The Trading Post | 05.01.26

Good morning,

Wall Street kicks off May near record highs after April delivered its best rally since 2020, tech titans are still dragging the tape around like an overcaffeinated intern, Apple and Caterpillar helped push the S&P 500 through 7,200, sticky inflation is keeping Fed-cut hopes politely handcuffed, and strategists are upgrading equities while also warning everyone not to buy blindly at highs. Very helpful. Very Wall Street.

Let’s jump in.

Yesterday’s Post-Market Performance

As of 04.30.26 market close.

Market News

• Wall Street kicks off May at record highs after April delivers the best rally since 2020: The S&P 500 gained roughly 10% in April while the Nasdaq jumped about 15%, so yes, the tape is hot — and possibly one bad headline away from needing an ice bath. For traders, watch for mean-reversion setups in extended leaders, or clean pullback buys to the 10/21-day EMAs on SPY and QQQ. TS2

• S&P 500 clears the 7,200 zone as momentum carries into May: Prior all-time highs and Thursday’s closing range near 7,200 now become key pivot areas. Break and hold above that zone favors continuation; fail there and we may get the classic “new month, new bagholders” routine. TS2

• Mega-cap tech keeps whipping the Nasdaq around after earnings: Alphabet, Amazon, and Microsoft showed strong earnings strength, while Meta and Microsoft also dealt with AI capex concerns. In other words, AI is still wonderful — as long as investors don’t look too closely at the bill. Watch post-earnings drift setups, especially around gap highs/lows and the 5/10-day moving averages. TS2

• Alphabet remains a relative strength leader after a monster April: GOOGL’s sharp move keeps it on the momentum radar, but after a run like that, traders should separate clean breakout volume from exhaustion-gapped nonsense wearing a fake mustache. Watch prior earnings-gap highs for continuation or failed-breakout reversals. TS2

• Apple pops and Caterpillar rips nearly 10% on strong earnings: AAPL and CAT are acting like a “megacap plus real economy” risk-on barometer. Buyable pullbacks are more attractive if earnings-gap midpoints hold; failure back into pre-earnings ranges would be a warning flare for bulls. CNBC

• Macro stays mixed as Q1 GDP misses while PCE inflation remains sticky: Slower-than-expected growth and firm inflation are not exactly the “soft landing” smoothie bulls ordered. This setup favors range trading, VWAP fades, and defined-risk options instead of heroic breakout chasing into headline risk.
  Guru Focus

• Fed-cut hopes remain checked by sticky inflation: Rate-sensitive sectors like financials, REITs, and high-multiple growth may stay jumpy around data and Fed commentary. Use relative strength versus SPY/QQQ to find clean candidates instead of guessing which Fed sentence the algos will scream about next.
  Guru Focus

• Strategists upgrade equities and downgrade cash as AI optimism stays alive: That sounds bullish, but with the S&P at highs, selectivity matters. Favor high-volume breakouts in AI/software leaders while using index or sector ETF puts as hedges, because confidence is nice — risk management is nicer. Investing

• Cross-asset volatility is flashing yellow: Equities may look calm while FX, rates, and commodities move underneath the surface. That divergence can precede equity volatility spikes, so SPX put spreads or VIX calls may be worth watching if protection stays cheap. Investing

• Futures traders get a clean early-May test: If ES holds prior breakout levels and the 20-day moving average, higher lows support the long bias. If those levels fail, the playbook shifts from “buy the dip” to “short the rip before CNBC starts naming new bull-market mascots.” Investing

Earnings We’re Watching

• Chevron Corporation (CVX) - Friday (BMO) 

• Colgate-Palmolive Co. (CL) - Friday (BMO) 

• Dominion Energy, Inc. (D) - Friday (BMO) 

• Estee Lauder Companies, Inc. (EL) - Friday (BMO) 

• Exxon Mobil Corp. (XOM) - Friday (BMO) 

Trade Ideas

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Daily Moment of Zen

Why It Matters:

This quote is the market’s polite way of saying, “Cheap is not a strategy.” A stock being down 40%, 60%, or 80% from its highs does not automatically make it a bargain. Sometimes it means the market is wrong. Sometimes it means the business is broken. And sometimes it means you’re standing under a falling piano because the price tag looked attractive.

Traders love anchoring to old highs because it feels logical: “It used to be $100, now it’s $40, so it must go back.” Lovely story. Unfortunately, the market does not care where your imagination thinks fair value lives. Stocks do not owe anyone a round trip.

The better question is not “How far has it fallen?” It’s “Has the trend changed?” Look for actual evidence: reclaimed moving averages, higher lows, volume confirmation, relative strength, and clean support. Until then, a beaten-down stock is not a discount rack. It’s a crime scene with a ticker symbol.

For active traders, this is especially important near market highs. Weak names that are still buried while the indexes are ripping are usually weak for a reason. Don’t buy damage just because it looks dramatic. Wait for structure. Trade confirmation. Let someone else catch the knife and explain later how it was actually a long-term investment.