

 Avg      0.15%  -0.07%  -1.42%  -1.21%   0.32%  -2.23%

OTC summary for PY2  1966 - 2022

 Avg     -0.04%   0.04%  -0.45%  -0.43%  -0.18%  -1.06%

 Win%       40%     33%     53%     27%     36%     33%

OTC summary for all years 1963 - 2025

 Avg      0.02%   0.03%  -0.03%   0.05%  -0.16%  -0.08%

 Win%       51%     46%     59%     51%     42%     49%

SPX PY2

 Year       Mon     Tue     Wed    Thur    Fri    Totals

 1954-2   0.14%   0.03%  -0.45%   0.35%   0.59%   0.66%

 1958-2  -0.57%  -0.30%  -1.15%   0.51%   0.05%  -1.46%

 1962-2   0.72%   1.89%  -0.03%  -0.53%  -0.17%   1.87%

 1966-2  -1.24%  -0.92%   1.78%  -0.12%   0.48%  -0.02%

 1970-2  -1.06%  -0.95%  -1.70%  -1.42%   1.94%  -3.20%

 1974-2  -0.89%   0.03%  -0.26%  -0.81%  -1.68%  -3.61%

 1978-2   0.70%   0.60%   0.25%  -0.98%  -0.51%   0.06%

 1982-2  -1.10%  -0.75%  -0.82%  -0.26%   0.26%  -2.67%

 Avg     -0.72%  -0.40%  -0.15%  -0.72%   0.10%  -1.89%

 1986-2  -0.11%  -0.49%   0.48%  -1.31%  -0.71%  -2.15%

 1990-2   0.78%  -0.13%  -0.08%   0.13%   0.05%   0.75%

 1994-2   0.08%   1.10%   0.96%   0.61%  -0.34%   2.41%

 1998-2  -0.14%   0.83%   0.28%  -0.13%  -0.78%   0.06%

 2002-2   1.86%   2.11%  -0.57%   0.66%   0.76%   4.82%

 Avg      0.49%   0.68%   0.21%  -0.01%  -0.20%   1.18%

 2006-2   0.00%   0.07%  -1.68%  -0.67%   0.41%  -1.88%

 2010-2   0.11%  -1.42%  -0.51%  -3.90%   1.50%  -4.22%

 2014-2   0.97%   0.04%  -0.47%  -0.94%   0.37%  -0.02%

 2018-2   0.09%  -0.68%   0.41%  -0.09%  -0.26%  -0.54%

 2022-2  -0.39%   2.02%  -4.04%  -0.58%   0.01%  -2.99%

 Avg      0.19%   0.00%  -1.26%  -1.23%   0.41%  -1.93%

SPX summary for PY2 1954 - 2022 

 Avg      0.00%   0.17%  -0.42%  -0.53%   0.11%  -0.67%

 Win%       53%     56%     33%     28%     61%     39

SPX summary for all years 1953 - 2025

 Avg     -0.01%   0.04%  -0.02%  -0.01%  -0.08%  -0.07%

 Win%       51%     51%     51%     52%     52%     48%

Conclusion

Three out of 4 of what I consider the major indices closed at all time highs last week.  The market is overbought and rising in spite of a weak seasonal pattern.

The strongest sectors last week were Precious Metals (up from the bottom for the last 2 weeks) and Electronics while the weakest were Energy and Utilities.

I expect the major averages to be lower on Friday May 15 than they were Friday May 8.

Last week's negative forecast was a miss.