Summary
Phil Anderson’s May 13, 2026 Gann email warns of accelerating divergences across cyclical sectors and breadth indicators as the S&P 500 approaches new highs. Three interrelated signals are highlighted: (1) the homebuilder ETF (ITB) topped in October 2024 — echoing the 2005 homebuilder top that preceded the 2007 cycle peak by two years; (2) financial stocks (XLF) are lagging the market and struggling below their 200-day moving average; (3) the NYSE A/D line is not confirming the S&P’s recent push to new highs, with just five mega-cap AI stocks accounting for half of the S&P’s gains since April. Anderson frames these as conditions “approaching significant dates in the real estate cycle.” Portfolio updates include raising the DBA stop to $27.40 and adding Coinbase (COIN) to the short watchlist as a bear flag setup. A note on Rocket Lab (RKLB) — up 30%+ post-earnings — is used to affirm that Mex Pete patterns identify accumulating stocks early.
Key Claims
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): “Market peaks at key turning points in the real estate cycle are often preceded by diverging price action in cyclical sectors of the stock market.” — Phil Anderson — confidence: high
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): iShares US Home Construction ETF (ITB) made its high in October 2024 — 18+ months before present, echoing the 2005 homebuilder peak (2 years before Oct 2007 S&P top). — confidence: high
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): Home goods retailers ETH (Ethan Allen), RH, and Home Depot (HD) are breaking to multi-year lows with the S&P 500 near record highs. — confidence: high
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): XLF (Financial Select Sector SPDR) has not approached January 2026 highs and is struggling to break above its 200-day moving average. — confidence: high
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): “For the S&P 500’s gain since April, just five stocks have accounted for half of the entire advance” — familiar mega-cap stocks leveraged to the AI trade. — confidence: high
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): NYSE A/D line is not confirming the recent move to new highs with the S&P 500 — “a negative divergence that we should watch carefully.” — confidence: high
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): A/D line peaked “several months before the S&P 500’s high in 2007” and “diverged negatively relative to the S&P for over a year before the mid-cycle high in early 2000.” — confidence: high (historical)
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): “Relative weakness across the crypto space could hold an important message for the broader market outlook at this point in the cycle, where asset classes most sensitive to developments with liquidity and monetary policy should be watched carefully.” — confidence: high
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): RKLB (Rocket Lab) gained over 30% in a single day following earnings — confirms Mex Pete patterns identify accumulating stocks; entry was skipped due to stop placement risk. — confidence: high
- 2026-05-13-gann-sub-email-gann-10-for-2026-market-update-13-may (2026-05-13): ITB (iShares US Home Construction ETF) is on the short watchlist as a descending triangle (Reverse Mex Pete). — confidence: high
Predictions / Forecasts
- Crypto / Bitcoin weakness as a leading signal for broader market — “more next week” on what cryptocurrencies can tell us. — status: pending (watch)
- Cyclical sector divergences (homebuilders, financials, home goods retail) are conditions consistent with approaching the real estate cycle peak — not a sell signal, but increasing caution warranted. — status: pending
Stock Picks / Signals
| Date | Action | Symbol | Notes |
|---|---|---|---|
| 2026-05-13 | RAISE STOP → $27.40 | DBA — Invesco DB Agriculture Fund | Protects gains; this was the breakout level from a pattern forming since early 2025 |
| 2026-05-13 | ADD SHORT (bear flag ~$140 support) | COIN — Coinbase Global | Bouncing off 2-yr support; bear flag; relative weakness in crypto |
| 2026-05-13 | PASS (watchlist only) | RKLB — Rocket Lab | 30%+ post-earnings; stop placement too risky for new entry |
| 2026-05-13 | ON SHORT WATCHLIST | ITB — iShares US Home Construction ETF | Descending triangle (Reverse Mex Pete); made high Oct 2024 |
Mex Pete References
- ITB (short watchlist): Descending triangle = Reverse Mex Pete. ITB topped October 2024.
- DBA: Active Mex Pete position. Stop raised to $27.40 (breakout from 2025 pattern base).
- COIN: Bear flag from support ~$140 — short setup. Broader crypto weakness is signal.
- RKLB: Classic Mex Pete accumulation precedes earnings breakout. Entry skipped due to stop sizing post-earnings.
Concepts Referenced
- Market Breadth Divergence — sector divergence (ITB, XLF) and five-stock concentration as breadth warning
- D Line — A/D line not confirming S&P new highs; repeat of 2000/2007 pattern
- Sector Rotation — homebuilders, home goods retail, financials lagging
- Real Estate Cycle Peak — ITB high Oct 2024 echoes 2005 homebuilder top before 2007 peak
- Mex Pete Trading Style — ITB reverse Mex Pete (short); RKLB confirms pattern finds accumulation; DBA long position
- Bitcoin Cycle — crypto weakness as liquidity signal
- Liquidity Cycle — crypto/monetary-sensitive assets as cycle indicators
Notable Quotes
“Market peaks at key turning points in the real estate cycle are often preceded by diverging price action in cyclical sectors of the stock market.”
“For the S&P 500’s gain since April, just five stocks have accounted for half of the entire advance.”
“The A/D line is not confirming the recent move to new highs with the S&P 500 in the chart below, a negative divergence that we should watch carefully.”
“Relative weakness across the crypto space could hold an important message for the broader market outlook too.”
“Following Mexican Pete patterns can put you on the trail of stocks showing accumulation, and that should be active.”