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The Dow Transports and Dow Utilities both triggered major sell signals in May when their 50-day moving averages fell below their 200-day moving averages… known by some as a “Death Cross.”

Market technicians continue to argue that a bull market peak is unlikely to form with the majority of U.S. stocks (and global ones, for that matter) still participating in the new highs of the blue chip indexes.

It now goes almost without saying that whenever the stock market moves to a new cycle extreme, so does the MTI’s Intrinsic Value category. In late May, this reading dropped below –400 for the first time in this bull market, and is now within 150 points of its 2007 extreme.

It’s generally a bad idea to roll out new valuation readings that one doesn’t fully understand late in a cyclical bull market. But we’re going to do it anyway, recognizing that a similar practice proved to be the undoing of dozens of fund managers and Tech analysts at the turn of the millennium.

Cable & Satellite, Education Services, Human Resources & Employment Services

Last year seemed to cement the view that stocks have entered a new secular bull market, and today we’re not going to offer our dissent—what with the S&P 500 trading about a third above its 2000 and 2007 “Twin Peaks”.

Our “Early Cyclicals” composite continues to perform so well—and at such a late stage in the market cycle—that we should probably consider changing its name. This group, which consists of retail, housing, and auto-related industries, is up 29% in the last eight months after stalling out for the first three quarters of 2014. Its “Late Cyclical” counterpart is up just +5% over the same time frame.

Despite record low mortgage rates and pressure to re-loosen down payment and lending requirements, single family housing starts have yet to recover to levels consistent with even the average recession trough.

Even though the ten EM sectors are growing at a much stronger pace than corresponding U.S. sectors on the Top-Line, only a small margin exceed the U.S. in terms of EPS growth.

Net inflows turned into net outflows as investors deem the spread cushion inadequate.

The “cash on the sidelines” is a Supply/Demand argument that we’ve struggled with even in the most bullish of times; every purchase of a security is matched with a sale. But even taking the argument at face value, current holdings of retail investors and mutual fund managers suggest that the cash left the sidelines long ago.

The second month of Q1 earnings reports registered an Up/Down Ratio of 1.27. Following the theme from last month, this “two-month” score is well below average.

Nudged higher by Small Cap outperformance in May, our premium is little changed month-over-month and remains in its new 5-10% habitat.

Small Cap Growth stocks were the clear outperformers in May, up almost 4%. Growth stocks are still in favor when comparing YTD figures, with the performance gap especially prevalent in the Small and Large Cap spaces.

Momentum and Sentiment bounced back in May, while Value and Quality struggled.

S&P 500: Yet Another Record High Close In May

The Major Trend Index dropped 0.02 to 1.11 in the week ended May 22nd, triggered mainly by a 36-point decline in the Supply/Demand category. While the MTI’s cushion relative to its 0.95-1.05 neutral zone has shrunk from a late-April high of 1.20, it continues to support a bullish near-term case for the stock market. Both the Core and Global Funds remain positioned with net equity exposure of 61%.

The Major Trend Index dropped 0.03 to 1.13 in the week ended May 15th, led by losses in the Momentum/Breadth/Divergence and Supply/Demand categories. The S&P 500 closed at new bull market highs in three of the last five trading days, but the breadth and leadership trends underlying those highs are more consistent with a tiring market up leg than a sudden acceleration higher. Still, the combined evidence is enough to keep us postured with net equity exposure of 61% in the Core and Global Funds.

The Major Trend Index was unchanged at a moderately bullish reading of 1.16 using data for the week ended May 8th, with none of the five component categories recording a weekly change of over 24 points. Both the Core and Global Funds are positioned with net equity exposure of 61%, unchanged from the previous week.