Summary
Phil Anderson’s Gann #12 update flags a historic breadth divergence (S&P 500 at record high while nearly 10% of constituents hit 52-week lows — an all-time record for that combination), accelerating inflation (CPI +3.8% April YoY, largest in ~3 years; PPI +6.0%, largest since end-2022), and a confirmed breakout in the 30-year Treasury yield above 5% — the latter from a Mexican Pete ascending triangle pattern PSE had been tracking for months. TBT (ProShares UltraShort 20+ Year Treasury, 2× inverse) is added to the Mex Pete model portfolio with a $34 stop. Anderson draws a direct parallel to the late 1990s internet bubble dynamic: narrow AI-stock concentration driving indexes while average stocks deteriorate under rising rates and inflation.
Key Claims
- Nearly 10% of S&P 500 constituents made 52-week lows on May 13 as the S&P closed at a record high — the largest share of constituents making new lows in history while the index closed at an all-time high. — confidence: high
- Only 50% of stocks across major US exchanges were above their 50-day MA; only 37% above their 20-day MA, even as the S&P 500 hit record highs. — confidence: high
- CPI +3.8% April 2026 YoY (largest gain in nearly 3 years); PPI +6.0% April 2026 (largest gain since end of 2022). — confidence: high
- Market-implied odds now point to a Fed rate hike within the next six months. — confidence: high
- US 30-year Treasury yield has broken out above 5% — highest level since 2007 — from a Mexican Pete ascending triangle pattern. — confidence: high
- The current market dynamic is “very reminiscent of the late 1990s internet bubble” — concentration in tech/AI stocks while average stocks struggle under rising inflation and rates heading into what was then a mid-cycle peak. — confidence: high
- “Everything in the market is brought together by interest rates.” — Phil Anderson — confidence: high
- Rising inflation and rates “could play a significant role in bringing about the end of the real estate cycle’s upswing and cause a cascading impact across the market, impacting everything from stocks to currencies and precious metals.” — Phil Anderson — confidence: high
Predictions / Forecasts
- Fed rate hike expected within the next six months (implied by market pricing as of May 2026). — status: pending
- 30-year Treasury yield breakout above 5% to continue / yield to stay elevated. — status: pending
- Similar late-1990s dynamic to play out: tech-driven index highs masking broader deterioration heading into a significant market turn. — status: pending
Stock Picks / Signals
| Ticker | Action | Entry/Stop | Notes |
|---|---|---|---|
| TBT | Added to Mex Pete Portfolio (US) | Stop: $34 | ProShares UltraShort 20+ Year Treasury; 2× inverse of ICE US Treasury 20+ Year Bond Index; profits from rising long-dated yields |
Concepts Referenced
Notable Quotes
- “In fact, as the S&P jumped to a record high last week on May 13, nearly 10% of the S&P’s underlying constituents were making 52-week lows. That was the largest share of the index making new lows in history with the S&P closing at a record high.”
- “The current environment is very reminiscent of the late 1990s internet bubble.”
- “Everything in the market is brought together by interest rates.”
- “The developments underway with inflation and the impact on rates across the yield curve could play a significant role in bringing about the end of the real estate cycle’s upswing and cause a cascading impact across the market, impacting everything from stocks to currencies and precious metals.”