In the May 2026 edition of CAPIS’ Monthly Research Briefing, Ed O’Dowd welcomed back Fairlead Strategies founder Katie Stockton to discuss the technical outlook across major asset classes. Stockton emphasized that technical analysis can complement fundamental and macro research by helping investors evaluate trends, manage risk and identify opportunities across markets.
Below is a recap of the discussion.
00:00 — Introduction
O’Dowd introduces Stockton, who explains that Fairlead applies technical analysis across asset classes to help evaluate risk, opportunity and market timing.
02:45 — S&P 500: Secular Bull Market Remains Intact, Though Exhaustion Signals Are Emerging
Stockton says the S&P 500 remains in a secular bull market, though some counter-trend signals are beginning to emerge. A monthly DeMark “13” exhaustion signal has appeared, though monthly MACD and stochastic indicators have not yet confirmed it. She notes that the breakout above 7,000 reduces conviction in a bearish interpretation, and that daily-chart exhaustion signals would more likely point to a short-term pullback than a broader trend change. Stockton also notes that the S&P 500 has already reached a prior measured-move target near 7,500, while a longer-term objective points toward roughly 8,400–8,500 over the next 12–18 months.
05:50 — NASDAQ 100 & Small Caps: Tech Momentum Remains Strong; Small Caps Show Longer-Term Breakout Potential
Stockton says the NASDAQ 100 corrected into the Ichimoku cloud earlier in the year before rebounding sharply to new highs alongside the S&P 500. She describes the rally as “explosive,” though increasingly steep, and says Fairlead does not recommend counter-trend positions against securities at all-time highs despite some emerging short-term exhaustion signals. On small caps, Stockton highlights a cup-and-handle breakout in IWM with a long-term measured-move objective near 310, though she expects 2026 to remain relatively volatile before the secular bull trend potentially strengthens again in 2027.
09:10 — Market Breadth, Sentiment & Volatility: Breadth Is Better Than Perceived, But Leadership Remains Concentrated
Stockton pushes back on the idea that market breadth is broadly weak, noting that breadth reflects participation across stocks while leadership reflects where outperformance is concentrated. She says breadth remains constructive, with the advance-decline line still above the cloud, though leadership continues to be concentrated in growth and technology. The Fear & Greed Index has recovered from bearish territory but is not yet at historically extreme levels, while the VIX suggests another volatility spike could occur within the next few months. Stockton also notes that growth versus value leadership has become more balanced following the Q1 correction.
14:25 — International, Emerging Markets & Sector Rotation: Emerging Markets Improve as Sector Leadership Broadens
Stockton says developed international markets appear positioned for a short-term relief rally versus the U.S., while emerging markets continue to improve relative to the U.S. Japan remains attractive on a rotational basis, while Europe and Switzerland could contribute to developed-market strength. Stockton notes that emerging markets have improved versus the U.S. since early 2025, supported in part by semiconductor exposure in Korea and Taiwan, and says Fairlead generally favors somewhat overweight emerging market exposure.
On sector rotation, Stockton says leadership has broadened beyond technology. Energy remains a notable year-to-date leader, while energy, materials, healthcare and technology remain in favorable rotational positions. She adds that staples and real estate could benefit later in 2026 if markets turn more defensive. Financials, particularly regional banks, remain weak, while healthcare appears deeply oversold and may be positioned for a relief rally. Stockton also cautions that semiconductors have experienced unusually extended momentum conditions.
24:10 — Crude Oil: Oil Momentum Has Shifted Higher, Creating Broader Market Risk
Stockton notes that crude oil’s monthly MACD flashed a buy signal in February, before the recent geopolitical escalation. She says sharp crude rallies have historically coincided with difficult equity environments and describes crude as volatile near term, with support near $89 and resistance near $102. Despite the volatility, Stockton continues to favor long-term energy exposure.
26:25 — Gold, Dollar & Treasury Yields: Gold Momentum Slows While Dollar and Yield Biases Remain Higher
Stockton says gold remains in a longer-term uptrend but has entered a more volatile corrective phase. She believes a short-term low may be in place, with silver clearing its 50-day moving average and supporting a short-term advance. However, longer-term momentum loss suggests a more range-bound environment ahead. Stockton also expects the Dollar Index to hold support and move toward the 100–102 range, while Treasury yields remain range-bound near term despite a longer-term directional bias that remains higher.
30:50 — Bitcoin: A Potential Bottoming Process May Be Underway
Stockton says Bitcoin tends to adhere closely to support, resistance and technical indicators. After reversing lower over the past year, long-term oversold conditions suggest the first stage of a bottoming process may be underway. Support near the high-$50,000s has held, with cloud support in the low-$60,000s looking ahead, though Stockton cautions that rallies remain counter-trend until stronger confirmation develops.
32:55 — Q&A: Breadth, Financials & Regional Banks
During Q&A, Stockton says broader participation alone will not sustain the market if technology leadership weakens. She also reiterates a cautious view on financials, particularly regional banks (KRE), where Fairlead continues to see deteriorating relative momentum.
39:35 — Q&A: Medical Devices ETF (IHI)
Stockton addresses an audience question on the Medical Devices ETF (IHI), which remains in a pronounced downtrend versus both the market and the S&P 500. The ETF is testing important long-term support near $49, and while a DeMark buy signal could emerge soon, Stockton says she would want to see additional confirmation before turning more constructive.
43:45 — Closing Remarks
O’Dowd thanks Stockton and previews the June CAPIS Monthly Research Briefing featuring BCA Research.