Why I’m Not Chasing This Rally — and You Shouldn’t Either

by Graham Lindman | May 12, 2026

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I’ve been getting a lot of questions lately from traders who feel like they missed the recent run. They’re looking at the charts, seeing green and wondering if they should jump in now before it’s too late.

That’s a natural reaction, especially when optimism seems to be spreading quickly and everyone suddenly feels bullish.

But here’s what I told them — and what I want to share with you today. I think we’re going to get another opportunity. It may not happen for a month or two, but based on everything I’m seeing in the data, coming up in the summer months we could be looking at a significant buying opportunity.

This isn’t a gut feeling — it’s something that lines up cleanly with the seasonal patterns tied to the Federal Reserve. Historically, this strong early-year stretch is often followed by a downtrend into the June-July window, which has repeatedly produced attractive entry points.

And by significant, I mean a 15% drawdown on the S&P 500 is not out of the question. That kind of move may feel dramatic, but it’s completely in line with past cycles.

In fact, when you map today’s market against the late 1990s — a period with uncanny similarities — you’ll see the same sort of setup. Back then, after a powerful October-to-February climb, the market experienced a sharp pullback before ripping into its melt-up phase. If that pattern continues to rhyme, later this summer could bring not just a 15% drop on SPY but potentially 20% or more on the Nasdaq 100 (QQQ).

Now, before you panic — that does not mean the end of a bull market. Not even close. In the 1990s, that mid-cycle drop was the shakeout that created the most explosive upside of the entire run.

The Historical Pattern Playing Out

Let me walk you through what I’m tracking. When you look at the seasonal Federal Reserve backdrop, the market is in a strong period for another several weeks. But historically, this strength is followed by a cooling-off period that aligns almost perfectly with that June-July range.

That’s the window where opportunity tends to show up, and it’s the reason I keep saying patience is the edge right now.

Before we get there, though, it’s important to recognize what’s actually driving this rally. Internal indicators aren’t signaling runaway euphoria. The fear-and-greed readings aren’t anywhere near extreme greed and the put-to-call ratio is still sitting in neutral territory.

That tells me sentiment has room to run, but it also tells me that this isn’t your classic late-top blowoff where everyone is fully committed and the market is out over its skis.

At the same time, breadth is not broad. The heavy lifting is coming from a handful of massive tech names, not the whole market. That kind of narrow leadership can keep indexes elevated longer than most expect, but it also makes new aggressive bets outside the top performers riskier.

That’s another reason why waiting for a cleaner pullback makes more sense than forcing trades right now.

And speaking of forcing trades — I know how easy it is to feel FOMO when everyone around you turns bullish at the same time. That shift in crowd psychology is exactly when I like to step back, take a breath and look for what could upset the consensus.

When sentiment feels one-sided, a well-timed shakeout becomes far more likely.

The Late ’90s Roadmap

I’ve been mapping our current market against the late ’90s dot-com boom, and the resemblance is almost eerie. From October to February, we’ve watched a near-identical surge. Then we got a pullback tied to geopolitical tension, followed by a V-shaped recovery. If that rhythm continues, then the next act is the deeper pullback that sets up the final melt-up.

And that’s really what this all comes down to. A drawdown this summer wouldn’t be a threat to the bull market — it would be the setup for the biggest opportunity ahead.

But trading through this phase isn’t going to be easy. Expect increased intramonth volatility — wild swings both directions — that will demand emotional resilience, not just a sound trading plan.

Net, I still think the Nasdaq can finish the year up around 20% but the path there won’t be smooth.

So if you’re thinking about making a big move right now, I’d pump the brakes. In my opinion, it’s probably too late to make a large, aggressive investment. You can still make money but don’t go crazy. Smaller or medium-sized positions in strong leaders are fine, but saving real firepower for that cleaner summer window is the strategic play.

Because once that pullback hits, the next move is the one I really want to be positioned for — the final melt-up. That’s where the reward-to-risk becomes undeniable.

Graham Lindman
Graham Lindman Trading

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