Questioning Our Assumptions

 

5/17/2026 - The U.S. stock market has been on an historic run.  Many traders I hear about have not captured the lion's share of this rally and are frustrated.  They are looking for a way to get in when the market is stretched and the market has not let them make their comfortable entry.

Please allow me to point out a few things.  

*  Energy (oil) prices continue higher in the face of seeming Middle East progress toward peace;

*  Inflation expectations are on the rise and we're seeing higher yields at the long end of the curve;

*  European stock prices (VGK) remain well below their late February highs;

*  Europe and the Far East as a whole (EFA) remain below their late February highs;

*  Oil importing countries such as Australia (EWA) and Japan (EWJ) have not made new highs;

*  We have recently seen more U.S. stocks make fresh 52-week lows than highs.

*  Many U.S. stock sectors have not made new highs, such as raw materials (XLB); financial (XLF); consumer discretionary (XLY); healthcare (XLV); and industrials (XLI).  

*  The equal-weighted version of the SP500 (RSP) has not made new highs.

Well, you get the idea.  If and when this market corrects, everyone will look back at how obvious the top was.

It pays to question our assumptions and look beyond a broad market average to see what markets are actually doing.  A rising tide lifts all boats.  Many boats are not rising.