Following are my personal comments on specific markets and issues. I chart markets for a hobby and my comments are the result. They are not recommendations to buy or sell anything and should not be thought of as such. They are for entertainment purposes only so enjoy.
Please remember, the following is pure speculation based only on my experience and chart patterns. "Every sunken ship has a room full of charts."
David Bruce Edwards
May 8, 2026
Note - I got a new wider screen monitor and when I look at this web site with the screen size in full, the site spacing does not come out properly. By making the window less wide all of the text and graphics slide into place. Perhaps you are having the same experience. DBE.
As usual, I will show pictures and graphs found on Zerohedge.com, Sentimentrader.com, which include the Seasonality charts and charts made on Barchart.com. I will also mention "cycle low timing bands" suggested by another market website to which I subscribe, Cyclesman.com.
The Administration and Wall St. want you to know that the war will be ending soon. Oil will go back to $50, inflation will disappear and the rest of the stock market will catch up to semiconductor stocks.
Before placing bets, it might be wise to wait until the price of oil breaks some previous lows. To the left is a daily bar chart of WTI domestic Crude Oil. The data used is from the most actively traded crude oil futures for that day. June futures are the current month but when we started bombing, March and April rose the most and farther out months had a muted reaction because traders believed the war would be over in weeks. The prices on this graph are from those nearby contacts. Crude traced out a series of downs and ups that chart wonks fear is a contracting triangle (pennant). The chart textbook calls for a final spike to new highs after this kind of formation. If we trade below the "c" point at $78.79, it will invalidate the triangle interpretation.
With the end to the war taken as a done deal and oil off of its highs, traders paid more attention to inflation and employment data.
On April 30th we got "The Fed's favorite inflation indicator - Core PCE (left side, green line). It rose 3.2% annually. The headline PCE (blue line), which includes food and energy rose 3.49%. During the last 12 months personal spending (right side, red line) increased by 5.69% with income up 3.73% (green line). The difference is coming from a draw down in savings and increased use of debt to maintain lifestyles. Investors liked these numbersb ecause the Core reading was close to estimates and the reason for the high Headline number was just gasoline.
March Durable Goods Orders, minus transportation (Boeing), rose 0.9% with the year over year reading at a very healthy 7.62%. Orders for information processing equipment related to AI are through the roof as shown by the blue bar on the right side graph.
March Job Openings fell to 6.866 million from 6.922 million a month earlier. According to official statistics there were 373,000 more people looking for work than available positions. This is a flawed statistic because the jobs offered might require qualifications that applicants don't have. The drop in available jobs pointed to a softer jobs market but within the same JOLTS report was the number of New Hires and it rose by 655,000 jobs (right graph). There was less talk about a weak labor market after that print.
The green (S&P) and blue lines (ISM) on the left side graph show the results of surveys of purchasing managers in the services sector. Both came in softer than expected. New orders fell and costs rose. New home sales(right side, red line) were up 7.4% in March and 3.3% year over year. The median price of a new home fell from $407,000 in February to $387,000 in March which is why sales increased. The average price of new homes sold was $503,100, far above the median price due to the sale of a small number of super expensive homes.
New Claims for Unemployment Benefits came in at 200,000, continuing the long streak of low layoffs. Continuing Claims fell to 1,766,000 (right).
According to the BLS Establishment survey, the U.S. economy added 115,000 jobs last month (left). Most estimates were in the 50,000 to 70,000 range. The household survey which gets its data from calling homes around the country, fell by 226,000 jobs (red line, upper right graph). Directly to the right is the Birth/Death model showing monthly statistical adjustments to the raw employment data. In April, the model added 391.000 jobs. Does this addition reflect reality or is in only on a spreadsheet?
In the last few weeks a number of high tech and crypto currency companies announced large layoffs, blamed on AI. McDonald's, Shake Shack, Planet Fitness and Zoetis (drugs for pets) all fell after disappointing earnings or guidance that warned about a slowdown in consumer spending. Some parts of the economy are doing very well but consumers are spending less than indicated by the good jobs and manufacturing statistics.
Just because the current graphs of SMH and Advanced Micro look like the daily graphs of the stock market in 1928 into 1929 and the weekly bars of the NASDAQ Composite going into the dot.com bubble is no reason to suggest caution. In this case, I am like an expressionist artist, throwing paint on a canvas and letting each observer create their own "meaning" from the images presented.
Some market measurements are still below recent peaks because they are not as heavily weighted with semiconductor and AI build out favorites.
Most assets are keying off of Oil prices or the Semiconductor stocks. Analysts will talk about sector fundamentals but if your trades are moving up and down with either of these, you need to know. In the case of semiconductor stocks, I heard multiple analysts say that if they sell off, it will allow other stock market sectors to catch up. Given the recent correlation of movement, it is more likely that a lot of other things will sink with the semis if they top out.
On the left is a graph of the daily closing prices of Intel and Caterpillar. Both are spiking higher on AI mania. Caterpillar is 11.14% of the Dow Jones Industrials and accounts for a major part of its recent up move. Without CAT, the Index would be far behind the NASDAQ and S&P 500. On the right is a graph of the daily closing price of gold and SCO, an inverse ETF on the price of oil. SCO goes up when Oil goes down. Gold rose when the war started then began to trade opposite Oil. Gold can be sold to pay for higher energy costs or to fund the budget of oil exporters who are trapped by the blockade. These countries own stocks and Treasury bonds too so the longer it goes on, the greater the risk that other assets will be sold to cover expenses. If one Sovereign Wealth Fund starts selling, others will join.
If you think you are saved from an AI bubble by investing in smaller Russell 2000 type companies, look at the graph of Micron Technology on the left. If anything, the Russell 2000 is the weaker player. On the right is the Russell 2000 and SLV, the silver ETF. Are you really diversified with silver?
If you follow momentum and breadth statistics or watch industry groups that led in previous bull markets, the current setup mirrors markets that rose over the next 3,6 and 12 months in the past nearly all the time and you remain fully invested.
My graph of the weekly closing price of the S&P 500 versus its 40 week moving average is in "red star" territory so I am cautious. Six weeks ago I flagged the S&P 500 daily graph for forming an expanding triangle (a,b,c,d,e) which would lead to a final enthusiastic up move. The form of the advance should take five waves. Often, wave three is extended and waves one and five are around the same length. If reality follows art, then we are close. The chart patterns of semiconductor leaders look a lot like a couple of other infamous rallies that did not end well and at the same time, investors have more of their assets invested in stocks than at any other time in history.
Interest rates rose over the last two weeks. At one point, yields on 30 year bonds hit 5%. The blue line on the Yield Curve graph is the latest. Manufacturing is doing well but it is fueled by defense spending and the AI build out, both of which are funded by debt. The war is costing billions of Dollars and consumers are faced with higher gasoline prices. Anything and everyone who has to travel or be shipped is looking at higher costs. The Fed kept rates steady on overnight lending but some of its members are leaning toward raising rates if inflation continues to rise. On the right is a graph of interest rates on a ten year Treasury Note. This update started off with a graph of crude oil which has a similar coiling pattern. Oil's moves started in late February. The Ten Year graph is taking years to play out. If it follows the textbook, rates will pull back slightly before spiking higher. That means that your bond portfolio will sell off. Interest rates always go up during wars. Hopefully, reality defies chart book drawings and rates retreat.
Platinum and Palladium are still in the clutches of Gold. Above are 4 hour bar charts of the metals and you can see how closely correlated the ups and downs are. The huge oil refineries in the Middle East use thousands of troy ounces of platinum to convert crude oil into gasoline. If Iran starts blowing them up, that platinum could be lost for years, reducing the above ground supply. Some of it is leased from large financial institutions that have metals trading departments. This could create a short-term squeeze on prices.
Above are six month graphs of the U.S. Dollar Index and the Japanese Yen. Despite constant predictions of the death of the Dollar, it stays alive. Zerohedge.com posts results of government debt auctions for notes and bonds. The bid to cover ratios and the percent of debt bought by foreign entities is still decent. Domestic demand for some of the note and bond issuance is also strong. Weak auctions would drive rates up and warn currency traders to get out of Dollars. Last week, the Bank of Japan intervened in the currency market, buying Yen and selling Dollars. Japan carries a debt load that is much higher than ours in terms of its GDP. Rates are kept artificially low. There is a saying in the markets - You can control your interest rates or you can control your currency but you can't do both. Japan is trying to control both.
Charts of the week -
If you were reading this update in 2018 you know that I started writing about coffee. Prices were falling below the cost of production. They dropped below $1 a pound in 2019. At the time, it was estimated that growers needed at least $1.20. The weather in coffee growing areas and especially Viet Nam had been great. Then, drought hit Brazil's coffee growing region and coffee was off to the races. From its high, bulls can see a simple a,b,c correction. The right side graph shows the recent trading and the market looks like it is tracing out a contracting triangle, just like note yields and oil but in the other direction. If reality follows art then coffee will spike lower, towards $2.50 then reverse for another major up move.
Why would coffee prices rise again?
Bad weather. Other crops will have problems too.
Gasoline and Diesel Prices (heating oil) are squeezing consumers. Is there a shortage of oil or gasoline in the U.S.? No. Crude Oil in storage, aside from the Strategic Reserve is around 1% above its five year average for this time of the year. Gasoline is 4% below which is not a crisis. Distillates, which include heating oil, diesel and Jet are 11% below. For much of the past few years distillates were 10% to 20% below the five year average and prices were a lot lower. In the last two week's the government released 7 million then 5 million gallons of crude into the system. We are exporting record amounts of crude and diesel. According to a Bloomberg energy specialist, tanker loadings of crude are at the same levels they were before the war. The Crude is coming from the U.S., Brazil, Guyana and other places outside of the Persian Gulf. Who will suffer most in the U.S.? California depends on imports of crude and refined products. S Korean refineries usually supply some of California's needs. S Korea gets most of its oil from the Persian Gulf so that source is gone. New England depends on imports of heating oil and diesel from Europe. Before the Ukraine war, Russia was a big supplier. Those sources are gone. I live near Boston and am worried about my heating oil costs this winter. For much of the world, the war against Iran is a disaster. Diesel and gasoline are unavailable in some places and everyone's disposable income is diminishing. The cost to truck anything is going through the roof. Fertilizer prices are so high that farmers can't buy enough. The Middle East is a major producer of sulfuric acid that is used in base metals separation and other industrial processes. Things get worse and worse every day the Straits are closed.
Stocks - If you can forget about the closure of the Straits and the war in Europe, everything is great. The momentum and participation is bullish. If Meta, Google, Oracle, AMD, Nvidia and Microsoft are all investing in each other then the upside is limitless. After all, these are smart guys and they would not be borrowing billions of Dollars to build data centers if they were not sure that they could repay the debt and make a fantastic profit. My guess is that we make a short term top in the next few sessions.
Ukraine has been sending drones into Moscow and repeatedly hitting oil refineries hundreds of miles inside of Russia. I would not be surprised to see Russia turn much more aggressive in Ukraine to end the war on their terms.
Bonds - Hyper scalers are borrowing hundreds of billions of Dollars. Our Federal Government borrows over 7 billion Dollars each business day to support social programs and the industrial policy that is fueling the stock market rally. Last week, I heard a municipal bond analysts say that states, cities and towns will borrow record amounts this year. Everyone needs money. Rates should go up (your bond portfolio down.)
Dollar - The world owes Dollars. I don't expect anything dramatic. If hostilities resume in Iran or my prediction about Russia comes true, wealth will flee to the Dollar.
Gold and Silver - Lately, gold is trading opposite oil. With no money from oil, producers are likely to start selling assets including gold.
Commodities - I like grains and coffee. This isn't just about the war. It is about weather,
Oil -I check every couple of hours for news on negotiations with Iran. As of Saturday afternoon there is nothing. I am worried that oil traced out a contracting triangle and the next move is a final spike up. Hopefully, something else happens. A fire at a 190,000 barrel per day oil refinery near New Orleans on Friday is not going to help gasoline or diesel prices on Monday.
Unneeded Commentary - Anacin Pain Pills, Frank Sinatra, the Animals, AI and the new Silent Generation
Here is the link to one of the most memorable TV commercials in the 1960s. At was for Anacin, a popular pain killer. Paste it to your browser and watch so that you can understand the rest of the update.
https://www.youtube.com/watch?v=uZiwBp4H0pc
It spawned countless routines on comedy shows and everyone was talking about it. It came out in between the transition between what is referred to as The Silent Generation and Baby Boomers. The memorable line - "Mother Please! I'd Rather do it Myself!" was a preview of what was coming as younger people rejected their parents' lifestyles. You can read about the generational divide in The Fourth Turning is Here by Neil Howe. The generation that fought in World War II was a Crisis Generation that survived a major upheaval and created a new order and the consensus surrounding it. The next generation (people born between 1925 and the war) inherited the order and expanded on it by building out sets of rules, behaviors and bureaucracy. They packed churches, PTA and town meetings and voted in all elections. The children of the Crisis Generation, the Baby Boomers, saw the order and rules as limiting, stifling and not allowing for self expression. Frank Sinatra's "I did it my way." expressed this in a positive form. The Animals "It's My life" in a less positive fashion. "It's a hard world to get a break in. All the good things have been taken." Now, workers are being told that they have to use AI, a new kind of Mother, that always Knows Best. Where is the "Mother, I'd rather do it myself!" in the younger generation. I don't use any AI when I write this update. They joy in doing it is to "Do it My Way" even if it is flawed, has typos and is wrong on what happens over the next two weeks.
According to Neil Howe, we are still in the Crisis Generation while promoters of AI want to make us all Silent Generation people who accept that "All the Good things have been taken" because a computer is smarter than you. If the younger generation has any guts it just won't take it. It will be like a tube of toothpaste. If you squeeze at one end, something will emerge from the other. If they have to put up with it at work then watch for some kind of acting out and rebellion against the Agentic world in people's personal lives. Flawed things will be favored and memes showing workers giving the finger to their cell phones and computers will go viral. And no, I don't want CoPilot to review this update and make suggestions.
Best of luck,
DBE