Markets Drift Without All Challenging March Lows

Markets are drifting towards a retest of April swing lows, but not all indices did so following tests of March swing lows. These losses feel a little early, and I still would look for a rally to March lows before they get back to April lows - so it 'feels bullish', despite what markets look like they are doing. Volume is falling as markets drift lower, which is also bullish, but technicals remain firmly bearish.

The Russell 2000 ($IWM) closed with a 'buy' signal in the MACD as the index counters with a new period of relative outpeformance to peer indices. It's still a long way from the March swing low, but if it's able to rally past $190 it will set up a new period of higher lows and higher highs.

The S&P tagged the March swing low off its one-day rally (large white candlesticks following a sell off are bearish) and is heading back to the April swing low. The MACD flashed a new 'sell' signal, returning to a net bearish technical picture. Watch for a tag of 5,000, this could be a nice 'buy' trigger with a GTC buy order.

The Nasdaq has lost the most ground relative to its recovery rally. If there is a full April low retest, this will be the first index to do so. Interestingly, it still holds to a weak 'buy' trigger in the MACD despite such losses. While the S&P may be considered a GTC buy opportunity, the Nasdaq may be a present buying opportunity. The key downside is the sharp shift in relative performance against the Russell 2000, but I wouldn't hold this too much against it.

For tomorrow, look for a bright start from the Nasdaq, and if that doesn't pan out, wait for the S&P to reach 5,000. It seems little early for the index to continue accelerating lower given the reprieve in Trump's tariffs, but the market will decide.

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Investments are held in a pension fund on a buy-and-hold strategy.

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