Last year, we told you something big was coming.
Not a crash prediction. Not a doom headline. The opposite, actually.
We said the market had just fired one of the rarest bullish signals in modern market history — and that the next 12 months were going to be some of the best investors had seen in years.
We circled May 12, 2026 on the calendar as the day that window would officially close.
This week, the clock hit zero.
First, Let’s Talk About What Just Happened
The S&P 500 gained 32% during that window. The Nasdaq 100 rallied 36%.
But inside our portfolios at TrendLabs, it was even better than the indexes suggest.
In The Primary Trend, we closed Sandisk (SNDK) for a 103.5% gain. United Microelectronics (UMC) followed at 100.7%. Two separate trades. Two doubles.
In The Divergence, Kodiak Sciences (KOD) went from $14.64 to $42.53 – a 190.5% gain over six months, right in the heart of the window.
Options trades on TORM (TRMD) and Haliburton (HAL) both doubled in a matter of weeks.
And those are just a few of the highlights.
That’s what it looks like when the market’s running on a full tank. Breakouts hold. Positions work. The environment rewards you in a way it simply doesn’t at other times.
We said last May that history was pointing to one of the strongest tailwinds investors ever get.
It was.
What the Signal Was Actually Based On
Every single day, our quantitative analyst Grant Hawkridge runs the same check on all 500 stocks in the S&P 500.
He does this with one question in mind: How many of them just hit a new high for the month?
Most days, only a handful do. That’s normal.
Occasionally something unusual happens. More than half of all 500 stocks hit a new monthly high on the same day – all at once, across different industries, different sectors, different market caps.
That’s not a few stocks dragging the index higher. That’s a wave. Money flowing into the market broadly, all at the same time.
We call it a “breadth thrust.”
Grant tested every instance going back 20 years and found something that stopped us in our tracks. There’s a specific threshold – 55% of stocks hitting new highs simultaneously – where the market essentially flips from unpredictable to predictable.
Below 55%, outcomes are random. Sometimes you rally, sometimes you crash.
Above 55%, the next 12 months have never produced a negative return. Not once. Zero exceptions.
Think of it like water. Water freezes at exactly 32 degrees.
There’s a precise threshold where the rules change completely.
The breadth thrust works the same way. Below 55%, you get noise. Above it, you get a bull market.
And since 2005, essentially all of the S&P 500’s cumulative net gains have come during these windows. Outside of them, the market went basically nowhere – and actually lost money in aggregate.
That’s not a small edge. That’s almost the whole game.
The Clock Just Ran Out
The window expired this week. Quietly, too.
No emergency headlines. No violent selloff. No dramatic moment people will be talking about years from now.
Just the expiration of one of the strongest historical tailwinds stocks have seen in two decades.
That’s exactly what makes it worth paying attention to.
On the surface, everything still looks fine. Prices are near the highs. Plenty of stocks continue acting well.
But here are the historical facts that matter…
- 2008 happened with no active thrust window.
- 2020 happened with no active thrust window.
- The selloff in early 2025 happened the same way.
It’s not mystical. When most stocks are climbing together, momentum feeds itself.
When that unity breaks, so does everything else.
What Has To Happen Now
Just because the window closed doesn’t mean the bull market is over.
It means the market has to prove it can keep going without that tailwind.
What I want to see is simple: more stocks making new highs together and money flowing broadly across sectors instead of crowding into the same handful of names.
The same kind of wave that fired the signal in the first place. If that happens, the clock resets. The window reopens. We’re back in business.
If instead the rally keeps narrowing – fewer stocks leading, more stocks struggling, the indexes propped up by a shrinking group of giants – the market just lost its strongest historical advantage at the worst possible time.
The easy money was made while the window was open.
That doesn’t mean stocks can’t go higher from here. It means the environment is no longer as forgiving as it was for the past 12 months.
Pretending otherwise is exactly the kind of mistake this letter exists to prevent.
This Week in Everybody’s Wrong
On Monday, we joined the conversation about AI stocks.
We began with some simple definitions, and from there we weighed the evidence.
Everybody’s talking about them, and everybody’s wrong about AI stocks.
On Tuesday, we looked at the most bearish chart in the world.
As you know, I’ve spent a lot of time studying them over the last couple of decades.
And I’ve learned which ones deserve a closer look.
On Wednesday, we talked about Warren Buffett.
Nobody’s bigger than the trend, not even the Oracle of Omaha.
And people are starting to talk about how the old man may have lost it…
On Thursday, we broke down a piece of legislation that’s creating a lot of headlines.
New rules mean new infrastructure… for the whole financial system.
Indeed, the Clarity Act is not a crypto story.
On Friday, we broke down another big IPO.
The biggest IPOs have been some of the worst trades imaginable.
But that’s not the end of the story, and this is the level to watch for CBRS.
On Saturday, Sam Gatlin shared more of his youthful Midwestern perspective on what has to be the market’s hottest trend.
What does a kid from Kansas know about arms races, artificial intelligence, and where the next big money moves will be made?
Have a great Sunday.
We’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs