“How do you know when to double-down on a position? Only when you’re willing to triple-down on a position!”
“When the market does the opposite of your expectations, repeatedly, it is detailing through price that your understandings and assertions are wrong.”
“Some industries and sectors have entered the “it’s not what you make, it’s what you keep” portion of the cyclical conversation.”
– SETH GOLDEN, CHIEF MARKET STRATEGIST AT FINOMGROUP.COM
(CONTRIBUTOR/PREMIUM MEMBERS ONLY)
MID-WEEK SUMMARY
THURSDAY, MAY 7TH, 2026
Welcome to Market Mania #27!
Market Mania #27 arrives with a simple but uncomfortable lesson: the proof is in the returns, not in the rhetoric. Markets do not reward the best forecasters or the loudest warnings; they reward discipline, patience, and the ability to stay invested through volatility. That is the central message of Finom Group’s “Proof Is In The Returns” proprietary research report, and it is the right framework for today’s tape.
Seth Golden, Chief Equity Market Strategist at Finom Group, makes a point that cuts through a lot of market noise: trend-following, downside fixation, and polished market quotes are no substitute for the basic math of investing. If you cannot tolerate a double-digit drawdown, you are unlikely to capture a double-digit return. That is not theory but rather the behavioral reality of compounding over time.
Fintwit archive, 2014. pic.twitter.com/A90Fk8veBt
— Ed Borgato (@EdBorgato) May 7, 2026
What matters most now is not whether every warning proves right in the short term, but whether investors have the discipline to act when opportunity appears. Pullbacks and scary headlines can feel decisive in real time, but the report reminds us that economic data and technicals mostly describe where we have been; they do not cause the future. In that sense, the market is not asking for predictions — it is asking whether investors have a process strong enough to stay aligned with the long-term trend when conditions get uncomfortable.
Your psychology as an investor will make you more money and keep you from losing money more than any sort of analytical work that you can do in excel
— Boring_Business (@BoringBiz_) May 7, 2026
So Market Mania #27 is about staying anchored to what actually works. Volatility is part of the path, not a reason to abandon it. The proof is not in the talking points, the warnings, or the clever quotes. The proof is in the returns.
CHART(S) OF THE WEEK
🏆 TODAY’S CHART OF THE WEEK WAS SHARED BY SETH GOLDEN (@SethCL):
🏆 CHART OF THE WEEK: Stock Market vs Economy
If that's not weird I don't know what weird🤪 is.
Historically, Consumer Discretionary/Staples (top) travels same path as S&P500 (bottom), but there is a huge divergence since April!
Consumer down ⬇️ sharply but $SPX up ⬆️ sharply!$XLY $SPY $XLP $QQQ $MCD $SBUX $AMZN $TSLA… pic.twitter.com/dCxTwBuCzk
— Seth Golden (@SethCL) May 7, 2026
This week’s chart captures an important split beneath the surface: the consumer balance sheet remains the strongest it has ever been, yet inflation is still the variable that can quietly erode that strength if it is allowed to stay sticky. In other words, the household backdrop is not fragile, but it is still vulnerable to a slow squeeze in real purchasing power, especially if prices rise just fast enough to feel manageable but not fast enough to force an immediate policy response.
That is where the chart becomes more than a sector comparison. Historically, Consumer Discretionary and Staples tend to track the broader market over time, but since April that relationship has broken down sharply, with consumer-linked equities weakening even as the S&P 500 has continued higher. The market is clearly not pricing a clean collapse in demand; instead, it appears to be pricing a divergence between strong headline indices and a consumer cohort that is feeling the pressure from inflation, rotation, and uneven spending behavior.
The most important nuance is that this does not yet read like a broken consumer. It reads like a consumer that is still standing, but whose margin for error has narrowed because inflation continues to act like warm water around the edges. The analogy is apt: if policy keeps the temperature just warm enough, people adapt rather than leap. That can prolong growth and keep the cycle alive, but it also means the strain builds slowly and can be underestimated until it becomes broad enough to matter.
For investors, the implication is straightforward. This is not a call to abandon risk, but it is a reminder that strength in the consumer balance sheet does not eliminate inflation risk; it only gives the economy more time to absorb it. The market can continue to reward large-cap leadership while consumers lag, but the divergence should not be ignored. If inflation remains contained, the consumer’s strength can keep supporting earnings and growth; if it re-accelerates, the water gets hotter fast, and the market will have to reprice that reality.
The chart of the week, then, is really about balance. The consumer is still healthy, the broad market is still resilient, and the cycle is still intact. But inflation remains the one factor that can turn resilience into strain without warning, which is why the right posture is not complacency, but disciplined vigilance.
BONUS:
I'm thinking the sentiment has gotten way too frothy?
Nobody wants Puts on Nasdaq 100 $NDX $QQQ
NDX P/C Ratio is lowest level since 2023, and has fallen off a cliff.
Near-term mean reversion in sentiment; price consolidation? $COMPQ $TQQQ pic.twitter.com/bVm8vs8IiL
— Seth Golden (@SethCL) May 7, 2026
Rolling 1-mnth change in positioning of "Systematic" traders. You can think of this group as funds/managers that are rules guided. I view this crowd as the traders that have been moving markets of late.
Short in spring 2025 and 2026. Longest they been, currently and since.
They… pic.twitter.com/83YLEJBSUe
— Seth Golden (@SethCL) May 7, 2026
And finally… a confirming NYSE A/D Line new all-time high!
Can all unclench now, it's not 2007/2008-like folks!$SPX $SPY $NYA $QQQ $NDX $DIA $IWM $MID $VIX pic.twitter.com/WIRltQZON8
— Seth Golden (@SethCL) May 7, 2026
Exactly 0 of my 10 #recession indicators have triggered a warning alert in 2026, only 1 has been triggered since 2023, quickly vanquished in the same year.
There is no probability that exists over forward 6 months for recession without an exogenous shock. #economy #Macro… pic.twitter.com/PoJpFvmyfe
— Seth Golden (@SethCL) May 7, 2026
In 2017 biggest pullback was -2.5%. VIX fell to all-time low. It was a bubble? That's what they tried to convince.
Blue line is Oil/Dow 1929/Nikkei bubbles combined. Compared to Technology trend through 2017, people claimed it was also a bubble.
Experience vs. doom-porn!$SPX… pic.twitter.com/61mjXcVKUD
— Seth Golden (@SethCL) May 7, 2026
Mark-it folks, $SPX achieved 14th all-time high of the year. Has only stopped their 1 other time.
94% probability the high is not in, but also…
April was only 23rd time SPX closed April at all-time high. In every previous instance, the year finished even higher than April.… pic.twitter.com/YIrTPS2qdI
— Seth Golden (@SethCL) May 7, 2026
Look at the chart people; instead of the regurgitative narratives.
Who was on top since 2022? That's right, the blue line ie Lower-income households. Now, is simply the tale as old as time; it's called mean reversion. Calling it something else just gets clicks! @steveliesman https://t.co/KDzXNrHFVN
— Seth Golden (@SethCL) May 7, 2026
When price is diving and EPS estimates are rising strongly, you buy and/or hold. It's no more complicated than that.
Everything else is social/financial media entertainment!$SPX $ES_F $SPY $QQQ $NDX $IWM $NYA $VIX pic.twitter.com/uL7aRYLgZa
— Seth Golden (@SethCL) May 7, 2026
A strong April often carries its momentum into May. S&P 500 gained over +9% for the month, making it the second best April since 1950.
In the 10 prior cases with $SPX April gains above +5%, May was positive 90% of the time. The single loss was 1983.$SPY $NDX $SMH $NVDA $AAPL… pic.twitter.com/CQauBNNuPX
— Seth Golden (@SethCL) May 4, 2026
If you have 5 – 6 percent Nominal GDP…
1. You don’t have a default event
2. You don’t have a credit cycle event
3. You don’t have 10% Y/Y gain in claims
3. You don’t have a recession
4. You don’t have sustained downturn in equities#Macro #investing #SPX500— Seth Golden (@SethCL) May 6, 2026
Tech went from waaay underperforming 4-Yr Presidential Cycle (midterm-election), Decennial Cycle and 1-Yr Monthly Cycle through Q1 to waaaaay outperforming by end of April.
Regardless of the cycle analogue chosen, unless this time is different, should be some cooling off!$SPX… pic.twitter.com/nNVmWHJXav
— Seth Golden (@SethCL) May 5, 2026
🔥April 2026 was only the 23rd time that $SPX has closed April at an All-Time High.
In every previous instance, the year finished even higher than April's close. NO melt-down, even in Midterm-election years.
May–Dec average return = +11.2% 😎
Win Rate = 100% 🚨$SPX $QQQ… pic.twitter.com/ASQVdoGFfx— Seth Golden (@SethCL) May 5, 2026
Large-cap Earnings are breaking clean away from both Small and Mid-cap Earnings growth.
Large-cap leads for a reason. Begging for a dog fight in your portfolio when buying down the cap-tier levels at this point. $SPX $NDX $SPY $QQQ $IWM $RUT $MID $AAPL $NVDA $DIA $META $AMZN… pic.twitter.com/J0a5E55a9x
— Seth Golden (@SethCL) May 4, 2026
If AI is Dotcom:
S&P100/S&P500 Performance Ratio 2025-2026 completes the achieved price action from 1997-1998 then 2026-2027 would complete 1999-2000 price trend.
2026 downtrend is perfectly analogous to '98, and subsequent recovery in process.
1999/2027 AI goes parabolic?… pic.twitter.com/gXANxVXxkA
— Seth Golden (@SethCL) May 3, 2026
Difference in AI Boom from Dotcom Boom is:
Forward Positive 12-month Precent Change in Forward Earnings and Revenues remain in a strong uptrend.
During Dotcom Boom, Earnings rolled over, while Revenues continued to climb.
Bull market is not done yet!$SPX $ES_F $SPY $QQQ… pic.twitter.com/Kc7ktcVCAJ
— Seth Golden (@SethCL) May 2, 2026
S&P500 has surged above a critical 100-year trend line resistance.
While this may not prove negative for price right away, the rest of 2026 may prove the last hoorah, before macro-issues come home to roost. $SPX $SPY $QQQ $IWM $BTC $AAPL $NVDA $TSLA $GLD $TLT $VIX $META… pic.twitter.com/NgD4YHRXgV
— Seth Golden (@SethCL) May 2, 2026
TOP TWEETS OF THE WEEK
The market cap of semis stocks in the Philly SOX index is now 22% of S&P 500 market cap. It was just 6% at the April lows just over a year ago. pic.twitter.com/4UXnjpffpN
— Bespoke (@bespokeinvest) May 6, 2026
$SOX has hit our "Bubble Watch" threshold. Last one was Dec 2021. As we discuss in today's "Weekly Survival Guide", it's a signal for sizing, not for shorting. #semis, $INTC, $NVDA pic.twitter.com/HFAUBgRunm
— RenMac: Renaissance Macro Research (@RenMacLLC) May 5, 2026
Just when you thought big tech leadership was over…$XLK pic.twitter.com/uCQyjOqGmJ
— Steven Strazza (@sstrazza) May 5, 2026
The SOX Semiconductor Index started today 53% above its 200-DMA – the biggest discrepancy since March'00, but…
The index FIRST approached that 50% threshold in January ’99.
The percentage then shot all the way to +110% by March 2000 before the bubble finally began to burst.… pic.twitter.com/W0iQVa4Y0X
— Frank Cappelleri (@FrankCappelleri) May 6, 2026
Comment: While a single prior case is not a reliable indicator, it’s worth noting that the July 2007 homebuilder breakdown (proxy HGX) preceded the SPX top by about two months. Upshot? Don’t neglect the housing sector given its outsized role in the market economy. https://t.co/QOISSxQSld pic.twitter.com/YuqSXW4PkG
— Mark Ungewitter (@mark_ungewitter) May 6, 2026
The % of Industry Groups more than 20% below their 52-week highs just fell back below 10%.
A “sure thing?” Of course not (see 2022).
Historically a decent “continuation” signal? Absolutely.
Make of it what you will. @sentimentrader pic.twitter.com/gUcKn8ed8X— Jay Kaeppel (@jaykaeppel) May 5, 2026
Tom Lee sees a deeper second half drawdown.@fundstrat is one of the best in industry, but respectfully, we think the low is already in.
When S&P 500 makes 3+ April ATHs, lows occur in H1 every time. Full year: 100% positive, avg 20%+
Even better, 13/15 years saw 10%+ gains. https://t.co/czyx3SFljX
— Bluekurtic Market Insights (@Bluekurtic) April 21, 2026
Another reason why I don't agree with Tom on his "15+% decline then close the year at 7,700+ on $SPX " call:
We've NEVER had TWO years in a row having a 15+% decline and NOT have been in a bear market in that time (extended run below the 200-WEEK SMA). The only instances:… https://t.co/choLiIqXur
— David Settle, CMT (@davidsettle) May 7, 2026
Is it time to sell when S&P 500 gets overbought? 75 years of data says no.
Forward returns actually improved as RSI moved higher, all the way up to 80, while drawdowns stayed contained.
Above RSI 80 is where risk starts rising, though $SPX spent just 1.1% of the time there. pic.twitter.com/V17951tKz9
— Bluekurtic Market Insights (@Bluekurtic) May 7, 2026
Overbought levels are not a sell signal. It's the opposite.
Nasdaq 100 RSI is above 80 for the first time in over 8 months. Such retests after long pause is bullish.
After similar resets, $QQQ was positive 100% of the time 6 months later, with a median gain of 9%. pic.twitter.com/KzDlxKz2uj
— Bluekurtic Market Insights (@Bluekurtic) May 6, 2026
The S&P 500 gained more than 5% in April 2025.
Historically, when April gains exceeded roughly 5%, May-through-December returns were positive 88% of the time.
That doesn’t guarantee “smooth sailing,” but historically, strength has often continued to beget strength in the stock… pic.twitter.com/pHalZlysln
— SentimenTrader (@sentimentrader) May 6, 2026
That bond yields reversed a secular downtrend in 2022 doesn’t necessarily imply immediate continuation. An extended sideways is also plausible, as in the prior case. Presented in the spirit of open-mindedness. Not a forecast. pic.twitter.com/WnxTDL4CWA
— Mark Ungewitter (@mark_ungewitter) May 7, 2026
Semiconductors are dominating the stock market in 2026:
– Micron $MU +133%
– South Korea $EWY +87%
– iShares Semiconductor $SOXX +68%The Nasdaq barely shows up on the same chart. pic.twitter.com/aM8AOFDKlc
— Phil Rosen (@philrosenn) May 6, 2026
Semis Total Mkt Cap have followed almost perfectly their Forward EPS
What is this non sense ?? So you're telling me stock prices have been going up based on earnings ?!
How dare you not be a bubble Mr Semiconductor! pic.twitter.com/vW3gd2nChV
— Q-Cap (@qcapital2020) May 6, 2026
It continues to be a market of AI vs. not AI.
47 stocks in the S&P 500 are currently at or within 2% of a 52-week high. 31 of them are in AI-sensitive industry groups, or roughly two-thirds. pic.twitter.com/KhTJejSyj3
— Liz Thomas (@LizThomasStrat) May 7, 2026
With the S&P500 and Nasdaq100 hitting new all-time highs again this week, here's the image the New Yorker Magazine is choosing to portray: “Red, White, and Kinda Blue” 👀 pic.twitter.com/Tx3dwdv2g0
— J.C. Parets (@JC_ParetsX) May 7, 2026
Remember when CRE was going to crash the stock market?
What about that ship in the Suez Canal?
Or Evergrande, the Chinese real estate company.
Oh….you know what one I loved? Ebola…nearly a 10% selloff.
See how you forget all these and in retrospect they are dumb?
Yea.
— Michael Antonelli (@BullandBaird) May 7, 2026
Today will be the 2nd consecutive day the S&P 500 $SPY closes at a record high, with more than 4% of its stocks hitting 52-week lows.
Anyone wanna guess the only other time in 100 years this has happened? pic.twitter.com/E3MJYlA42k
— Jason Goepfert (@jasongoepfert) May 6, 2026
$QQQ has surged ~25% in just 25 days. Seriously!
The only comparable moves happened during:
1) COVID, 2) the GFC, 3) 2000-2002 (all deep bear market phases), and
4) late 1999 / early 2000 (the peak of an overheated bull run).Small sample size, but current setup looks more like… pic.twitter.com/JXK2y3wgNV
— Jamil Hreich (@jamhre) May 6, 2026
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FINOM GROUP – RECENT REPORTS
November 30, 2025 – 2026 FULL YEAR MACRO-MARKET OUTLOOK RESEARCH REPORT
April 12th 2026
April 19th, 2026
Priced reflation in Q1, Caught Up with Earnings Trend Starting Q2
April 26th, 2026
May 3rd, 2026
Rip Roaring April Delivers A May Surprise?
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