There has been a lot of, “this hasn’t happened since…” talk in the market recently. Technology and semiconductors continue to carry the market higher despite some concerning price action in other important areas of the market. Nonetheless, the S&P 500 had one of its best rolling two-month performances in history ending on 5/29/2026. SPX gained 19.49% over that two-month span. Since the S&P 500’s inception in 1957, there have been only nine other times performance has been better than 19.49% over a rolling two-month period (excluding clusters within 30 days). The forward returns are staggeringly strong with the average 1-month forward return north of 5%. Longer-dated timeframes are even better with the average 1-year and 2-year forward returns over 25%.

The market is usually only able to put together these sorts of runs in the short term near a major bottom event. While the recent rally started with the S&P 500 down just over 9% from its all-time high, that is the mildest drawdown from all-time highs on the day the two-month rally started. The only comparable period would be June 1997. A similar rally would take place late the next year, but the SPX was down almost 20% from all-time highs when that rally started, highlighting that the late 90s bull market had wild swings to the upside and downside. Some of the occurrences around major bottoms include early 1975, October 1982, May 2009, and May 2020. Interestingly, this is similar to the rally following the tariff tantrum last year, and that ended up boding well for the market as the S&P 500 is up over 25% over the last year.

Focusing on the trailing 1yr return column, usually the market had not been doing well over the prior year leading into such a strong two-month rally. This is slightly different than the percent from all-time high metric and can be used to add context to the market type at the time. This recent rally was only the second time that the trailing one-year return was positive with the only other time being 1997. That isn’t necessarily bearish either, the market still had another almost three years to run. Although, that is just one other occurrence, so it’s hard to look too much into it. Nonetheless, these face ripping rallies over the short-term tend to be pretty good for both short-term and long-term returns. While there are plenty of legitimate reasons to be worried right now, until we see price action weaken there is not much else to do except to party on.

To open the year, our team did a deeper dive into this idea of “consistency” on any asset’s individual PnF chart. In this case, we studied the idea of avoiding “failed breakouts”, defined by a stock moving back into a positive trend but ultimately falling back lower. More often than not, these failed breakouts came on the back of the stock showing a distinct inability to sustain price action at or above a distinguished previous high, tipping off the astute analyst that the trend break might not be all that convincing. The full article is linked here, for those of you who want a more detailed definition of a “failed breakout” (or maybe just want to check out the “mystery” failed breakout at the end). Today’s feature will discuss some follow-up of our previously flagged failed breakouts, as well as provide a handful of assets that currently exhibit similar technical pictures as we move into June.

The genesis for this entire study in January arose when Nike (the poster child of “failed breakouts”) neared a test of its negative trend line back in January. Around the office, the analyst team then discussed/observed how infrequently the last few trend breaks led to further upside for NKE as it often failed to advance pasted a point of old resistance, commenting that even a positive trend break wouldn’t be enough to “convince” most of us that the stock had turned a new leaf. From there, we started looking at other charts that showed similar pictures over time to see if any patterns emerged. Chipotle Mexican Grill (CMG) (2025), Exxon Mobil (XOM) (2016-2019), Caterpillar (CAT) (2018-2020), UnitedHealth Group (UNH) (2025), and Meta Platforms (META) (2021-2022) all had markings consistent with a “failed breakout” at the time. Even larger indices aren’t immune, seeing the likes of SPX, RUT, etc. display their fair share of examples over the years. Fast forward to 6/3, it turns out that NKE did in fact manage to return back to a positive trend back in February…. Only to quickly turn around move to new lows like clockwork. The chart of NKE below helps provide a visual representation of these failed breakouts over time, for those of you still trying to grasp what exactly these charts look like in practice.

This certainly wont be the case every time…. There are undoubtedly a whole host of trend breaks that are in fact the start of a more defined uptrend, but an asset being able to break past previous highs (in addition to the trend break) seems to be important for setting the “tone” of the new break. The table below breaks down performance since 1/28 for the 27 previous members of our “possible failed breakout” screen described in our prior report. 66% of the names detailed in the report have underperformed the broader S&P 500 over the last few months, by an average of 5.10%. There are, of course, trends that did end up working out (see IRM, which has turned into a perfect 5/5’er) but the wide majority of names continue to exhibit technical weakness.

Of course, most of you don’t particularly care about the failed breakouts from 6 months ago… but more so what S&P 500 names are worth watching for possible false breakouts as we wrap up Q2. Anecdotally, these names could be hit quite hard if broader markets decide to roll over into the back half of the year, so knowing which options might be on thin ice could be important as you “pull the weeds” in your portfolio. Utilizing a similar screen to that from our 1/28 report, we can identify 22 S&P 500 stocks that have similar technical pictures to those that might flag as a “failed breakout” at the time of this writing. Consider fishing from this pond if you’re looking for some short ideas on breakdowns… or maybe take this as a “buyer beware” if you currently have exposure to these names.

We will wrap up today’s commentary with a final word on two other areas that recently exhibited failed breakouts. Bitcoin representative IBIT has moved swiftly back towards 2026 lows after failing to sustain price action around recent highs from the back half of 2025, recently returning back to a negative trend over the last few days. The outlook for bitcoin (or the broader crypto space for that matter) remains bleak as we wrap up Q2. Payment processors, evidenced by ETF IPAY (below) have also moved lower recently, falling back into a negative trend with action on 6/3. The fund has put in a series of lower tops since its 2025 highs, and the failure to sustain action in the upper $40 range confirms the idea that the space has weakened materially. There are certainly comments (outside the scope of this update) on what a weaker payment processor means for the health of the US consumer, but we won’t touch on that here. Remember, when used in tandem with other tools on the platform, like the technical attribute/fund scoring system, noticing important points of support can help you identify which stocks might actually be breaking out…. And which are just a wolf in sheep’s clothing.

Each week the analysts at NDW review and comment on all major asset classes in the global markets. Shown below is the summary or snapshot of the primary technical indicators we follow for multiple areas. Should there be changes mid-week we will certainly bring these to your attention via the report.

Remember, these are technical comments only. Just as you must be aware of fundamental data for the stocks we recommend based on technical criteria in the report, so too must you be aware of important data regarding delivery, market moving government releases, and other factors that may influence commodity pricing. We try to limit our technical comments to the most actively traded contracts in advance of delivery, but some contracts trade actively right up to delivery while others taper off well in advance. Be sure you check your dates before trading these contracts. For questions regarding this section or additional coverage of commodities email james.west@nasdaq.com.

Data represented in the table below is through 6/2/26:

Portfolio View - Commodity Indices

Cryptocurrency Update

Cryptocurrency Video (5:04)

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool click here.

Call

Philip Morris International Inc. (PM) Aug 21 $175 Call

Put

Adobe Systems Incorporated (ADBE) Aug 21 $260 Put

Income (Short Put)

American Express Company (AXP) July 2 $285 Put