June 18, 2026

Another volatile week ended higher as investors celebrated the announcement of a peace deal between the US and Iran and welcomed new leadership at the Federal Reserve. Global markets rallied to start the week after the peace deal was first announced with oil prices briefly dipping below $80 a barrel. Airlines and cruise lines jumped on lower fuel prospects, but a spike in semiconductors, led by strength in Marvel Technologies (MRVL) and Micron Technologies (MU), sent the Philadelphia Semiconductor Index (SOX) up +5.45% and to a new record high. The Dow Jones and Russell 2000 also notched new all-time highs. The tech trade paused on Tuesday ahead of the FOMC ending, but cyclical sectors picked up the slack with the Financial (XLF) and Industrial (XLI) sectors outperforming. The DJIA hit another new high led by gains in Goldman Sachs (GS), Visa (V) and 3M (MMM), while the broader market finished mixed. The Federal Reserve left rates unchanged as expected on Wednesday, but it was a more hawkish hold than what investors expected. Short rates ticked higher with the two-year T-Bill closing at 4.22%, its highest level since January 2025, and equities took a leg lower. Confirmation that both sides were signing off on the agreed upon peace deal Thursday pushed equities higher again, oil prices lower and yields lower to wrap the holiday-shortened week. The major averages nudged higher for a second straight week with Technology (XLK), Industrial (XLI), Financial (XLF), Utilities (XLU) and Materials (XLB) leading the gains, while defensive market groups Energy (XLE), Healthcare (XLV), Communication Services (XLC), Consumer Staples (XLP) and REITs (XLRE) were down more than -2%.

For the period, the DJIA added 362.44 points (+0.7%) and settled at 51564.70. The S&P 500 tacked on 69.12 points (+0.9%) and closed at 7500.58. The NASDAQ jumped 629.09 points (+2.4%), finishing at 26517.93. The small cap Russell 2000 gained 35.78 points (+1.2%) and settled at 2979.77.

Market Outlook: The technical condition of the market is mixed with several indexes posting new record highs, but the technical indicators are showing a slowdown in upside momentum with the 14-day RSI now dropping into the 50's from the 70's two weeks ago. There is also negative divergence in several indexes where the 14-day RSI has not confirmed a move to new highs. MACD, a short-term trend gauge, is negative for the S&P 500 and NASDAQ, but there was a bullish cross for the DJIA. The different indexes are also no longer overbought with stochastics below 70 and the Market Edge/S&P Short Range Oscillator (SRO) finishing the week at +1.77%. The major averages remain above key Moving Averages (MA) which is a positive condition going forward. In addition, the NASDAQ successfully tested and held support at its 50-day MA during the prior week, another plus. The secondary indexes, which include the DJ Transportation Index, small cap Russell 2000 and Philadelphia Semiconductor Index (SOX) were mixed during the period with the transports nudging lower, while the Russell 2000 and semiconductors were higher. The Philadelphia Semiconductor Index (SOX) jumped another +7.3% and is now up +100% since its March low. After spiking above 23 the prior week, the VIX pulled back to the 16 level on Thursday as traders put the Iran conflict in the rearview mirror.

A chart of these indicators can be found by going to the Market Edge Home page and clicking on Market Recap, which is on the right-hand side of the page just below the Second Opinion Status numbers.

Cyclical Trend Index (CTI): The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times.

Currently, the CTI is Negative at -5, unchanged from the previous week. Cycles A and B are bullish, while Cycles C, D and E are bearish. The negative CTI configuration is projected to remain in place into July.

Momentum Index (MI): The markets momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish.

The Momentum Index is Negative at -5, up a notch from the previous week. Breadth was mixed at the NYSE as the Advance/Decline line lost 153 units while the number of new 52-week highs exceeded the number of new lows on each session. Breadth was positive at the NASDAQ as the A/D line added 406 units while the number of new highs out did the new lows on three of the four days. Finally, the percentage of stocks above their 50-day moving average fell to 51.4% vs. 56.1% the previous week, while those above their 200-day moving average eased to 56.2% vs. 57.7% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth was slightly positive with the NYSE Advance/Decline Line, a leading indicator of market direction, only a few units below its all-time high, confirming stocks are under accumulation. The number of new 52-week highs however, showed contraction on the NASDAQ with the index putting up more new lows on Thursday, indicating a narrower segment of stocks leading the tech heavy index higher.

Sentiment Index (SI): Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Negative at -2, down two notches from the previous week.

Investor sentiment eased into negative ground as we saw an increase in the number of bulls in both retail and investment managers. The American Association of Individual Investors survey reversed the drop in bulls from the prior week moving from 30.4% to 36.6% and a similar drop in the bears. The National Association of Active Investment Managers (NAAIM) Exposure Index also saw a jump in bullishness from 79.3% to 92.8%, a three-week high.

Market Posture: Based on the status of the Market Edge, market timing models, the 'Market Posture' is Bearish as of the week ending 05/15/2026 (DJIA - 50,579.70). For a closer look at the technical indicators and studies that make up the market timing models, check out the tables located below.

Industry Group Rankings: What's Hot (9) - What's Not (21): The following are the strongest and weakest Industry Groups for the period ending 6/17/26. Strongest: Technology Hardware, Conglomerates, Industrial Goods and Healthcare Services. Weakest: Agriculture, Paper & Forest Products, Infrastructure and Integrated Oil & Gas. To review all the Industry Group rankings in the Market Edge universe, click on the Industry Group tab.

ETF Center: The top performing ETF categories for the week ending 6/17/26 were: Specialty Technology (+8.16%), Sector- Basic Materials (+6.72%), Growth-Mid Cap (+5.66%), Growth-Large Cap (+4.60%) and Sector-Industrial (+4.26%). The weakest categories were: Commodity-Energy (-11.79%), Sector- Energy (-8.04%), Commodity-Blend (-4.20%), Shorts (-3.44%) and Sector-Consumer Staples (-2.52%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT