PEAK PERFORMANCE WEEKLY
Earnings, great Semis great but Breadth,not so much— The Friday Wrap
Time to take some cash off the table. Here is why
(don’t get confused, I don’t believe the market is going to crash tomorrow, institutions are
hedging for the downside, I saw in the Vix twice last week with futures pointing to higher open.
Gas prices, higher yields, hot inflation, lower gold prices, a stronger dollar and midterm
elections equal uncertainty. Institutions hate uncertainty. I raised cash.
This Week at a Glance
THE BOTTOM LINE
Q1 2026 was the best earnings quarter in over four years. With 91% of the S&P 500 reported,
blended Y/Y EPS growth is running at 27.7% — the highest reading since Q4 2021 — and net
profit margins set a fresh all-time record at 14.7%.
The Philadelphia Semiconductor Index (SOX) finished the week showing the first real cracks of
a major top. Trading 32% above its 50-day moving average — among the widest premiums in
history — the index plunged 3.7% on Friday alone (down 6.8% at the session low) with
deteriorating breadth, falling volume on rallies, and a strong-sell signal across every intraday
timeframe.
The S&P 500 closed Friday at 7,408.50 after printing six fresh all-time highs in eleven sessions,
capped by an intraday peak above 7,500. But under the surface, only roughly 40% of S&P
constituents traded above their 20-day average at Thursday’s record, and Friday’s session was a
near-universal distribution day with the Russell 2000 down 2.1% — its worst day in six months.
Section 1 — Q1 2026 S&P 500 Earnings Scorecard
Source data timestamp: FactSet Earnings Insight, May 15, 2026.
With 91% of the S&P 500 having reported Q1 2026 results, the scorecard is the strongest in over
four years. 84% of companies beat consensus EPS estimates — the highest beat rate
since Q2 2021 — versus the five-year average of 78% and the ten-year average of 76%. 80%
beat revenue estimates against a five-year average of 70%. The aggregate EPS surprise came
in at +17.9% with an aggregate revenue surprise of +1.8%.
The blended Y/Y earnings growth rate (a mix of reported and estimated results) is 27.7%
— the highest reading since Q4 2021’s 32.0%, and the sixth consecutive quarter of double-digit
growth. Blended Y/Y revenue growth is 11.4%, the highest since Q2 2022’s 13.9%. Net profit
margin for the index landed at a record 14.7% — the highest reading since FactSet began
tracking the data in 2009.
Top-Line Scorecard
| Companies reported | 455 of 500 (91%) |
| Companies beating EPS estimates | 84% (5-yr avg 78%, 10-yr avg 76%) |
| Companies beating revenue estimates | 80% (5-yr avg 70%) |
| Aggregate EPS surprise | +17.9% |
| Aggregate revenue surprise | +1.8% |
| Blended Y/Y earnings growth | +27.7% (highest since Q4 2021) |
| Blended Y/Y revenue growth | +11.4% (highest since Q2 2022) |
| Net profit margin | 14.7% — RECORD (since 2009) |
| Sectors with positive Y/Y earnings growth | 10 of 11 (Health Care only negative) |
Metric Q1 2026 Result
Sector-by-Sector Y/Y Earnings Growth
| Information Technology | +51.0% | NVDA, MU largest contributors. Excluding these two: +28.8%. |
| Communication Services | +48.9% | GOOGL ($5.11 vs $2.68), META ($10.44 vs $6.67). Excluding these: −4.3%. |
| Materials | +42.5% | Metals & Mining sub-industry growing +136%. |
| Consumer Discretionary | +39.8% | AMZN ($2.78 vs $1.63), Ford ($0.66 vs $0.18). Ex-AMZN: 14.9%. |
| Financials | +21.7% | JPM, Allstate, Citigroup, BAC, Morgan Stanley led. |
| Industrials | +20.3% | GE Vernova standout ($17.44 vs $1.95 expected). |
| Real Estate | +12.4% | Data center & cell tower REITs leading. |
| Utilities | +8.6% | AI/data-center power demand thesis intact. |
| Consumer Staples | +4.2% | Volume pressure offset by pricing power. |
| Energy | +0.6% | Collapsed from +8.2% pre-season estimate. Phillips 66 ($0.49 vs −$0.54) a bright spot. |
| Health Care | −3.1% | Only sector with negative Y/Y growth. Abbott, Boston Scientific guided down. |
Sector Y/Y Growth Key Drivers
Standout Beats
• Alphabet (GOOGL): Q1 EPS of $5.11 vs $2.68 estimate — beat of 91%.
• Netflix (NFLX): $1.23 vs $0.76 estimate.
• Meta Platforms (META): $10.44 vs $6.67 estimate.
• Amazon (AMZN): $2.78 vs $1.63 estimate.
• NVIDIA (NVDA): $1.75 vs $0.81 estimate.
• Micron (MU): $12.20 vs $1.56 estimate — over 7x consensus.
• Ford (F): $0.66 vs $0.18 estimate.
• GE Vernova (GEV): $17.44 vs $1.95 estimate.
• Phillips 66 (PSX): $0.49 vs ($0.54) estimate.
Forward Guidance — Higher vs Lower
Forward guidance is where the cracks are showing. For Q2 2026, 80 S&P 500 companies have
issued EPS guidance: 42 positive, 38 negative. The negative share (48%) is below the five-year
average of 58% — a positive read. For full-year 2026/27, 267 companies have issued annual
EPS guidance: 154 positive, 113 negative. The 42% negative share is also below historical norms.
What stands out is the language on earnings calls. 211 of S&P 500 companies cited
“Middle East” in their Q1 commentary — the highest count in over a decade. The Iran-related
fuel and travel cost spike is the single biggest reason 13 companies cut their FY 2026 EPS
outlook.
Companies That Lowered FY 2026 Guidance — Middle East / Iran-Related
Company New Guidance Stated Reason
Companies That Lowered FY 2026 Guidance — Other Reasons
Company New Guidance Stated Reason
Valuation & Forward Outlook
• Forward 12-month P/E: 21.4 — above the 5-year average of 19.9 and the 10-year average
of 18.9.
• Trailing 12-month P/E: 28.3.
• Bottom-up 12-month index target: 8,598.87 (+14.6% upside from Friday’s 7,408.50
close, +14.6% above 7,501.24 prior ATH).
• Analyst ratings on S&P 500 stocks: 59.0% Buy / 35.8% Hold / 5.2% Sell.
• Forward earnings growth estimates: Q2 +20.5%, Q3 +23.6%, Q4 +21.1%, full-year 2026 +21.5%.
• Negative EPS surprises this season were punished −4.6% on average (vs 5-year average
of −2.9%) — the market is rewarding beats and punishing misses harder than normal.
Section 2 — Is the SOX Topping? A Full Forensic
Source data timestamp: Schwab Market Update, May 15, 2026; MarketWatch / Yahoo Finance, May 15,
2026; Investing.com technical readings, May 15, 2026 close.
Short answer: yes, the SOX shows multiple textbook early-stage topping signals — but it has not
yet given the clean technical break that would confirm a primary trend change. Friday May 15
was the warning shot. Here is the full case.
Where the SOX Closed Friday
Metric Reading
Why I Believe the SOX Is in the Early Stages of Topping
1. Extreme Distance From Trend
The SOX is sitting roughly 32% above its 50-day moving average (50-day around 9,119).
That kind of premium is exceedingly rare. In the modern era, the only times the SOX has
stretched 30%+ above its 50-day were the late-1999 / early-2000 dot-com top, parts of the 2009
reflation rally, and brief 2020-2021 stimulus blow-offs. Each of those resolved through either a
sharp mean-reversion correction (15-25%) or a multi-month grind sideways. None resolved
bullishly.
MarketWatch’s headline this week said it plainly: the last time semiconductor stocks rose
this far this quickly, the dot-com bubble burst.
2. Volume Divergence on the Rally
The SOXX ETF has been making fresh highs on declining volume over the last two weeks.
Rising prices on falling volume is a classic distribution signature — the buyers are getting
weaker even as price prints new highs. The institutional money that drove the move from the
April lows is no longer in the bid stack; what’s holding prices up is momentum and
short-covering.
3. Technical Sell Signals Across Intraday Timeframes
From Investing.com’s technical summary as of Friday close:
Timeframe Signal Implication
Reading the tape: every intraday and daily timeframe has flipped to Strong Sell while
weekly and monthly still hold up. That is exactly the sequence you see at the start of a primary
top — short-term sells appear weeks before the higher timeframes confirm.
4. Friday’s Individual-Stock Breakdown
The losses Friday were concentrated, accelerating, and broad inside the semis complex:
• Intel (INTC): −6.0%
• AMD: −5.7%
• Micron (MU): −6.6%
• NVIDIA (NVDA): −4.4%
• Cerebras (CBRS) — IPO’d May 14, surged 68% — gave back 10% Friday
This is not single-stock weakness — it is the entire complex moving as one. When the
dispersion collapses on a down day, you are watching a thematic unwind, not company-specific
news.
5. Macro & Rates Pressure
Macro Variable Friday Close
Long-duration assets — and the SOX is one of the longest-duration trades on the planet because
the cash flows from AI capex are years out — get crushed when long rates rise. The 30-year
above 5.11% is poison for semi multiples. Add in oil over $100 stoking the inflation
re-acceleration narrative, and a Fed that one month ago was expected to cut and is now 45%
likely to hike, and you have the macro backdrop that tops the SOX.
6. Sentiment & Smart-Money Warnings
• BofA’s Michael Hartnett: semiconductors are now trading like the Mississippi Bubble — one of his sharpest warnings of this cycle.
• BTIG’s Jonathan Krinsky: calling for a significant pullback ahead, with the SOX cited as the most stretched index.
• Cerebras IPO: +68% Day 1 on May 14, −10% Day 2. Classic blow-off retail behavior at tops.
• Total chip market cap added: roughly $3 trillion in twelve months — the most
overextended valuation expansion in the sub-sector in decades.
7. The NVDA Catalyst Risk
NVIDIA reports Q1 earnings Wednesday May 20. At 32% above the 50-day with sentiment
vertical, the asymmetric setup into this print is unfavorable. A modest beat-and-raise gets sold
(“priced in”). A modest miss or in-line guide gets liquidated. Only an absolute monster print,
well above already-elevated whisper numbers, sustains the move. Expected outcomes are
skewed sharply to the downside.
Section 3 — S&P 500 Day-by-Day: May 1 – May 15, 2026
Source data timestamp: CNBC Markets Daily Wrap, Zacks Market Recap, Schwab Market Update,
Yahoo Finance — all retrieved May 15-16, 2026.
The eleven trading days from May 1 through May 15 delivered six fresh all-time closing
highs on the S&P 500 (May 1, May 5, May 6, May 8, May 11, May 13, May 14), culminating with
Thursday’s record close at 7,501.24 — the first-ever finish above 7,500. Friday May 15 then
delivered the week’s loudest warning: a broad-tape distribution day that saw the S&P drop
1.24%, the Nasdaq drop 1.54%, the Dow lose 537 points, and the Russell 2000 fall 2.10% — its
worst day in six months.
The big-picture story under the surface is breadth deterioration. On Wednesday May
13, the S&P closed at a fresh record 7,444.25 — and only roughly 40.8% of S&P 500
constituents were trading above their 20-day moving average. By Friday’s close, market
technician Helene Meisler at TheStreet Pro was flagging that roughly half of S&P stocks were
now under their 50-day moving average — even with the index itself still well above all major
moving averages. That is the textbook setup of mega-cap-led rallies that mask
underlying weakness.
Day-by-Day Master Table
All advance/decline ratios are NYSE composite unless noted. VIX changes are intraday vs prior close.
Date Close %
Chg NYSE A/D Nasdaq
A/D Vol. (B) New Hi/Lo VIX Se
c↑
★ = Fresh all-time closing high. A/D = Advances vs Declines ratio. Sec↑ = Number of S&P 500 sectors closing
higher (of 11). Volume in billions of shares (composite).
Day-by-Day Narrative Detail
Friday, May 1, 2026 — S&P 7,230.12 (+0.29%, record)
The S&P kicked off May with a sixth straight winning week and a fresh all-time closing high.
NYSE advance/decline ran 1.18:1 in favor of advancers; the Nasdaq A/D was much stronger at
1.69:1. Composite volume came in at 15.27 billion shares. NYSE produced 578 new 52-week
highs versus only 63 new lows, and the S&P 500 itself had 45 stocks hit new highs against 13
new lows. The VIX closed at 16.99. Only 3 of 11 S&P sectors finished green, however — the gain
was concentrated in Tech and Communication Services. First subtle breadth divergence of the
month.
Monday, May 4, 2026 — S&P 7,200.75 (−0.40%)
Broad-tape decline. The S&P 500 dropped 2.2-to-1 by issue. The VIX surged 7.65% to 18.29.
Only Energy finished higher (+0.9%) on rising crude. Eight of eleven sectors closed lower by
more than 0.5%. The Dow lost roughly 0.5%, the Nasdaq about 0.7%. A textbook one-day
risk-off session — but volume was unremarkable, suggesting no real institutional distribution
yet.
Tuesday, May 5, 2026 — S&P 7,259.22 (+0.81%, record)
Strong bounce on broad participation. The S&P A/D ratio ran 1.7:1 advances. Ten of eleven
sectors closed higher — only Utilities lagged. Composite volume picked up to 16.10 billion. S&P
500 new highs vs new lows came in at 43 vs 23. The VIX dropped 4.98% back to 17.38. A clean,
healthy up day with broad participation — the kind of session that confirms an uptrend.
Wednesday, May 6, 2026 — S&P 7,365.12 (+1.46%, record)
The strongest single-session gain of the period. The S&P A/D was 1.7:1 advances; the Nasdaq
was 1.6:1. Nine of eleven sectors closed higher led by Tech and Consumer Discretionary.
Composite volume jumped to 18.80 billion shares — the heaviest reading of the week. S&P new
highs/lows of 46/21 and Nasdaq 186/92. A high-volume thrust that confirmed the May uptrend.
Thursday, May 7, 2026 — S&P 7,337.11 (−0.38%)
Pullback day. A/D ratio flipped to 1.8:1 declines. Only 2 of 11 sectors closed higher. The VIX
actually dropped 1.78% to 17.08 — telling you the selling was technical and rotational, not
panicked. A normal digestion day after the prior session’s thrust.
Friday, May 8, 2026 — S&P 7,398.93 (+0.84%, record)
Hot jobs print sparked early volatility but the index closed at a new record. A/D was broadly
positive. The week ended +2.34% from the prior Friday’s close, with four record closes in five
sessions. Energy outperformed on oil; defensives lagged.
Monday, May 11, 2026 — S&P 7,412.84 (+0.19%, record)
Here is where breadth started to crack. The S&P closed at a fresh record — but the NYSE A/D
ratio was 1.08:1 DECLINES, and the Nasdaq A/D was 1.27:1 declines. The index rose despite
more stocks falling than rising. Volume surged to 21.40 billion shares — the heaviest of the
period. The VIX rose 6.9% to 18.38. Energy was the standout (+2.6%) on the oil spike;
Communication Services led the downside (XLC −2.3%). This is the signature of a
mega-cap-led rally hiding real underlying selling.
Tuesday, May 12, 2026 — S&P 7,400.96 (−0.16%)
Hot CPI print rattled the tape briefly but the index recovered. NYSE A/D ratio was 1.79:1
declines; Nasdaq A/D 1.95:1 declines. The VIX eased 2.1%. The breadth deterioration that
started Monday persisted — internals remained weaker than the headline.
Wednesday, May 13, 2026 — S&P 7,444.25 (+0.59%, record)
Apple intraday tagged $300 for the first time. The S&P closed at a fresh record — and again,
breadth was lousy. NYSE A/D 1.21:1 declines; Nasdaq A/D 1.08:1 declines; S&P 500 new highs
vs new lows came in NEGATIVE at 27/44. That’s a very rare and worrying configuration:
index at record, breadth negative, more new lows than new highs. Mega-cap-led to a fault.
Thursday, May 14, 2026 — S&P 7,501.24 (+0.77%, record — first
close above 7,500)
The Dow reclaimed 50,000 — closing at 49,526.17 the prior session and finishing in record
territory Thursday with 18 of 30 components advancing. The S&P broke 7,500 for the first time
on a 1.6:1 advance/decline. The VIX fell 3.4% to 17.26. A genuinely strong day from the tape
standpoint — but it was day two of an FOMC week and the early signs of stretched conditions
were everywhere underneath.
Friday, May 15, 2026 — S&P 7,408.50 (−1.24%) — DISTRIBUTION
DAY
The defining session of the period. S&P 500 dropped 1.24%, Nasdaq fell 1.54%, the Dow lost 537
points (−1.07%), and the Russell 2000 dropped 2.10% — its worst day in six months. Only 1 of 11
S&P sectors closed higher (Energy +1.6% on oil). The VIX exploded 10.89% to 18.00 — by far the
largest single-day fear spike of the eleven-session period. The Magnificent 7 ETF (MAGS) fell
1.4% to $69.88. Friday brought together every warning signal that had been building all week:
stretched valuations, breadth deterioration, hot inflation data, surging long rates, oil spike, and
the SOX rolling over. This was institutional selling, not retail puking.
Breadth & Moving Average Internals Across the Period
• S&P 500 stocks above 20-day MA at Wed May 13 record (7,444.25): 40.8%. Index at
all-time high; less than half of constituents above their 20-day. Classic mega-cap mask.
• S&P 500 stocks above 50-day MA at Fri May 15 close: approximately 50% (per Helene
Meisler / TheStreet Pro). Half the index now under its 50-day even as the index itself
remains well above its 20/50/100/200-day MAs.
• Index-level moving average status (S&P 500): above 20-, 50-, 100-, and 200-day.
The trend on the index has not broken.
• Days with negative A/D ratio despite a record close: May 11 and May 13 — two of the
four record closes in the second week were on negative breadth.
• S&P 500 weekly performance: Week 1 (May 4-8) +2.34%; Week 2 (May 11-15) +0.13%.
Momentum decay clearly visible in the weekly numbers.
New Highs vs New Lows — Where We Have It
NYSE New HiP 500 Ne
Note the trajectory: S&P 500 new highs went from 45-vs-13 on May 1 to 27-vs-44 on
May 13 — flipping negative on a record-close day. That is one of the cleanest “narrowing
leadership” signals in technical analysis. The few mega-caps making new highs are masking
growing weakness in the average stock.
WHAT WEEK ONE LOOKED LIKE vs WEEK TWO
Closing Note.
This is the most binary tape I have traded in a long time. The earnings data is the best of the
entire post-2021 expansion. The technicals are the most stretched I have seen in any major
index since the dot-com top. The macro is hostile. And the market is making new all-time highs.
Those four facts cannot stay in the same room forever. Something resolves. My job — and yours,
as a subscriber — is to be ready for either outcome without being married to either outcome.
Watch NVDA’s print Wednesday May 20. Watch the SOX 50-day at ~9,119. Watch the 30-year
yield — if it stays above 5.10%, the long-duration trade keeps bleeding. And watch the
percentage of S&P stocks above their 50-day MA — when that number rolls under 40%, you
have a confirmed bear breadth signal regardless of what the index is doing.
Stay patient. Stay sized. Stay alive. Pigs get fat HOGS GET SLAUGHTERED!
“Don’t dream what you want to do. Do what you dream.
Living is about memories, not dreams. And there’s always room for another good memory.”
Our Trade Desk Disclaimer
This newsletter is published by Our Trade Desk for informational and educational purposes only. It is not investment
advice, an offer to sell, or a solicitation to buy any security. Johnny A. is not a registered investment advisor. Past
performance is not indicative of future results. All investments carry risk, including the risk of total loss. The author
may hold positions in the securities discussed; positions can change at any time without notice. Readers should
perform their own due diligence and consult with a qualified financial professional before making any investment
decision. Data sourced from FactSet Earnings Insight (May 15, 2026), CNBC Markets, Zacks Market Recap, Schwab
Market Update, MarketWatch, Yahoo Finance, Investing.com, and the Federal Reserve Economic Database. Data
current as of market close Friday, May 15, 2026.