The Stock Market Is Acting Weird…Here's Why

Added: 2026-05-11

[00:00:00]Good morning traders and investors.

[00:00:01]Steve Ganz here, May 10th, 2026. Happy Mother's Day to all the mothers out there. Anyhow, let's get into this week's market report. So, SPX and our general markets just continue to power higher. We had a breakout here sometime ago. This is about 2 weeks or so ago now. Breakout above 7,000. We consolidated slightly here and then the run continues. It's continuing on increased volume as well as we look at SPX here. So, the volume is high. Our relative strength has been pegged now at the high end for quite some time. We look back over months, we see relative strength hitting certain periods but not staying up there. Right now, that relative strength has pretty much been pinned to the top of the RSI or relative strength indicator chart. So, showing extremely strong markets. So, spy of course is going to look almost exactly the same. It's just the ETF. And on Friday, both of these broke out to all new highs again. Look at the S&P futures, going to be a very similar look. Their bars may look a little bit different because the S&P futures trade round the clock. So, the bars can be a little bit differently configured when things happen in the middle of the night. But, we can see that they end at pretty much the same point. Again, all new highs here as well and those up days volume has been pretty darn solid across all of these. Now, with all of this, the standard expectation is that VIX or volatility is going to be less and in fact, it is. It's not down here to the prior lows in that 14 to 15 range, which is understandable. We still have this whole geopolitical risk out there of what's happening in Iran and the Middle East, Straits of Hormuz, etc. So, there is going to be some level of volatility, but overall this is quite low. We take a look at Nasdaq, the Qs. I think we can all expect what we're going to see there. Really explosive new move up, largely based on earnings. The earnings are coming back very solid. AI has been a big contributor to those earnings.

[00:02:20]What I find really interesting though is that while AI is obviously being used quite a bit more and it's generating more profitability within companies, we also then got our jobs report on Friday and jobs increased. There's always been this expectation that people are going to be replaced by AI. Right now, we're not really seeing that. We're seeing jobs increase at the same time that the earnings reports are increasing. We'll have to see if that remains being true going forward, but for right now it certainly appears to be. Then volatility we're going to see back down not quite at all-time lows, but pretty close to it here for the Qs. IWM also really strong.

[00:03:08]IWM also broke out. This shows the overall breadth of this particular market. In many cases, you get what's called sector rotation where people might roll out of the banks and the industrial stocks and the things that are here in the Russell 2000. They might roll out of tech back into the Russell 2000. We're not really seeing that.

[00:03:30]There is money coming into this market in all of these different sectors and they're all powering forward pretty rapidly. The volatility on the Russell back down here to pretty much what I would call the stable all-time lows as well. And then finally a look at gold and gold is just chopping sideways here after a very large run. It's in what I would call a consolidation mode at this point. So, all indications are that our markets are going to continue powering higher, and then I also like to touch on the fly agonal trade series. How is the fly agonal trade holding up? Because I get that question all the time. These are the latest results. These are all of the trades that I have shared in the alert service from August of 2025 through current. And we did have another winner and another small loser this last week. So, right now, while this trade has been extremely profitable and has done extremely well, this massive market up move certainly causes it some stress.

[00:04:39]Now, anytime you have a theta positive, delta neutral trade, and the markets move massively one way, up or down, and you start going outside of your tent structure, and you have to adjust, you're going to have some stress in those trades. The plus side is that we don't get explosive moves like that very often. Since 2020, we've had a total of seven of them. This being the seventh, this being the largest one of all of them. And the trade is still holding up well, but it does take a little bit of upside stress, and the number of trades that had to be adjusted here moved up a little bit. This had been at 71% of trades did not require adjusting. That's dropped a little bit because some of the recent trades did require being adjusted. The win rate dropped from 94 to 92 because we did have two losers come in, one last week, one this week.

[00:05:42]Again, both small. I think one of them was only, I don't know, $30 or something like that. But, this is the total return over that period of time annualized out 237%.

[00:05:55]This is the month-by-month returns.

[00:05:57]There was finally a losing month here in April. That's because of that explosive up move. So, overall, the fly diagonal continues to hold up extremely well, also. So, if these types of results look interesting to you, I've got two things I want you to do. One, I'm going to put it on the screen right now, a QR code to my Trustpilot page, where my students have shared their experiences, and you can take a look at those. The second thing I want you to do is check out this video right here, because this video is going to tell you a lot more about the whole fly diagonal trade. And if you're interested in learning this trade, how you can go about doing that. That's it.

[00:06:38]We'll see you next weekend, everyone.

[00:06:40]Take care.