Technical breakout of 1-week downtrend on good breadth is a positive for the near-term

US Equities showed signs of extending gains Tuesday in a way that is suggestive that our rally from 4/7 lows should start to work its way higher. As discussed in recent days, the positives surrounding bullish volume imbalances from our US Equity market lows from roughly two weeks ago were more of a positive than the subsequent decline attempts in the past week on lackluster downside breadth, relatively speaking. Furthermore, today’s (4/22) push above a one-week downtrend in SPX does help to add some credibility to a good likelihood of a Spring low being intact for Equities. While some robust upside follow-through now looks necessary to help add further conviction to the idea that a rally to SPX-5500 should be underway, it seems that the bad news largely has been priced in heading into the earnings period for Magnificent 7. Going forward, SPX 5500, QQQ-466.43, and DJIA-40,661 remain key areas to exceed to have confidence in a rally.

Short-term breakouts happened on Tuesday in SPX, along with QQQ, DJIA, and IWM, in a way that makes rallies likely into May.

While this report normally discusses only technically-derived news, it’s important to highlight that President Trump reiterated (after Tuesday’s market close in a speech) that there will be no pressure to fire Jerome Powell, which the Media had been saying could be possible. Furthermore, this came on the heels of some comforting comments by Scott Bessent during the day, which mentioned de-escalation in the tariff war (Equity market futures immediately jumped following Bessent’s comments as well as responded positively after-hours after Trump’s comments). Thus, in my view, both are important as market-moving narratives.

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