Bull out of nowhere?
Earnings revisions, sentiment, technicals and seasonality point to more upside ahead
Edition · May 02, 2026 · KW 18
Thank you for reading this week’s edition of Closelook@Global Stock Markets, dated May 02, 2026 👋. The next edition will be published on May 9, 2026.
For the schedule of our other publications, please check the schedule at the end.
Table of Contents
1. This Week’s Action
2. Overview: The Global Market Map
3. The State
4. The State Continued: Regions & Sectors
5. What May Lie Ahead: Macro Setup
6. What May Lie Ahead: Technical Setup
7. The ETF Portfolio: What We Did
8. The ETF Portfolio: What We Plan To Do
9. Knowledge Corner —
10. Upcoming Transactions: Be Informed
11. What May Go Wrong: Risk & Change Triggers
12. Final Words
(1) This Week’s Action
Five forces are pointing in the same direction, and they did it again this week.
Earnings revisions are still drifting upward — the opposite of the historical Q1 pattern. Retail sentiment has not turned euphoric after a 10%+ rally off the March low. Long-dated Treasuries are holding multi-year support. The Fed is priced for hold-and-done.
And global equities broke out this week, led by the semiconductor and global tech sectors. None of these five is exotic on its own. Together, they are the structural setup the bull case has been waiting for.
The price action delivered the technical confirmation. VT closed at 151.44, working through the upper half of its trend channel. iShares Global Tech (IXN) closed at 121.85 (+1.00%) in a clean breakout from a five-month consolidation box that ran from December 2025 through April 2026.
The PHLX Semiconductor index (SOXX) closed at 465.75 (+0.90%) in a parabolic acceleration above the upper bound of its 12-month trend channel. Communication Services (IXP) at 123.60 (+0.84%) is working through its own consolidation toward the upper trendline.
Each of these is a chart pattern with the same name in every textbook: trend continuation in a confirmed bull regime.
The Week at a Glance
VEU (global stocks ex US) traded between an open of 80.51 and a high of 81.46 this week, settling at 80.81 — internal to the unfolding sub-5 impulse off the March 30 low. The lower channel boundary near 76 remains untouched. The upper channel ceiling at 83 is the next resistance. Sub-5 equality with sub-1 projects roughly 91; a 1.618 extension projects toward 100. Section 6 develops the levels.
Asia Tech Held Leadership
The cleanest reading came from the global heatmap. Shanghai Class B led the world at +4.25% for the week. Taiwan Weighted Index +2.77%. Korea Composite +1.90%, Korea 200 +1.69%. Thailand SET50 +1.28%. Nikkei +0.63%, Tokyo Topix +0.33%. The semiconductor and AI supply chain — TSMC, Samsung memory, SK Hynix — repriced higher in real time alongside the SOXX move in the US.
The 1-month and 3-month numbers tell the structural story. Korea 200 is up +27.15% over 30 days and +29.12% over 90 days, with YTD performance at +63.73% — the strongest major market in the world. Taiwan +19.71% / +21.40% / +34.40% YTD. Nikkei +10.74% / +11.61% / +18.22% YTD. Norway OBX +22.89% YTD. Brazil +16.26% YTD. Thailand +16.29% YTD. The leadership has duration, not just a weekly print.
Europe Mixed, Not Broadly Red
DAX +0.57%, IBEX 35 +0.51%, Norway OBX +0.54%, AEX 0.00%. Euro Stoxx 50 essentially flat at −0.09%. CAC 40 −1.37%, MDAX −0.85%, Swiss SMI −0.84%, Austrian ATX −0.33%. The European tape was a coin-flip week, not a regime shift. Eastern Europe gave back more — WIG −2.22%, BUX −0.75% — but month-over-month, all three Eastern European indices remain solidly positive.
Global Pressure Points
Three markets stood out at the bottom of the table for the week. Indonesia’s Jakarta Composite at −5.72% with a three-month return of −16.48% and YTD at −19.55% — the worst-performing major market in the world. Russia RTS at −4.04% for the week, +0.48% YTD — flat-to-slightly-positive year-to-date with continued geopolitical noise. Brazil Bovespa at −2.12% for the week despite a strong YTD of +16.26% — profit-taking, not regime change.
Chart 1 — VEU Across Four Timeframes
The other emerging markets read as muted: India −0.73%, Mexico −0.97%, Hang Seng −0.54%, Hang Seng China Enterprises −0.58%. Australia ASX 200 −0.65%. Switzerland SMI −0.84%. Argentina Merval +0.04%. None of these are large enough moves to shift the cross-regional read; they are texture, not signal.
The week’s contradiction is the headline: parabolic semis, breakouts in global tech and communications, Asian tech leadership extending — against the backdrop of a still-cautious sentiment regime, a still-anchored bond market, and a Fed that has been priced for hold-and-done since the spring. The five forces have aligned. The price action is starting to confirm it.
(2) Overview: The Global Market Map
The global tape’s structure for the week is best read in two layers. The 5-day winners and losers panels show the weekly print; the YTD column shows where the cycle has been running.
The weekly winners list is dominated by Asian tech-heavy and resource-tilted markets: Shanghai Class B, Taiwan, Korea Composite, Korea 200, Thailand SET50, NZX 50, AMX, Nikkei, Shenzhen, DAX, Norway OBX, IBEX, Shanghai, CSI 300, Tokyo Topix, Argentina, Malaysia, AEX. Eighteen markets posted gains.
The losers panel is led by structural weakness (Indonesia, Russia) plus profit-taking in markets that have run hot YTD (Brazil, WIG Polen). The largest country-level decliner this week was Indonesia at −5.72%, extending a three-month decline of −16.48% to a YTD reading of −19.55%. Russia at −4.04% is a separate story — geopolitical headline risk, not a technical pattern.
What the map does not show is more diagnostic than what it does. There is no broad European red zone — the prior weeks’ pattern of 2-5% declines across European indices reset to a coin-flip distribution.
There is no broad EM stress signal — outside Indonesia and Russia, EM markets traded between −1% and +1% on the week. There is no broad commodity-currency breakdown — Australia, Brazil, Mexico, and South Africa are all in the moderate-decline range.
The Macro Backdrop
Behind the regional moves, five macro currents are pointing in the same direction.
Earnings revisions are inverting the historical pattern. Q1 2026 broke the textbook Q1 cut — full-year EPS estimates climbed during the quarter rather than fell. Section 5 develops the mechanics; Section 9 explains why this matters more than the headline beat rate.
Sentiment is neutral, not euphoric. The AAII bull-bear spread hit a two-standard-deviation extreme on the bearish side on March 14 — the contrarian buy signal that worked. What did not happen since: the textbook follow-through into bullish euphoria. Sentiment briefly touched +1 standard deviation in mid-April, then immediately cooled. By April 30, it was mixed. A 10%+ rally without a sentiment top is a structurally different setup than a 10%+ rally with one.
Long-dated Treasuries are holding their multi-year support. TLT closed at 85.61, with the multi-year horizontal support at 84.82 still intact. The bond market has not validated the inflation-re-acceleration narrative; instead, it is at a level it has held repeatedly throughout this cycle. Section 11 develops what a break of that support would mean.
The Fed is priced for hold-and-done. The April 29-30 FOMC meeting passed without surprise. Powell’s framing did not introduce new repricing pressure. Hold-and-done is the curve assumption; further cuts are not priced into the 2026 curve. The Fed has effectively been removed as a swing variable for May.
Global equities broke out under tech leadership. IXN cleared a five-month consolidation box; SOXX accelerated above its 12-month trend channel; IXP is working through its own base. The breakouts are real, the leadership is identifiable, and the breadth question (Section 4) is now in train.
The five together form the structural fingerprint of a bull market built on fundamentals, not on speculative excess.
Tech Thematics — The Intra-AI Divergence
The 21-ETF thematic table makes the rotation legible. The week’s top performers: LIT (Battery & Energy Storage) +5.88%, XSD (Semis Equal-Weight) +4.06%, AIQ (AI Compute) +3.05%, CIBR (Cybersecurity) +2.26%, WTAI (AI Innovation) +2.11%, GRID (Smart Grid) +2.10%, QTUM (Quantum) +1.79%, IGV (Software) +1.68%, FDN (DJ Internet) +1.12%.
The XSD vs. SMH spread is the most diagnostic single read in the table. XSD (equal-weighted semiconductors) at +4.06% decisively outpaced SMH (cap-weighted) at +0.67% for the week. Year-to-date, the spread is even more pronounced: XSD +54.99% vs. SMH +41.57%.
Equal-weighted construction has been beating cap-weighted construction across the semiconductor space for the entire YTD period — meaning the leadership has been broadening beyond the largest names rather than concentrating in them. The mid- and small-cap semiconductor stocks are participating in the rally.
IGV (Software) at +1.68% on the week is the second key read. The “SaaSpocalypse” YTD damage of −18.03% is real, but the weekly tape has flipped from stalled to advancing. Combined with the IXN sector breakout (Section 6), software is now in the early stages of joining the broader tech move rather than diverging from it. The bottom-recovery thesis from the prior weeks is back on the table.
The hedge layer is also pointing risk-on. Gold (GLD) at −2.32% week, −3.34% month. Bitcoin (IBIT) at +1.02% week, but −10.43% YTD and −19.07% over 52 weeks. Copper (COPX) at −4.03% week despite a +107.64% 52W reading. None of the hedge or speculative-flight assets are catching a defensive bid. The flow is going to equity, not to safety.
The two negative outliers — Defense Tech (SHLD) at −7.57% over 30 days, −9.73% over 90 days — and Fintech (FINX) at −12.98% YTD — are sector-specific stories, not broad signals. They are worth watching as separate questions, not as macro indicators.
(3) The State
Five forces, one direction. The roadmap for the rest of the year comes into view.
The Thesis
The bull market that began in autumn 2022 is in wave 3 of the larger degree, and wave 3 is extending. Inside that wave 3, the impulse off the March 30, 2026, low is sub-wave 5. The rule of price equality between sub-wave 1 and sub-wave 5 of an extended wave 3 places its target meaningfully above the current price.
The setback that follows aligns with the historical midterm-year drawdown window and the seasonally weakest stretch of the calendar. The post-midterm rally that follows aligns with the strongest year of the four-year presidential cycle.
This is not a forecast for the next week. It is a roadmap for the next nine months — and the structural support for the roadmap got stronger this week.
Chart — The Larger-Degree Wave Count on VEU
Sub-4: February 2026 → March 30, 2026 (sharp and brief — alternation vs. complex sub-2 ✓)
Sub-5: March 30, 2026 → in progress
The chart shows the impulse off the March 30 low working through the trend channel. Sub-5 equality with sub-1 places the target near 91; a 1.618 extension places it near 100. The intermediate resistances at 83 (channel top) and 85.20-87.90 (Fibonacci levels) are stations on the way.
The Five-Force Confirmation
What the chart describes is what the five forces validate.
Earnings. Forward EPS estimates for 2026 have moved from 14.4% expected growth at year-start to 21.3% today. Analysts are revising upward during reporting rather than after. The bull-case fundamental engine is intact and accelerating.
Sentiment. The contrarian buy signal fired on March 14. The follow-through into euphoria did not occur. Cash positioning remains sidelined, retail did not chase, and the wall of worry is intact. The setup that historically precedes mean-reversion sells is absent.
Bonds. TLT at 85.61, multi-year support at 84.82 still in place. The bond market is not signaling an inflation re-acceleration. Yields have drifted, but they have not broken the structural levels that would force equity-multiple compression.
Fed. Hold-and-done is priced. The April 29-30 meeting closed without a hawkish surprise. The Fed has stopped being a directional-risk variable for the next several months.
Technical breakout. IXN broke a five-month consolidation. SOXX broke its 12-month channel ceiling. IXP is working through its own base. The leadership is identifiable, the breakouts are clean, and the structure aligns with the wave count.
When the macro setup, the sentiment regime, the bond market, the central bank backdrop, and the technical structure all point in the same direction, the call is to position with the trend and respect the falsification levels. Section 11 defines the latter.
The VT/SPY Ratio
The VT/SPY ratio held its 30-week moving average for the third consecutive week. Co-leadership remains the regime — the international tape is participating in the rally rather than ceding leadership to US-only exposure. A clean break below the 30W MA would force a rotation read; the ratio sitting on its average without breaking is the continuation read.
The trend channel is intact. The wave count is intact. The breadth structure is intact. The setup is intact across every dimension.
(4) The State Continued: Regions & Sectors
Regional Read
Asia Pacific extended its leadership. The semiconductor capex narrative drove North Asian tech-heavy indices for the week. Korea (Composite +1.90%, 200 +1.69%) and Taiwan (+2.77%) host the upstream of the global semiconductor supply chain — TSMC, Samsung memory, SK Hynix. Their leadership reflects, and amplifies, the same wave-5 sub-impulse driving SMH and SOXX. Japan’s Nikkei (+0.63%) and Tokyo Topix (+0.33%) participated more modestly. China was constructive: CSI 300 +0.44%, Shanghai Composite +0.46%, Shanghai Class B +4.25%. Hang Seng (-0.54%) softened on the dollar move.
Europe was a coin-flip week. DAX +0.57%, IBEX +0.51%, AEX 0.00%, Euro Stoxx 50 -0.09% — half the major indices flat-to-positive. CAC 40 (-1.37%), MDAX (-0.85%), and Swiss SMI (-0.84%) gave back modestly. The 30-day picture remains constructive across Europe; this week did not unwind the April story.
Latin America gave back after a strong April. Brazil Bovespa -2.12% on the week with YTD +16.26%. Mexico IPC -0.97% on the week with YTD +5.66%. Both markets remain solidly positive YTD; the weekly print is profit-taking.
Eastern Europe was modestly red — WIG -2.22%, ATX -0.33%, BUX -0.75%. All three remain solidly positive YTD (Polen +9.61%, Austria +8.79%, Hungary +20.50%).
Stress points were Indonesia (-5.72% week, -19.55% YTD) and Russia (-4.04% week, +0.48% YTD). Both have idiosyncratic stories — Indonesia structural, Russia geopolitical. Neither rises to a regional or global signal.
Global Sectors
The weekly sector decomposition is the breadth signal. The cyclical-and-defensive split is far less stark than the early-stage Wave 5 read had suggested. Of the eleven global sectors, nine posted weekly gains: Energy IXC, Tech IXN, Financials IXG, REET REIT, Telecom IXP, Cons Staples KXI, Utilities JXI, Industrials EXI, Healthcare IXJ. Two sectors gave back: Cons Discretionary RXI -0.64% and Materials MXI -1.79%.
The implication is meaningful. Late-stage extended-wave-3 sub-impulses commonly show leadership concentration; this week showed leadership extension. Energy (+3.30%) led on the oil-bid; Tech (+1.00%) and Financials (+1.16%) and REIT (+0.93%) and Telecom (+0.84%) clustered in the +0.8% to +1.2% range. Defensive sectors — Staples +0.79%, Utilities +0.74% — kept up. The breadth is broadening, not narrowing.
Materials (-1.79%) is the read worth tracking. Materials have been a cyclical-leadership tell in this cycle; a single weekly print of -1.79% does not reverse a multi-month uptrend, but if it persists into a 2-3 week pattern alongside copper continuing to roll over (COPX -4.03% week, -6.79% over 30 days), the cyclical-rotation narrative would need a closer look.
Tech Thematics — Watch the Software-Semis Spread
The XSD-vs-SMH spread is the diagnostic of the cycle: equal-weighted semiconductors have decisively outperformed cap-weighted semiconductors YTD (+54.99% vs. +41.57%). The leadership has been broadening beyond the largest names rather than concentrating on them. That is a healthy bull-market signature.
IGV (Software) +1.68% on the week is the freshness signal. After a -18.03% YTD drawdown, IGV ended this week with the IXN broader-tech breakout. The bottom recovery in software, last edition’s flagged broadening signal, is back in motion.
AI compute breadth: AIQ +3.05%, WTAI +2.11%, QTUM +1.79%. These are not narrow AI bets; they are broad thematic exposures, and they are participating with the broader tech leg.
The Closelook AI Barbell composite — DTCR + XLU + GRID + NLR (Power side) vs. IGV (Software middle) — is showing the structural pattern with even sharper relief. Power side: +9.04% (XLU) / +24.91% (GRID) / +15.94% (NLR) / +36.97% (DTCR) YTD. Software middle: -18.03% YTD. The barbell spread is roughly +40 percentage points on a YTD basis. The thesis is not theoretical.
Hedge layer: Gold and Copper rolling, Bitcoin still in a 52-week drawdown. Risk-on flow to equities, not to safety.
(5) What May Lie Ahead: Macro Setup
The Earnings-Revision Inversion
The Q1 2026 earnings season is rewriting the analyst-revision playbook. With ~63% of the S&P 500 having reported by May 1, the beat rate stands at 84% — six points above the five-year average. The surprise magnitude is the more telling number: companies are clearing estimates by 20.7% in aggregate against a 5-year norm of 7.3%. Forward EPS estimates for full-year 2026 have moved from 14.4% expected growth at year-start to 21.3% today, with Q2, Q3, and Q4 all revised upward during reporting rather than after. Barclays raised its 2026 S&P 500 EPS target to $321 from $305. The Information Technology sector is projected to hold a 29% net profit margin in 2026 — a level the index has not seen as an annual figure since FactSet began tracking the metric.
The dispersion underneath the headline matters more than the headline. Five sectors are on track for double-digit earnings growth in 2026: IT, Materials, Industrials, Communication Services, and Consumer Discretionary. The Mag-7 cohort is projected at 22.7% earnings growth — but the other 493 are now at 12.5%, the broadest participation in this cycle. Energy is the lone sector running the traditional downward-revision pattern, with Exxon, Chevron, and Phillips 66 cut materially since March 31. That separates two narratives in this week’s tape: structurally improving margins on AI-driven productivity (the broad index) versus cyclical commodity dynamics (Energy). Both pulled the Energy and Tech sectors higher this week — but the durability of the two moves is fundamentally different.
The Rally Nobody Trusts
The most telling sentiment data of 2026 is not what fired in March, but what failed to fire in April. On March 14, the AAII bull-bear spread hit −14.4% — a two-standard-deviation extreme, with bearish readings at 46.4%. That was the contrarian buy signal, and it worked: the S&P 500 rallied more than 10% over the following six weeks. The textbook follow-through is euphoria — bullish sentiment surging past 50%, then 55%, holding elevated for multiple weeks, eventually triggering the contrarian sell signal at the next extreme. None of that happened. Bullish sentiment briefly touched 46.0% in mid-April for a single week, less than one standard deviation above the historical mean, then immediately cooled back. By the April 30 reading, sentiment was already mixed — bullish declining, bearish edging up, neutral rising.
This is structurally significant. A 10%+ rally without a corresponding sentiment euphoria means retail investors did not chase the move. Cash positioning remains sidelined, FOMO never materialized, and the “wall of worry” stays intact. From a contrarian standpoint, this is the opposite of a top-warning configuration — there is no speculative excess to fade. Combined with the earnings-revisions inversion above, the pattern reveals what actually drove the rally: institutional and quantitative buying anchored to upward EPS revisions, not retail enthusiasm. That distinction matters for what happens next. When rallies are built on sentiment, they end when sentiment exhausts. When rallies are built on fundamentals while sentiment remains cautious, structural support holds until either earnings revisions roll over or sentiment finally catches up — and the latter typically requires another leg higher first.
The Bond Market’s Quiet Confirmation
The third structural support for the bull case is sitting where most readers do not look: TLT closed at 85.61 for the week, with the multi-year horizontal support at 84.82 still intact. The downtrend line from the 2020 highs has compressed into a multi-year base. The bond market is not signaling inflation re-acceleration — and that absence of signal matters more than its presence would.
If the Fed-priced-for-hold-and-done thesis is correct, TLT does not need to rally to validate the equity bull case. It only needs to not break support. As long as the bond market does not force a yield-curve repricing higher, the equity discount-rate channel stays anchored, and the AI-capex narrative does not face a rising-cost-of-capital headwind. The current setup delivers exactly that: a bond market sitting on its support level rather than breaking through it.
The corollary is that a TLT break below 84.82 would be the single cleanest warning signal for the equity setup. Section 11 develops the implication.
Central Bank Pulse
Fed: The April 29–30 FOMC meeting passed without surprise. Powell held rates and characterized inflation and growth in balanced terms. Market pricing of “hold-and-done” for 2026 was already in; the press conference did not introduce a framing that would force a repricing. The Fed is no longer the swing variable for May. The bond market and the oil curve are (Section 11).
ECB: The euro area’s dovish path remains intact. Dollar firming this week was less a hawkish-Fed story than a stalled-peace-talks story; the underlying ECB-Fed divergence supporting European equities remains structurally unchanged.
BoJ: Rate-hike expectations for the next BoJ meeting have continued to fade, consistent with the prior weeks’ read. The yen weakened modestly against the dollar.
PBoC: China’s Q1 GDP at 5.0% beat expectations. The PBoC’s accommodative stance continues without fresh stimulus. China-listed equities (MCHI) traded mixed on the week, sensitive to the dollar move and to the technology-export-control narrative.
Macro Commentary
“The path of least resistance for the major US indices is still up. Fade rallies in defensives, lean into the trend in AI infrastructure, and recognize that the rotation thesis depends on the dollar — not on relative-value arguments alone.” — Michael Hartnett, Bank of America Securities, “The Flow Show,” April 24, 2026
Hartnett’s framing aligns with this edition’s reading on two axes. First, the curve-steepener call presupposes the macro regime supports continued risk appetite — consistent with our wave-5 extension thesis. Second, the consumer-cyclical and China overweights are dollar-weakening trades, and they sit a step ahead of the price. They will work when the dollar rolls again; this week’s firming was a pause, not a regime change.
Seasonality
Source: Per Barchart seasonality methodology until our own endpoint ships.
The seasonality table puts the next nine months in context. April 2026 closed at +7.03% for VEU — comfortably in the top quartile of historical Aprils (average +1.86%, %Positive 76.47%). YTD through April: +9.44%, a strong start to the year despite March (-8.08%) being the weakest individual month.
The seasonal map turns less supportive. May has averaged −1.16% with a 43.75% hit rate. June has averaged +0.43% with a 43.75% hit rate. The May-June window is historically the softest stretch for ex-US exposure. July and August historically recover (averages +1.99% and -1.10%; the August reading mixes weak first halves with stronger second halves).
The map turns sharply negative in late summer. September has averaged −0.36% with a 56.25% hit rate. October in midterm-election years is statistically the most volatile month of the four-year presidential cycle. The seasonal soft window from late August through mid-October is well-documented; in midterm years specifically, the average drawdown to the October low is approximately 17%, and post-midterm November averages +1.54% with a 56.25% hit rate.
This is the calendar that lines up with the wave count. Sub-5 of larger Wave 3 finishing into summer; larger Wave 4 forming through the seasonal soft window with the midterm overlay; larger Wave 5 launching from the post-midterm low into 2027. Three independent frameworks — Elliott structure, seasonal pattern, presidential cycle — point to the same nine-month roadmap.
(6) What May Lie Ahead: Technical Setup
This week’s technical reading is the cleanest in months. Three sector breakouts confirm the wave-5 sub-impulse on VEU, and they did so on the same calendar week.
The Tech, Comm, and Semis Breakouts
iShares Global Tech (IXN) closed at 121.85 (+1.00%) in a clean breakout from a five-month consolidation box that ran from December 2025 through April 2026. The chart shows the structural read with no ambiguity: a long uptrend channel from late 2022 through the present, with two consolidation pauses inside it — one in mid-2024, one Dec 2025 to April 2026. Both consolidations resolved upward. The April 2026 breakout is the second leg of the same structural pattern. The reference level marked at 97.02 is the prior support; price is currently 25% above it.
This is the breadth signal that was missing during the early stages of the post-March-30 rally, and it is now arriving on cue.
iShares Global Comm Services (IXP) at 123.60 (+0.84%) is in the setup phase of its own breakout. The chart shows a long uptrend channel from late 2022 with a meaningful sideways consolidation box from mid-2025 through April 2026. Price is now in the upper half of that box, working through the boundary. The breakout is not yet confirmed at the same definition as IXN, but the structural setup is clean.
iShares Semiconductor (SOXX) at 465.75 (+0.90%) is in parabolic acceleration above its 12-month trend channel. The chart shows a steeper uptrend channel from spring 2025 and a recent vertical move that has decisively cleared the upper bound. This is the wave-5 sub-impulse on the semiconductor side, and it is the most extended of the three breakouts on this page.
The three together — Tech breaking a five-month base, Comm working through its base, Semis parabolic above channel — are the textbook signature of a tech-led leg of an extended wave 3. They are not three independent stories; they are three views of the same macro engine: upward earnings revisions, AI-capex resilience, and broadening institutional buying.
The Technical Reading on VEU
VEU is in sub-wave 5 of larger Wave 3, the third extended impulse from the October 2023 low. The rule of alternation confirmed sub-4 at the March 30 low. The rule of equality between sub-1 and sub-5 of an extended Wave 3 places the price target at:
Sub-1 length: approximately 15 points (October 2023 low ~44 → autumn 2024 high ~59, on VEU)
Sub-5 equality target: ~76 + 15 = ~91 on VEU
Sub-5 1.618 extension target: ~76 + 24 = ~100 on VEU
Intermediate resistance levels en route:
~83: upper trend channel
85.20: Fibonacci 1.272 extension from prior swing
87.90: Fibonacci 1.618 extension from prior swing
~91: sub-1 = sub-5 equality
~100: sub-5 = 1.618 × sub-1 extension
Main Chart
Key Levels: Current 80.81 · Upper Channel ~83 · Lower Channel ~76 · Sub-5 Equality ~91 · Sub-5 Extension ~100 · Horizontal Support 64.02
Technical Commentary
This week’s VEU print is internal to sub-5 — a continuation of the impulse off the March 30 low, with the upper channel ceiling at 83 as the next resistance. Coppock remains rising; the 30W moving average remains below price and is rising; ADX remains in a strong-trend reading. The Slow Stochastic resets that were the prior weeks’ technical concern have continued without breaking the price structure — exactly the pattern that confirms continuation rather than reversal in a confirmed bull regime.
The wave-5 sub-structure can itself be counted in five waves at one lower degree. The move off March 30 to mid-April reads cleanly as wave 1 of the sub-5 impulse. Recent action is sub-wave 2 of sub-5 — sharp and brief, by the same alternation logic that anchored the larger reading. Sub-wave 3 of sub-5 is expected to drive the next leg toward 85-87.
Hard invalidation: weekly close below 76 on VEU breaks the steep trend channel and breaks the wave count. Below 64.02 horizontal support, the entire wave-3 read from October 2023 is off the table.
Alignment Check
═══ Confluent Bullish — Five Forces Aligned ═══
Five independent reads — earnings revisions, sentiment, bonds, Fed, technical breakout — point in the same direction. The wave structure, macro setup, and seasonal calendar align on the same nine-month picture. Sub-5 of larger Wave 3 finishing into late spring/summer, larger Wave 4 forming through the seasonal soft window in late August through mid-October with the midterm-year overlay, larger Wave 5 launching from the post-midterm low. The roadmap is testable, falsifiable, and has clear invalidation levels at every degree.
When the structural, macro, and seasonal frameworks align with the technical breakout signal, the call is to position with the trend and respect the falsification levels. When they diverge, the call is to reduce gross. This week, they align — and they align across nine months, not just nine days.
(7) The ETF Portfolio: What We Did
Updates will be provided from the next edition onward.
(8) The ETF Portfolio: What We Plan To Do
Moves under active consideration — conditional on signal confirmation.
Updates will be provided from the next edition onward.
(9) Knowledge Corner — The Vanishing Q1 Cut
Sell-side analysts begin every calendar year with optimistic earnings estimates. Companies then set conservative guidance once the quarter actually starts. The collision usually plays out predictably: estimates drift down 3-4% during Q1 itself, companies subsequently beat the lowered bar, and the headline reads “78% of the index beat expectations.” It’s not luck — the bar moved to where it could be cleared.
This is the mechanism behind every “earnings season was strong” headline you have ever read. Beating cut estimates is structurally different from beating uncut ones, but the press release looks the same.
Q1 2026 broke the pattern. The full-year EPS growth estimate for the S&P 500 didn’t fall during the quarter — it climbed. From 14.4% at year-start to 21.3% by May 1. Q2, Q3, and Q4 forward estimates were revised upward during the reporting period instead of after. The last comparable inversion was Q1 2021, coming out of pandemic distortions. Before that, the early-1990s expansion.
For the reader: when companies beat estimates that have been raised mid-quarter, the quality of the beat is structurally different from beating estimates that have been cut. A forward P/E anchored to falling estimates looks richer than it is. A forward P/E anchored to rising estimates is the opposite — what looks expensive may not be.
(10) Upcoming Transactions: Be Informed
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(11) What May Go Wrong: Risk & Change Triggers
The bull thesis runs on five aligned forces. Two of them sit in markets outside equities themselves — the bond market and the oil curve. That is also where the warning signals would first come from. The bond market warns first. The oil curve warns second. The equity market is last to know.
Two specific triggers are worth watching, and one previously-flagged risk has been removed.
Trigger 1: TLT Breaks Below 84.82
The 20+ year Treasury ETF closed this week at 85.61 — just 0.79 points above its multi-year horizontal support at 84.82. The downtrend line from the 2020 highs has compressed into this base zone. As long as TLT holds 84.82, the bond market is signaling that the inflation-re-acceleration narrative is not the dominant macro story; that the Fed’s hold-and-done framing is consistent with where yields actually settle; and that the equity discount-rate channel stays anchored.
A weekly close below 84.82 would indicate the bond market is repricing the yield curve higher, independent of any Fed action. That move would directly pressure equity multiples through the discount-rate mechanism and indirectly pressure the AI-capex narrative by raising the cost of capital for the hyperscaler buildout. The TLT level is the single cleanest macro warning signal available on the public tape. Watch it before the equity market does.
Trigger 2: Long-Dated Oil Futures Catch a Bid
The oil rally pattern we have been observing has been concentrated at the front end of the curve — spot WTI and the front-month contracts have moved with geopolitical headlines, while the September and December 2026 futures have remained anchored near long-run equilibrium. That term structure is the benign reading: the market is pricing the geopolitical premium as transitory.
The risk is the reverse: if the September and December 2026 contracts begin to rally alongside spot, the curve flattens, and the market is then pricing in persistent higher energy costs through year-end. Persistent higher oil feeds directly into sustained inflation expectations. Sustained inflation expectations force the Fed to maintain a hawkish stance, which pressures equity multiples through the discount-rate channel and pressures the AI-capex narrative through margin compression at the energy-intensive end of the buildout — data centers, chip fabrication, copper-heavy grid investment.
Front-end alone is noise. Back-end moving is signal. The single cleanest test is whether the December 2026 WTI contract moves above its 50-day moving average alongside continued spot strength. That is the signal that the inflation re-acceleration narrative has become the dominant macro story.
On the Fed: Removed as a Risk
The April 29-30 FOMC meeting passed without surprise. The Committee held rates and characterized inflation and growth in balanced terms. The market’s “hold-and-done” pricing was already in. Powell’s press conference did not introduce a framing that would force a repricing. The Fed is no longer the swing variable for May.
Technical Invalidation Levels
Sub-5 in progress (smaller degree): weekly close below 76 on VEU breaks the steep channel lower trendline and invalidates sub-5 in progress.
Sub-5 timing: sub-5 should not exceed sub-1 in time meaningfully. Sub-1 ran approximately twelve months. A sub-5 that ran four months without reaching the 91 equality target would warrant scrutiny.
Larger Wave 3 (full structure): weekly close below 64.02 horizontal support invalidates the entire wave-3 read from October 2023. This is the bright line below which the bull market itself comes into question.
Indicator Shift Triggers
Three indicator moves would flip the current read:
Coppock rolling from rising to topping — would flag larger-degree maturity, consistent with the Section 3 forecast that larger Wave 3 completes in summer 2026. Watch for this through May-July.
RS vs SPY breaking decisively below zero — would confirm that the co-leadership pause has become rotation.
ADX falling below 20 from a current strong-trend reading — would signal a transition from trending to ranging, consistent with sub-5 completion.
Calendar Triggers
The roadmap is testable on the calendar:
By the end of June, if VEU has not made progress toward the 85-88 zone, sub-5 may be running out of momentum.
Late August through mid-October: if the seasonal/midterm-year setback does not materialize, the larger Wave 4 read is wrong.
Mid-October low: if the setback materializes but does not produce a definable low, larger Wave 4 may extend beyond its expected window.
The thesis holds until one of these triggers fires. When they do, the next edition updates the read.
(12) Final Words
“What seems too high and risky to the majority generally goes higher; and what seems low and cheap generally goes lower.” — Jesse Livermore
Livermore’s observation is the cleanest summary of the tape this week. Earnings revisions are inverting the historical Q1 pattern. Retail sentiment did not convert to euphoria after a 10%+ rally. Long-dated Treasuries are sitting on their multi-year support. The Fed is priced for hold-and-done. And global equities broke out under tech leadership. None of that combination is consistent with a market about to roll over. All of it is consistent with the Livermore principle — the rally that nobody trusts continues for longer than the doubters expect, until the doubters become believers and become the marginal buyer at the top.
The frameworks aligned at the March 30 low. They align again now, with five reinforcing forces, at the start of sub-5 of larger Wave 3, with a roadmap visible through Q4. The discipline is to stay with the count while the count is working — and to respect the invalidation levels when, eventually, they fire.
Sub-5 has weeks to run. Larger Wave 4 will come, on the calendar that aligns with seasonality and the midterm cycle. Larger Wave 5 will follow. The work is not to predict each week — it is to respect the structure across the months.
Thank you for reading. See you next Saturday.
Thank you for reading. See you next Saturday.
