/ April 29
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Today:
JOLTs Job Openings (7.19 Actual)
CB Consumer Confidence (86 Actual)
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Today:
American Tower
Coca-Cola
General Motors
PayPal Holdings
Spotify
Fair Isaac
Stride
Visa
Daily Briefing
*It was a choppy day for stocks; the market started, and ended, yesterday’s session higher; the major equity indices traded below their prior closing levels around mid-day, though; the Nasdaq Composite recovered from its session low, but didn't manage a positive finish due to weakness in some mega caps; the S&P 500 settled fractionally higher than Friday and the Dow Jones Industrial Average was up more than 100 points;
*The mixed trading reflected a wait-and-see mindset ahead of a busy week; participants receive earnings results from more than 160 S&P 500 companies, including Microsoft (MSFT, -0.2%), Meta Platforms (META, +0.5%), Apple (AAPL, +0.4%), and Amazon.com (AMZN, -0.7%);
*SPY managed to hold above key support at $544, in a positive development for the bulls; heavy resistance is mounting to the upside, however, and we would not be surprised to see a reversal in this rally; there are still a lot of trapped longs, looking to liquidate positions at more favorable prices; our best guess would be that selling pressure will mount around $565; traditional technical analysis states that any correction has its bottom tested twice, so that would project the next leg of this market down at $513, especially on a serious earnings miss later on in the week;
*The MACD signal is now highly extended to the upside, so much so that the next logical move is lower, not higher in the near term;
*Accumulation in Dark Pools has certainly improved since Friday’s close; among the top 20 S&P 500 stocks we’re now seeing some strong bullish signals, especially in the mega-cap tech space (see META and AVGO); only 3/20 companies are now getting bearish scores, down from 12, last Wednesday;
*The average Dark Pools Index for Monday was 50.15%, right at the neutral mark, and up from the 46% weekly average; this is a bullish signal as far as institutional trading is concerned;
*None of the S&P 500 sectors moved more than 0.7%; the rate-sensitive utilities (XLU, +0.7%) and real estate (XLRE, +0.7%) sectors led the bunch while the technology sector brought up the rear, logging a -0.3% decline.
*Gamma Exposure continues to remain positive for the major market tracking ETFs (SPY and QQQ), confirming the more bullish reads coming out of Dark Pools; in the aggregate, this measure has flipped slightly bearish on Monday due to the influence of the Energy (XLE) sector;
*Sentiment has normalized near the “Neutral” mark, climbing out of the “Liberation Day” depths;
*Finally, the Zweig Breadth Thrust, a rare technical indicator, triggered a bullish signal on Friday; the signal indicates rapid and significant changes in momentum; the calculation is based on the 10-day moving average of the percentage of stocks that were positive on a daily basis; the Zweig Breadth Thrust signal occurs when the moving average rises from below 40% to above 61.5% within 10 days; it is trying to capture the final capitulation in a downward trend;
*A Zweig bullish thrust signal is rare; but it’s been a great predictor of positive forward returns when triggered, as shown below; since 1950, the bullish indicator has only triggered 16 times, not including last Friday; the graph and table below show that in every instance the rare Zweig bullish thrust signal has occurred, it has consistently produced positive returns in the six-month and one-year periods; the shorter-term returns are positive in almost all cases;
*While this doesn’t guarantee the downward trend is over, it does provide optimism that those willing to hold through more volatility and potentially lower lows will ultimately be rewarded;
*The 10-yr yield settled five basis lower at 4.22% and the 2-yr yield settled eight basis points lower at 3.68%;
*TLT broke above its pivot point at $89, potentially setting up a retest of resistance at $91;