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Republic Research / ARTICLE

Let me catch you up on where things stand heading into the week. Last week was rough for the broader market. Hot CPI, hot PPI, bond yields ripping higher, and our momentum readings were showing real deterioration underneath the surface. The mega caps were holding things together but the average stock was getting sold pretty hard. The Russell was cracking. It felt like the air was coming out. This morning is a different story. Our readings flipped from negative in the pre-market to positive at the open. The buying is broad. The number of names in breakdown territory dropped from over half the index on Friday to a handful this morning. The longer-term readings on small caps haven't fully healed. But the daily pressure has reversed hard and if this holds through the afternoon we go into tomorrow with a much better setup than we had going into today. Now, the stuff we've been flagging hasn't gone away. The 30-year is still above 5.1%. The 10-year hit 4.6% last week. Bitcoin dropped from 82,000 to 77,500. Gold is at a six-week low. The dollar ripped 1.5% higher on the week. When bonds, crypto, and metals all sell at the same time while the dollar runs, that's not people rotating between asset classes. That's leverage coming out. And the Fed has been quietly pulling back its reserve management purchases over the last several weeks. From 40 billion down to 25, now down to 10. That's real support that's no longer there. Think of liquidity like lift under an aircraft. When it's flowing, everything is smooth. You get comfortable. Maybe a little drowsy. Let your positions ride higher. But when it thins out, the air gets choppy. Pockets open up underneath you. Everybody on board tightens up. The pilot turns on the seat belt light. That's kind of where we are. The support that was keeping the ride smooth is being pulled back, and the question is whether the turbulence stays manageable or someone on board is in a seat they shouldn't be in. NVIDIA reports after the close tomorrow. June is stacking up with OPEC, the G7, Warsh's first FOMC meeting, and triple witching all landing in the same window. This morning looks encouraging. But the backdrop is different than it was a month ago.

Published May 18, 2026Updated May 18, 20265 min read
Let me catch you up on where things stand heading into the week. Last week was rough for the broader market. Hot CPI, hot PPI, bond yields ripping higher, and our momentum readings were showing real deterioration underneath the surface. The mega caps were holding things together but the average stock was getting sold pretty hard. The Russell was cracking. It felt like the air was coming out. This morning is a different story. Our readings flipped from negative in the pre-market to positive at the open. The buying is broad. The number of names in breakdown territory dropped from over half the index on Friday to a handful this morning. The longer-term readings on small caps haven't fully healed. But the daily pressure has reversed hard and if this holds through the afternoon we go into tomorrow with a much better setup than we had going into today. Now, the stuff we've been flagging hasn't gone away. The 30-year is still above 5.1%. The 10-year hit 4.6% last week. Bitcoin dropped from 82,000 to 77,500. Gold is at a six-week low. The dollar ripped 1.5% higher on the week. When bonds, crypto, and metals all sell at the same time while the dollar runs, that's not people rotating between asset classes. That's leverage coming out. And the Fed has been quietly pulling back its reserve management purchases over the last several weeks. From 40 billion down to 25, now down to 10. That's real support that's no longer there. Think of liquidity like lift under an aircraft. When it's flowing, everything is smooth. You get comfortable. Maybe a little drowsy. Let your positions ride higher. But when it thins out, the air gets choppy. Pockets open up underneath you. Everybody on board tightens up. The pilot turns on the seat belt light. That's kind of where we are. The support that was keeping the ride smooth is being pulled back, and the question is whether the turbulence stays manageable or someone on board is in a seat they shouldn't be in. NVIDIA reports after the close tomorrow. June is stacking up with OPEC, the G7, Warsh's first FOMC meeting, and triple witching all landing in the same window. This morning looks encouraging. But the backdrop is different than it was a month ago.