Please take a moment and register for our members’ only webinar, June 2026 Outlook & Update on Tuesday June 2, 2026, at 4:00 PM EDT here:

 

https://attendee.gotowebinar.com/register/1031882222589454431       

 

Please join us for an Almanac Investor Member’s Only discussion of recent market action with time for Q & A at the end. Jeff and Chris will cover their outlook for June 2026, review the Tactical Seasonal Switching Strategy ETF, Sector Rotation ETF, and Stock Portfolio holdings and trades. We will also share assessments of the Iran war, economy, the Fed, inflation, geopolitical events, gold, copper, energy, and relevant updates to seasonals now in play.

 

If you are unable to attend the live event, please still register. Within a day of completion, we will send out an email with links to access the recording and the slides to everyone that registers.

 

After registering, you will receive a confirmation email containing information about joining the webinar and a reminder message.

 

 

5/21/2026: Dow 50285.66 | S&P 7445.72 | NASDAQ 26293.10 | Russell 2K 2843.45 | NYSE 23127.69 | Value Line Arith 13187.33

 

Seasonal: Bearish. Although June is the final month of NASDAQ’s “Best Eight Months,” it is the worst month in midterm election years for DJIA, S&P 500, and NASDAQ. Average midterm June losses range from –1.9% from DJIA and NASDAQ to –2.1% by S&P 500. End of quarter portfolio restructuring can weigh on June’s performance, but any late-month weakness also tends to set up NASDAQ’s Midyear Rally. This 12-trading-day run has been up 32 of the past 41 years with an average historical gain of 2.5%.

 

Fundamental: Murky. According to the Atlanta Fed’s GDPNow model, Q2 GDP estimates are on the rise and stand at 4.3% as of its update today. Corporate earnings and estimates have been broadly positive and bullish. Unemployment remains low and weekly initial jobless claims are still subdued. But the Iran War is still unresolved, crude oil is still around $100 per barrel, inflation is accelerating, tech sector layoffs appear to be picking up and the 10- and 30-year Treasury bond yields are rising.

 

Technical: Consolidating. After numerous new all-time highs, S&P 500 and NASDAQ have taken a breather. DJIA did close at a new all-time high today, but it is just its first since February 10. Absent across-the-board new highs, consolidation is likely as long as headlines allow. Some key support levels to watch during this pause are DJIA around 48,750, S&P 500 around 7,150 and NASDAQ just under 25,000. Those are near their respective late-April pauses. A meaningful break below could reopen an eventual path back down toward the early-April gap. 

 

Monetary: 3.50 – 3.75%. New Fed chairman Kevin Warsh will have been on the job for a month when the Fed next meets on June 16 & 17. With inflation accelerating and the CME Group’s FedWatch Tool now pricing in interest rate hikes, Mr Warsh will likely be hard pressed to maintain a neutral or easing monetary policy outlook. Despite concerns that “the market always tests new Fed chairs,” our research found new Fed chairs were not so bearish after all.

 

Sentiment: Neutral. According to Investor’s Intelligence Advisors Sentiment survey Bullish advisors stand at 48.1%. Correction advisors are at 30.8% and Bearish advisors were 21.1% as of their May 20 release. These are the exact same levels as their April 22 release. Bullish sentiment did pick up as the indexes were hitting new highs but quickly cooled when they paused. Overall sentiment levels suggest the market could continue climbing but the pace is likely to be much slower as traders and investors adjust their expectations following the brisk rally from the March lows.

 

We are pleased to inform you that proofs of the 2027 Stock Trader's Almanac — our 60th Anniversary Edition — are in final review. Six decades of cataloguing how habitual human and institutional calendar behavior drive markets. Please remember the new edition will be out early again this year in September just after Labor Day. More on the anniversary edition as we move toward release. Now as we head into Memorial Day Weekend let’s examine the current market environment, what’s changed, what remains the same and how we expect the market action to pan out over the remainder of the year.

 

Our Best Six Months Seasonal MACD Sell Signal triggered Monday, May 18 on DJIA and S&P 500. SPY, DIA and IYT (Dow Transports) were closed out of the ETF portfolios at May 19 average prices. QQQ and IWM remain on Hold. NASDAQ’s “Best Eight Months” doesn’t end until June and the earliest the NASDAQ MACD Sell can trigger is June 1. SHV and SGOV were added as our preferred low-risk/low-reward vehicles for the “Worst Months” cash position. 

 

The Sell Signal puts DJIA and S&P 500 officially into the Worst Six Months (May–October) and marks the start of tactical adjustments, not a wholesale exit. NASDAQ is set to enter its Worst Four (July–October) once the Best Eight MACD Sell triggers. The calendar gets worse from here before it gets better. Between now and when NASDAQ’s Seasonal MACD Sell triggers, we gradually shift toward a more neutral stance.

 

Our bullish 2026 forecast has not changed. Base case remains 8-12% full-year gains. We don’t expect any major selloff. However, with the war in Iran dragging on, energy prices look likely to remain stubbornly high, which is translating into higher inflation and higher Treasury yields. So, we wouldn’t be surprised to see more volatility through the summer months – potentially with S&P 500 retreating to fill the April ceasefire gap in the 6600-6700 zone.

 

 

June ranks no better than eleventh in midterm years since 1950. It is the worst June for DJIA, S&P 500, NASDAQ, and Russell 1000 in midterm years, with average losses ranging from 1.8% on Russell 1000 to 2.1% on S&P 500 and Russell 2000. All five indexes have declined more times than they have risen in midterm year Junes. Combined with the 4-Year Cycle Weak Spot in midterm Q2–Q3, the seasonal backdrop is the most consistently negative window of the four-year cycle.

 

Memorial Day is the unofficial kick off to summer. Folks tend to begin gravitating away from the markets with kids home from college, graduations, and early vacations. This generates the propensity for choppy mixed trading in the week before and after Memorial Day. It is also worth noting that the World Cup occurs in June and July and is being hosted here in the US this time. This is a sizable global distraction during an already weak seasonal stretch.

 

Midterm politicking is ramping right on cue as several hotly contested primaries for House seats in battleground districts have been in the headlines. President Trump has already been engaging in these races. As a student of history, he is well-aware how the president’s party usually loses seats in the midterms – with the razor thin margins Republicans currently hold in Congress, this midterm election is especially important. This is what creates the 4-Year Cycle Weak Spot during Q2-Q3 of the midterm year. 

 

Glancing at the updated chart of the S&P 500 Midterm Election Year Seasonal Patterns it is not hard to envision this near vertical market rally off the March low suffering from a little mean reversion and marking time, bouncing around from correction to rally and gaining little ground from now through Q3 or early Q4. Lest we forget October’s notorious penchant for trouble and midterm bottoms – AKA Octoberphobia.

 

 

 

In addition to our MACD Best Six Months Seasonal Sell Signal, market breadth has begun to weaken even as DJIA finally logged its first new all-time high today since February. While the major averages have all logged new highs in May now – and it’s been an impressive run since late March – the rally appears to be stalling. The tape has begun to lose momentum as internals deteriorate. 

 

The unfilled April ceasefire gap for S&P 500 that sits in the 6,600–6,700 zone is about a 10-12% retracement from the May 14 high at 7501.24. In a perfect world, the S&P fills that gap sometime in August or September. That kind of move would not be inconsistent with the broader trend, would not invalidate our bullish base case thesis for 2026, and would set up a textbook launching pad for the sweet spot of the 4-year cycle and a prototypical pre-election year bull run in 2027.

 

 

The shift in the interest rate picture is a concern. The 10-year is back above 4.5% and has floated near the May 2025 and January 2025 highs around 4.7%. The 30-year touched 5.2% Tuesday, a 19-year high, while oil prices hover around $100 and inflation, currently above 3.5%, trends higher. The CME FedWatch tool has now flipped its bias: December 2026 carries roughly 60% probability of a rate hike; while there is essentially zero probability of a cut anywhere in the tool presently. This is a meaningful shift from where the curve sat just weeks ago.

 

The 5% level on the 10-year would be a concern. If the 10-year takes out the January 2025 highs and grinds toward 5%, mortgage rates could rise back up toward 8%. If the housing market is already complaining at 6%, what happens at 8%? 

 

Last time rates hit these levels was October 2023. Stocks had already taken a 10-12% correction from July to October. Rates backed off, the market rallied — only interrupted by the April 2025 tariff tumble and the March 2026 Iran War correction. The market has absorbed higher yields for much of the advance. We’re watching if it can continue to absorb them if rates stay this elevated or move higher.

 

 

 

The ETF portfolios have shifted. DIA, SPY and IYT were sold on the MACD Seasonal Sell Signal May 18. XLP, XLV, IYW, IBB, XBI, and XLU are the Worst Months defensive positions, based on those sectors’ historical tendency to outperform the S&P 500 from May through October. IYW, QQQ and IWM are likely to track NASDAQ and its Best Eight Months that run through June — hold the tech and small cap exposure. XLP, XLU and XLV are the lower-volatility defensive choices. 

 

While the seasonal sell has triggered our repositioning to a more neutral posture, we are still holding the tech, small-cap and defensive worst six months positions. We don't think the market is due for a big hit — but stubborn energy, stickier inflation, a Fed Watch tool now pricing in hikes, and the worst June of the four-year cycle argue for more volatility through the summer. Chop through the Worst Six and Worst Four, gap fill in late summer in the 6,600–6,700 zone, then set up for the Q4 sweet spot and 2027. Base case 8–12% full-year gains remain on track. And DJIA at new highs provides plenty of room to reposition for the usual seasonal summer weakness.

 

(Disclosure note: Officers of Hirsch Holdings Inc hold positions in DBA, EFAV, EFV, IBB, IDV, IWM, QQQ, UNG, XBI, XLE, XLP and XLU in personal accounts.)

 

 

DJIA’s strong positive momentum from its late-March low has faded (1) with the arrival of historically tepid midterm-year May. As of DJIA’s close today, it has gained 11.3% from its March 27 closing low but is only up 1.28% this May with about half of that gain being generated today. DJIA has remained firmly above its 50- and 200-day moving averages since mid-April and the 50-day moving average is now rising.

 

Fading DJIA momentum has been confirmed by both the faster and slower moving MACD indicators (2) turning negative. DJIA’s MACD Sell 12-26-9 indicator first briefly turned negative on May 5 and has remained negative since May 8. The same MACD Sell 12-26-9 indicator applied to S&P 500 turned negative earlier this week on May 18. As a result, the criteria to issue our Seasonal MACD Sell for DJIA and S&P 500 were satisfied and action has been taken in the Tactical Seasonal Switching Strategy ETF Portfolio.

 

 

As DJIA’s rise began to cool, it issued back-to-back Down Friday/Down Monday (DF/DM) warnings (3) (page 78 STA 2026). Historically, DF/DM occurrences have frequently been important market inflection points. Thus far, DJIA has largely shrugged off these two DF/DMs by quickly recovering its losses and breaking out to a new all-time closing high. The concern is, S&P 500 and NASDAQ are not at all-time closing highs, and this divergence could also be an early warning sign.

 

Since the beginning of April, S&P 500 (4) and NASDAQ (5) have enjoyed lengthy, weekly winning streaks. NASDAQ’s streak ended at six after a fractional –0.1% weekly decline last week. S&P 500’s weekly winning streak is at seven and on its way to an eighth straight as its approaches the last day trading day of the week with a gain. The last time S&P 500 was up eight or more weeks in a row was in November and December of 2023 when it ran nine straight weeks.

 

The cooling of market gains has been accompanied by a corresponding deterioration in weekly market breadth data. Last week (ending May 15, 2026) NYSE Weekly Decliners (6) reached the highest level since March when the Iran War was not in a ceasefire. Weekly New Highs dropped to similarly low levels. Until breadth data favors weekly advancers, the market is not likely to make any meaningful move higher.

 

There has also been a notable pickup in the number of New 52-week Lows over the past few weeks (7). After hitting a low of 56 in April, New 52-week Lows have ballooned to 214. New 52-week Highs have also retreated. When combined with anemic weekly breadth data, the market’s rally does appear to have run out of gas, at least here in the near-term. For the major indices to return to all-time highs, additional New 52-week Highs are likely needed.

 

With crude oil prices hovering around $100 per barrel, inflation expectations have continued to rise, pushing long-dated Treasury bond yields higher. The 30-year Treasury bond yield (8) exceeded 5% last week and is at its highest level since July 2007. Thus far, the market’s response to higher interest rates has been subdued. However, if the trend in rates persists, there is likely a level that could inflict more meaningful harm on the market. Although not included in the table, the 10-year Treasury bond yield reaching and/or exceeding 5% would likely draw the market’s attention. 

 

 

As of today’s close, slower moving MACD indicators applied to both DJIA and S&P 500 are negative (arrows in the charts below point to a crossover or negative histogram). We are issuing our Best Six Months MACD Seasonal Sell signal for DJIA and S&P 500. NASDAQ’s “Best Eight Months” lasts until June.

 

 

 

SELL SPDR DJIA (DIA) and SPDR S&P 500 (SPY) positions. For tracking purposes these positions will be closed out of the portfolio using their respective average prices on May 19. 

 

Continue to HOLD Invesco QQQ (QQQ) and iShares Russell 2000 (IWM) as NASDAQ’s “Best Eight Months” does not end until June.

 

For this “Worst Months” period we have presented some low-fee ETFs where cash from the positions that are being closed out can be used ranging from relatively low-risk/low-reward to higher-risk/potentially higher reward. Please, consider your individual risk tolerance and investment objectives when choosing.

 

Consider establishing a position in iShares Short Treasury Bond (SHV) with a Buy Limit of $110.30. 

 

Consider establishing a position in iShares 0-3 Month Treasury Bond (SGOV) with a Buy Limit of $100.60.

 

Although we would consider SHV and SGOV to be low-risk/low-reward options given their relatively stable prices, they have respectable yields. With longer-dated Treasury bond yields creeping higher (prices going down) due to rising inflation expectations brought on by higher energy costs, our preferred funds are SHV and SGOV at this time.

 

For tracking purposes, SHV and SGOV will be added to the portfolio on May 19, using their respective average prices.

 

Vanguard Total Bond Market (BND), iShares Core US Aggregate Bond (AGG), and iShares 20+ Year Treasury Bond (TLT) were all added to the portfolio on May 4, when they all dipped below their respective buy limits. BND, AGG, and TLT are on Hold.

 

Lastly, positions in cash and/or money market funds can also be considered. Choices yielding 3.5% are available. An allocation to cash or a money market fund will likely be the least nerve-racking position should market volatility spike during the “Worst Months.”

 

Traders/investors following the Best 6 + 4-Year Cycle switching strategy detailed on page 64 of the Stock Trader’s Almanac 2026 should heed this Seasonal Sell signal. Even if you are not actively trading the “Best Months” switching strategy, it is still a good reminder to review existing holdings and consider a cautious stance.

 

 

 

Sell iShares DJ Transports (IYT) as its correlating seasonality has historically ended in the beginning of May. For tracking purposes IYT will be closed out of the portfolio using its average price on May 19.

 

SPDR Healthcare (XLV) and iShares US Technology (IYW) can still be considered on dips below their respective buy limits.

 

SPDR Consumer Staples (XLP), iShares Biotechnology (IBB), and SPDR Biotech (XBI) have been added to the portfolio and can be considered on dips or at current prices up to their respective buy limits.

 

SPDR Utilities (XLU) can still be considered at current prices up to its buy limit.

 

XLU, XLP, XLV, IYW, IBB, and XBI are “Worst Months” defensive trades based upon their corresponding sectors’ historical tendency to outperform the S&P 500 from May through October.

 

All other holdings in the Sector Rotation Portfolio are on Hold.

 

 

Today’s Seasonal MACD Sell Signal for DJIA and S&P 500 marks the beginning of the “Worst Six Months” for DJIA and S&P 500. We do not simply sell and go away. Instead, today’s trades are the start of tactical adjustments that will be made in the portfolios. Between now and when NASDAQ’s Seasonal MACD Sell Signal triggers (earliest it can trigger is on June 1 this year), the portfolios will be shifted toward a neutral stance. Positions that have historically performed well during the “Worst Months” will be held along with positions that correlate to NASDAQ and Russell 2000. 

 

All current stock and ETF holdings will be reevaluated in upcoming email Alerts. Weak or underperforming positions may be closed out, stop losses may be raised, new buying may be limited, and we will evaluate the timing of adding additional positions in sectors that perform well in the “Worst Six Months” and potentially a new basket of defensive stocks.

 

 

 

As of today’s close, S&P 500’s MACD indicator is positive while DJIA’s MACD indicator is not. In order for the Seasonal MACD Sell signal to trigger, both S&P 500 and DJIA MACD indicators must agree and be negative. Continue to hold long positions associated with DJIA’s and S&P 500’s “Best Six Months.” We will issue the Seasonal MACD Sell signal when corresponding MACD Sell indicators applied to DJIA and S&P 500 have both crossed over and issue a sell signal. 

 

Based upon today’s closing prices, S&P 500 would need to decline 179.62 points (–2.39%) in a single day to turn its MACD indicator negative while DJIA would need to be up less than 31.53 points (+0.06%) tomorrow for its MACD indicator to stay negative. 

 

You can track MACD using your preferred charting platform. Our Seasonal MACD Sell indicator is calculated using daily closing prices with a short exponential moving average (ema) of 12, a long ema of 26 and a 9-period ema for the signal line. This is frequently written as 12-26-9 or in the accompanying charts as 12, 26, 9.

 

 

 

Over the last 55 years June has favored NASDAQ ranking sixth best with a 1.1% average gain, up 32 of 55 years (since 1971). This contributes to NASDAQ’s “Best Eight Months” which ends in June. However, June ranks near the bottom on the Dow Jones Industrials just above September since 1950 with an average loss of 0.1%. S&P 500 performs similarly poorly, ranking ninth, but with a 0.2% average gain. Small caps have tended to fare better in June. Russell 2000 has averaged 0.9% in the month since 1979, advancing 63.8% of the time. During the bear market in 2022, Russell 1000 and 2000 suffered their worst June losses ever, dropping 8.5% and 8.4% respectively. S&P 500 and NASDAQ also declined by over 8% that year.

 

Over the last twenty-one years, the month of June has been a rather lackluster month for the market. DJIA has recorded a modest average loss in the month. S&P 500 and Russell 1000 have been essentially flat, averaging +0.2% each. NASDAQ and Russell 2000 have fared better, logging average gains of 0.8% and 0.7% respectively. 

 

Historically the month has opened respectably, advancing on the first and second trading days. From there the market has tended to drift sideways and lower near or into negative territory just ahead of mid-month. From there the market has rallied to create a mid-month bump that generally has quickly evaporated and returned to losses. The post, mid-month drop is typically followed by a modest month-end rally led by technology and small caps. 

 

In midterm years since 1950, June ranks no better than eleventh. June is the worst DJIA, S&P 500, NASDAQ, and Russell 1000 month in midterm years. Average losses range from 1.8% by Russell 1000 to 2.1% from S&P 500 and Russell 2000. All five indexes have declined more times than they have risen in midterm year Junes.

 

 

The second Triple Witching Week of the year brings on some volatile trading with losses frequently exceeding gains. On Monday of Triple-Witching Week, DJIA has been down 15 of the last 29 years but has improved recently with gains in 6 of the last 8. Triple-Witching Friday (or the last trading day of the week) has been the opposite of Monday, DJIA has been up 19 of the last 36 years, but down 8 of the last 11. Full-week performance is choppy, littered with greater than 1% moves in both directions. The week after June’s Triple-Witching Day is horrendous. This week has experienced DJIA losses in 29 of the last 36 years with an average weekly decline of 0.7% since 1990. NASDAQ and Russell 2000 had fared better during the week after, but that trend appears to be fading.

 

June’s first trading day is the DJIA’s second best day of the month, up 29 of the last 38 years while June’s second trading day has been the best, up 25 times in the last 38 years. Gains are sparse throughout the remainder of the month until the last three days when NASDAQ and Russell 2000 stocks begin to exhibit strength. The last day of the second quarter was a bit of a paradox as the Dow was down 17 of 24 from 1991 through 2014 while NASDAQ and Russell 2000 had nearly the opposite record. Since 2015, all indexes have had a bullish bias on the last trading day while DJIA and S&P 500 have been up 9 of the last 11.

 

 

 

Even though it has been a week since S&P 500 finished April with an impressive 10.42%, there is still an ongoing discussion about the abrupt reversal and what to expect in the near term. Take the gains and “sell in May” or will this strength continue? First let’s put some context around this year’s April S&P 500 gain. It was the fourth best April for S&P 500 since 1930. The closest comparable April in recent years was in 2020 when S&P 500 jumped 12.7%. Prior to that, the last time S&P 500 climbed double digits in April was way back in 1938 (+14.1%). The best April ever…+42.2% in 1933.

 

For our research today, a “big” April is defined as a gain of at least three times April’s average (mean) monthly performance since 1950. This works out to be a 4.67% gain when April 2026 is included. Since 1950, there have been 15 other years when S&P 500 gained 4.67% or more. When compared to the other 61 years, big April gains were broadly bullish for May, the remainder of the year, and the full year with average performance essentially double “All Other Years.” Performance in May saw the biggest improvement jumping to a 2.12% gain following Big Aprils versus a –0.07% decline in “All Other Years.” Frequency of gains (% Higher) also improved across the board.

 

There was also a modest improvement in the Max Drawdown that occurred during May to December. Following Big Aprils, the subsequent drawdown tended to begin around the same time but ended earlier and resulted in lower Median drawdown. The worst years that had Big Aprils were 2001 (2nd year of tech bubble and 9/11) and 2008 (financial crisis). In both of those years the bulk of the damage was during the “Worst Six Months.” 

 

 

For those of us that enjoy a quick graphic, we have plotted the 15 Big April years in the following S&P 500 Seasonal Pattern chart. We have included the 6th Year of Presidency, Trump Presidency Years, and 2026 as of today’s close for comparison. All three patterns end the year at approximately the same level, around 12-15%, pushing the upper range of our Base case 2026 forecast. Along the way, we still cannot rule out the possibility of some volatility due to the Iran conflict, high crude oil price, tepid seasonal factors, and midterm elections. 

 

 

 

As of today’s close, MACD indicators applied to DJIA and S&P 500 are positive. S&P 500 would need to decline 173.01 points (–2.36%) in a single day to turn its MACD indicator negative while DJIA needs to gain at least 54.13 points (+0.11%) tomorrow for its MACD indicator to remain positive. Continue to hold long positions associated with DJIA’s and S&P 500’s “Best Six Months.” We will issue the Seasonal MACD Sell signal when corresponding MACD Sell indicators applied to DJIA and S&P 500 both crossover and issue a new sell signal.

 

We have been reminding everyone that a key criterion to issue our Seasonal MACD Sell signal for DJIA and S&P 500 is that both their MACD indicators must agree. Earlier this week was an example of DJIA’s MACD indicator briefly turning negative, but S&P 500 MACD remained positive. As a result, there was no signal issued on Tuesday, May 5. Both MACD indicators must be negative when the market closes.

 

You can track MACD using your preferred charting platform. Our Seasonal MACD Sell indicator is calculated using daily closing prices with a short exponential moving average (ema) of 12, a long ema of 26 and a 9-period ema for the signal line. This is frequently written as 12-26-9 or in the accompanying charts as 12, 26, 9.

 

 

 

Over the past four weeks, through the close on May 6, the Almanac Investor Stock Portfolio advanced 2.1%, excluding dividends and any potential interest generated by the cash position, versus an 8.6% increase by S&P 500 and a 13.4% jump by Russell 2000 over the same time. Based upon average percent, Small-caps performed the best, up 20.7%. Mid-caps were second best, climbing 5.1% while Large-caps added 1.7%. 

 

Small-cap positions were lifted by respectable gains from HealWell AI (HWAIF) and Ezcorp (EZPW). HWAIF climbed over 16% while EZPW advanced nearly 20%. HWAIF reported quarterly results today and will be hosting an earnings call Friday morning. Results are on track, but the majority of the growth in revenue is still coming from its Orion Health acquisition. We would like to hear more about the company’s AI division and any new contracts that may be in their pipeline. HWAIF is on Hold.

 

EZPW also reported earnings this week on May 6. The early response to the overwhelmingly positive announcement pushed shares of EZPW over $37, but broad small-cap weakness and likely some profit taking quickly reversed the early positive momentum. Shares ultimately finished the day modestly lower. EZPW is on Hold.

 

Phibro Animal Health (PAHC) was crushed today, down over 26%, and closed below its stop loss. Earnings were not bad and management actually raised guidance modestly. Regulatory concerns in their Brazilian market were apparently a key catalyst for the sell off. Rather than risk the remaining gain on the position, we will close it out on Friday, May 8, using its average price. Sell PAHC.

 

OSI Systems (OSIS) has been closed out of the portfolio after being stopped out on May 5. Earnings failed to impress despite modestly exceeding consensus estimates. Digging deeper into their results revealed soft growth from their largest division, Security and somewhat missed results from other segments. Since OSIS had previously doubled and we had sold half the original position then, the overall gain on OSIS was 80.8%.

 

After jumping to nearly $220 in February, Ensign Group (ENSG) has been trending lower. Today it closed below its stop loss. Sell ENSG. For tracking purposes it will be closed out of the portfolio using its average price on Friday, May 8.

 

All seven utility stocks (shaded in gray in the table below) can still be considered at current levels or on dips. Performance has been mixed thus far as higher 10-year, and 30-year Treasury bond yields appear to be putting pressure on the broader sector. Should crude oil’s price begin to trend lower, inflation expectations, and Treasury bond yields are likely to follow, easing the rate issue. Energy demand is likely to remain firm as AI data center build-out continues. 

 

All positions in the portfolio are on Hold. Please note some stop losses have been updated to account for recent gains.

 

 

 

If you were unable to attend this Wednesday’s member’s only webinar, May 2026 Outlook & Update, the slides and video recording are available here (or copy and paste in a new browser window: https://www.stocktradersalmanac.com/LandingPages/webinar-archive.aspx). Jeff kicked off the presentation with a quick overview of the upcoming 60th anniversary edition of the Stock Trader’s Almanac for 2027 and the opportunity to lock in a lifetime membership. There are some spots still available or if you’re on the fence there are also 10-year memberships remaining.

 

From there Jeff jumped back into the major trends, patterns, and indicators we have been tracking and updating since the start of the Iran war. As we had anticipated, the market quickly rebounding to new all-time highs, and has effectively negated any comparison between 2026 and 2022 or 1966. In 2022 and in 1966, war was in the headlines, but the market just continued to trend lower. The Trump presidency cycle, although limited in the number of years, is proving to be on the mark this year with the market tracing out a late March low followed by a strong rebound. This has likely pulled some typical midterm year seasonal weakness forward.

 

Inflation metrics have accelerated with the rise in energy costs, confirmed earlier today by the jump in the Fed’s preferred inflation gauge, PCE (personal consumption and expenditures index) to 3.5% year-over-year while Q1 U.S. GDP was softer than estimated at 2.0%, but still an improvement over the prior quarter. The labor market also appears to be holding up well with seasonally adjusted weekly initial jobless claims falling to the lowest level in decades. 

 

We suspect that as long as crude oil remains essentially range bound and a path to a resolution and/or end to the Iran war appears possible, the market is likely to continue to march higher. We cannot rule out the possibility of some additional volatility and chop during the remainder of Q2 and in Q3 this year, but the market appears to be on track with our Base Case Forecast of 8-12% gains for the full year.

 

 

As of today’s close, MACD indicators applied to DJIA and S&P 500 remain positive. DJIA would need to drop 979.07 points (–1.97%) in a single day to turn its MACD indicator negative while S&P 500 would need to decline 212.95 points (–2.95%) to turn its MACD indicator negative. Continue to hold long positions associated with DJIA’s and S&P 500’s “Best Six Months.” We will issue the Seasonal MACD Sell signal when corresponding MACD Sell indicators applied to DJIA and S&P 500 both crossover and issue a new sell signal.

 

 

 

In the following table, the performance of the S&P 500, NASDAQ, and Russell 2000 during the “Worst Six Months” May to October is compared to fourteen select sector indices or sub-indices, gold, Bitcoin, and the 30-year Treasury bond. Nine of the fourteen indices chosen are S&P Sector indices. Gold and 30-year bond are continuously-linked, non-adjusted front-month futures contracts. Except for two indices (Natural Gas & Biotech) and Bitcoin, 1990-2025, a full 36 years of data was selected. This selection represents a reasonably balanced number of bull and bear years for each and a long enough timeframe to be statistically significant while still representing current trends. To make an apples-to-apples comparison, dividends are not included in this study.

 

 

Using the S&P 500 as the baseline by which all others were compared, five indices and Bitcoin outperformed during the “Worst Six Months” while eleven others, gold and the 30-year Treasury bond underperformed based upon “AVG %” return. Bitcoin’s 50.5% average return during the May-October period is an eye-popping figure but it is based upon just 15 years of data, and its price was under $5 in May 2011 compared to over $75,000 today. If we start with data in 2018, the first full year after Bitcoin futures began trading, its average May to October gain is 13.4% with six positive periods and two negatives. Interestingly, three out of four negative periods were also midterm election years (2014, 2018 & 2022).

 

Next on the list are Biotech and Information Technology with average gains of 7.53% and 6.63% during the “Worst Months.” Before jumping into Biotech positions, consider that only 31 years of data was available and, in those years, Biotech was up just 58.1% of the time from May through October. Some years, like 2014, gains were massive while in down years losses were frequently nearly as large.

 

In third place, Information Technology with 36 years of data and a 72.2% success rate is possibly a less risky choice than Biotech. Its 6.63% average performance comes by way of three fewer losses in five additional years of data. However, five of the ten losses were double digit. The worst loss was 30.88% in 2008. Other double-digit losses were in 1990 and 2000-2002. After declining in 2012, Information Technology has been positive in 12 of the last 13 “Worst Six Months” periods and was up nearly 46% last year. Holding existing tech-related positions with a trailing stop loss is an option to consider.

 

Other “Worst Six” top performers consisted mostly of the usual suspects when defensive sectors are considered. Healthcare and Consumer Staples have bested the S&P 500. Not surprisingly NASDAQ has also performed well, advancing 75.0% of the time with an average gain of 5.82%. NASDAQ’s Best Eight Months include May and June, so it does have an advantage. Although not the best sector by AVG %, Consumer Staples advancing 75.0% of the time is the closest thing to a sure bet for a gain during the “Worst Months.” However, should interest rates rise, Consumer Staples is susceptible to declines. Utilities also merit attention with a 75.0% win rate, matching NASDAQ and Consumer Staples.

 

At the other end of the performance spectrum, we have the sectors to consider shorting or to avoid altogether. The S&P 500 Materials sector was the worst over the past 36 years, shedding an average 1.55% during the “Worst Six.” PHLX Gold/Silver was fourth worst by average percent. However, based solely upon the percentage of time up, the stocks only, PHLX Gold/Silver index is the most consistent loser of the “Worst Six Months” advancing just 41.7% of the time. Aside from solid gains in 2012, 2019, 2020, 2024, and 2025, PHLX Gold/Silver has declined in nine of the last thirteen “Worst Six Months.” NYSE ARCA Natural Gas is the only other sector to record a loss, off 0.43%.

 

Also interesting to note is every sector, gold, 30-year bonds, and Bitcoin are all positive in May, on average. It’s not until June that things have begun to unravel for many sectors of the market and the market itself. July tends to see a broad bounce, but it has been short-lived as August and September tend to be downright ugly on average. It is this window of poor performance that has usually given October a lift in the past 36 years. Only Biotech, 30-year bonds and gold (futures and gold & silver stocks) manage to post gains in both August and September.

 

Based upon “% Up,” Consumer Staples and Utilities are the top sectors of the “Worst Six Months” while Gold/Silver mining stocks are the worst. Historically speaking, May looks like a great time to consider rebalancing a portfolio as you will likely be closing out long positions into strength. Short trade ideas are also worth considering given June’s nearly across-the-board poor performance.

 

 

Based upon a combination of average percentage gained and frequency of gains during the “Worst Six Months,” we are going to look to add SPDR Consumer Staples (XLP), SPDR Healthcare (XLV), iShares US Technology (IYW), iShares Biotechnology (IBB) and SPDR Biotechnology (XBI) to the Sector Rotation EFT portfolio on dips below their respective buy limits. SPDR Utilities (XLU) is an existing position and can still be considered on dips.

 

 

 

 

 

 

Traders and investors with a lower risk threshold, may find XLP and XLV more suitable for “Worst Months” defense as these sectors have historically been considered defensive with lower price volatility. Their dividends are also an additional bonus worth consideration. IYW is likely to track NASDAQ and its “Best Eight Months” that run through June. IBB and XBI have been rather resilient this year when compared to other sectors.

 

 

With the exception of today’s new trade ideas and SPDR Utilities (XLU), all other positions in the Sector Rotation Portfolio are on Hold.

 

SPDR Energy (XLE) is in the top performing position, up 34.0% as of its close on April 29. XLE nearly reached its auto-sell price in late-March when Iran war anxiety peaked. After an initial round of profit taking, XLE is on the rise again. Crude oil price has lingered around $100 per barrel, and the summer driving season is quickly approaching. Historically this combination has been bullish for XLE.

 

United States Natural Gas (UNG) continues to disappoint. The U.S. has more than ample domestic supply available and inventories remain plentiful. UNG did rebound nearly 4.5% today after testing its early January lows. In the near-term, UNG is likely to continue to bounce around until cooling season demand (electrical generation) could give it a boost. Longer-term, the Iran war may finally spur investment in expanding export capacity. 

 

 

 

As of yesterday’s close, the Tactical Seasonal Switching Strategy portfolio had an average gain of 7.7% excluding dividends and fees. iShares Russell 2000 (IWM) the top performing position, up 10.9%. SPDR DJIA (DIA) was up 4.8% while SPDR S&P 500 (SPY) and Invesco QQQ (QQQ) were up 6.2% and 9.1% respectively. All are on Hold. 

 

When the Seasonal MACD Signal for DJIA and S&P 500 triggers we will consider moving into some combination of bond ETFs and cash.