WEBVTT 00:00:00.000 --> 00:00:04.000 Hi everyone, Mike Polonoff, MPTrader.com. 00:00:04.000 --> 00:00:17.000 It's May 17, 2026 at about 1235 Eastern Time with a quickie market update ahead of tonight's 00:00:17.000 --> 00:00:19.000 reopening in Australia. 00:00:19.000 --> 00:00:24.000 I have three charts I just want to take you through real quickly. 00:00:24.000 --> 00:00:33.000 First is my hourly E-mini S&P chart, which I think was the last chart I posted on Friday 00:00:33.000 --> 00:00:34.000 before the weekend. 00:00:34.000 --> 00:00:44.000 It showed Thursday's all-time high, 75.40, showed Thursday afternoon's decline, mostly 00:00:44.000 --> 00:00:49.000 big tech, AI company related. 00:00:49.000 --> 00:00:55.000 Broke the dominant trend line on Friday morning, tried to recapture the trend line in the afternoon, 00:00:55.000 --> 00:01:01.000 but failed and rolled over into option expiration and closed on the low. 00:01:01.000 --> 00:01:06.000 I don't know if this was an aberration because of option expiration that triggered the selling 00:01:06.000 --> 00:01:14.000 pressure at the end of the day, or whether it was risk off, something to do with protection 00:01:14.000 --> 00:01:22.000 over the weekend, hedge selling, portfolio insurance, long liquidation to protect positions, 00:01:22.000 --> 00:01:29.000 protect portfolios over the weekend when it looked like perhaps war drums would start 00:01:29.000 --> 00:01:37.000 beating more loudly in the Mideast, which based on what I'm reading this morning is 00:01:37.000 --> 00:01:38.000 exactly the case. 00:01:38.000 --> 00:01:43.000 So we don't know how that will affect the market tonight, or oil prices for that matter. 00:01:43.000 --> 00:01:52.000 But presumably all this military equipment that's getting flown around will probably 00:01:52.000 --> 00:01:57.000 goose oil prices higher and the E-mini S&P will be lower tonight. 00:01:57.000 --> 00:02:01.000 That's the first chart, and that's the setup. 00:02:01.000 --> 00:02:08.000 The second chart I want to show you is the McClellan Oscillator chart. 00:02:08.000 --> 00:02:13.000 The McClellan Oscillator broke down last week below the zero line and just kept going 00:02:13.000 --> 00:02:18.000 into a moderately negative Friday close. 00:02:18.000 --> 00:02:26.000 In and of itself, this doesn't tell us much because it came from overbought, roughly, 00:02:26.000 --> 00:02:27.000 and hasn't gotten to oversold yet. 00:02:27.000 --> 00:02:33.000 The question is, if it does get into oversold territory, how long will it spend there? 00:02:33.000 --> 00:02:38.000 Because it spent a good two weeks in the second half of March under pressure, that 00:02:38.000 --> 00:02:46.000 is price pressure in the S&P, before it set up to reverse to the upside. 00:02:46.000 --> 00:02:50.000 So there's the second chart, but what I want to show you really is a year ago. 00:02:50.000 --> 00:02:55.000 This was the pattern or the setup a year ago where the McClellan Oscillator broke the zero 00:02:55.000 --> 00:02:56.000 line. 00:02:56.000 --> 00:03:04.000 It was negative 34, which means we're a little more negative or more oversold or getting 00:03:04.000 --> 00:03:08.000 more negative towards oversold now. 00:03:08.000 --> 00:03:14.000 This is what this negative reading amounted to. 00:03:14.000 --> 00:03:19.000 This little blip down before the bull market resumed. 00:03:19.000 --> 00:03:25.000 Maybe this is not much of a blip on the downside, but let's see what happens. 00:03:25.000 --> 00:03:32.000 I want to show you something else that's, I think, pretty interesting. 00:03:32.000 --> 00:03:43.000 This is the hourly S&P chart, the hourly cash S&P, the one that's shown in this chart. 00:03:43.000 --> 00:03:46.000 So this little up move and this little squiggle is right here. 00:03:46.000 --> 00:03:54.000 This little squiggle occurred over a five-day period from Monday, May 19th, 2025 to Friday, 00:03:54.000 --> 00:03:56.000 May 23rd, 2025. 00:03:56.000 --> 00:04:04.000 It amounted to just 3.4% correction before the bull market took off again. 00:04:04.000 --> 00:04:05.000 That's what you see here. 00:04:05.000 --> 00:04:07.000 Well, what about now? 00:04:07.000 --> 00:04:11.000 Let's shift this over so I can show you now. 00:04:11.000 --> 00:04:17.000 So here's the March low, a 10% correction off of the all-time high in February and then 00:04:17.000 --> 00:04:28.000 that ripper of a rally, the 20% to the all-time high in the cash S&P of $75.17. 00:04:28.000 --> 00:04:30.000 This is a little blip so far. 00:04:30.000 --> 00:04:33.000 This is the McClellan oscillator going negative. 00:04:33.000 --> 00:04:37.000 This is the representation on this chart of the little blip. 00:04:37.000 --> 00:04:46.000 Well, if this little blip approximates this move, then the cash S&P will be going down 00:04:46.000 --> 00:05:00.000 to 3.4% at $72.61 and it closed at, so this is about 140, 150 points lower to approximate 00:05:00.000 --> 00:05:04.000 a year ago, the year ago experience. 00:05:04.000 --> 00:05:11.000 Who knows if that's going to be the case, but the setup is for, I think, our expectations 00:05:11.000 --> 00:05:14.000 to be 3.4%. 00:05:14.000 --> 00:05:26.000 One more thing, let's go back to the futures and $72.90, $73.00 would be approximate 3.4% 00:05:26.000 --> 00:05:32.000 on the futures and if it breaks that, then 74.5% correction. 00:05:32.000 --> 00:05:36.000 All right, so let's just leave it there. 00:05:36.000 --> 00:05:43.000 I just want to show you the setup that the McClellan oscillator is telling us that it 00:05:43.000 --> 00:05:45.000 probably has lower to go. 00:05:45.000 --> 00:05:52.000 The big $64,000 question is if we're in the process of doing one of these or doing one 00:05:52.000 --> 00:05:54.000 of these. 00:05:54.000 --> 00:05:59.000 If it's one of these, then we have some serious selling pressure ahead and I think we're going 00:05:59.000 --> 00:06:02.000 to find out much sooner than later. 00:06:02.000 --> 00:06:05.000 All right, this is Mike Polonoff, thanks for watching. 00:06:05.000 --> 00:06:11.000 Come to the site to see our intraday updates, mptrader.com, over and out.