Choppy Markets expected
Macro Report 19.05.2026
Harsh pull back in the leading stocks leads to stalling in the indices.
As Yields are breaking out through longterm resistance levels, the AI trade wobbles.
Through another lense: After an insane rally we see sharp pull backs into a rising 20EMA structure.
What happens here could decide the future of the markets for this year.
Will buyers actually defend these levels? Or will it cascade into a hefty correction?
Know where you are. Align yourself to the market.
Market Analysis
QQQ Daily Market Cycle
We saw the Exhaustion Extension and are now either basing out or going into a wedge drop.
It was only the first Extension after a deep correction in the markets, therefor we can lean towards the bullish side and cautiously expect a base to build around the 20EMA.
XLE Daily Market Cycle.
Energy stocks take the lead after a one month consolidation that shook out the buyers that only got in after the Iran war had started.
XLP Daily Market Cycle.
Staples look similar, but much smoother.
Leading Themes
Energy and the new value trade (Software) are taking the lead. Home construction, Airlines and Genomics are all sensitive to inflation pressures and are hurting as Energy an Yields rise.
Leadership Analysis
The clear Leaders since the April Low:
Monday was really painful for the leading stocks, many of them were overextended and pulled back sharply. They are still not broken, but look ugly now and are in need for some repair on the charts.
Macro Stage Analysis:
A few changes took place, the most obvious, was the dissolvement of the divergence I pointed out in the last report: TNX and DXY now are going in the same direction, while Gold got smashed.
Apparently the pressure was too much and the picture we see now is clearly pointing to an inflationary expansion… late cycle stuff.
IWM and SPHB got rerated to consolidation after a tough week.
SPY and QQQ still are in a strong uptrend driven by the AI Boom that supports the biggest and most profitable stocks, inspite off rising rates.
Opportunity:
I do not see anything right now, I just hold on to my Oil and Solar stocks.
Opportunity Update:
IGV and TAN both are still doing fairly well.
Summary:
Silver/Gold got smashed and the USD keeps rising together with a break out in Yields.
Semiconductors are in chop territory after an insane run.
Oil and Gas names are in a clean uptrend, driven by geopolitics and macro at the same time.
Copper and other (non-precious) Metals miners remain the wildcard for me.
AI Capex spend is still driving the economy, while geopolitics is making the bottleneck of energy (and some materials) even tighter.
Exciting times. “Nothing ever happens” has officially ended this year.