The S&P 500 (SPX) and the S&P 100 (OEX) both fell for a third consecutive month in April, while the Nasdaq and Nasdaq 100 (QQQ) avoided that fate with minimal gains in April. For the SPX and the OEX, it was the first three-month decline since the August to October 2023 correction. We will again note that all the major indices traced out huge bullish hammer candlesticks during the past month; while not common, these candlesticks can indicate a market that is bottoming. In April, the SPX lost 0.8% and the OEX fell 0.6%, while the Nasdaq rose 0.9% and the QQQ gained 1.6%. Information Technology (XLK) led the 11 SPX sectors, rising 1.9%. Consumer Staples (XLP) came in second with a 0.2% rise. Utilities (XLU), Industrials (XLI), and Consumer Discretionary (XLY) were flat. The worst sector, by far, was Energy (XLE), plunging 14%, with Healthcare (XLV) next, down 4%. It was XLE's worst month since June 2022, in the last bear market. The best stock performers in April from the SPX were dominated by IT names, with Palantir (PLTR) soaring 40%; CrowdStrike (CRWD) up 22%; GE Vernova (GEV) and Netflix (NFLX) up 21%; ServiceNow (NOW) up 20%; and Cadence Design (CDNS) up 17%. The worst performers were ENPH, plunging 28%; APA, off 25%; SWK, GPN, and HAL, all down 22%; and CRL, ARE and UNH, all off 21%. Bitcoin (+15%) and gold (GLD +5%) provided some alpha, although gold lost some of its luster since its April 21 all-time high. Silver fell 4%, WTI (USO) plunged 18%, and natural gas (UNG) lost 23%. The dollar (UUP) was weak, falling 4%, while bonds (TLT) did little. (Mark Arbeter, CMT)

While the stock market is washed out, it recently was very oversold on many timeframes and sentiment remained awful. That could be the cause of days like Wednesday, when there was a big pop. But there is still plenty to worry about when looking at the technical condition of the market. Long-term breadth is terrible and has been in the danger zone since early March. The volume of S&P 500 (SPX) stocks above their 200-day average sank to a recent low of 23%, the weakest level since the 2022 bear market (when it fell to 12%). Some 21% of S&P 100 stocks are above their 200-day, while the QQQ reading has dropped to 28%. When we look at most charts, it's hard to find a bullish, or even a neutral, chart. Sometimes, things look so bad that they eventually become good! The NYSE New High-New Lows reading crossed below its 50-day average, its first sell signal since 2022 and 2023. Even more disturbing is that New NYSE Lows recently surged over 1000 issues, or 37% of issues in the index. When this reading rises above 10%, it generally has been a bad sign for stocks. From a momentum standpoint, the weekly Coppock Curve has dropped into bearish territory and is still falling, this after tracing out a massive bearish divergence late last year. The monthly Coppock Curve traced out a bearish divergence in late 2024 and is just starting to break its 21-month exponential. Historically, this has led to some really bad market conditions, with major sell signals in 1981, 1987, 1990, 1992, 1998, early 2008, late 2014, and early 2022. However, not all bearish crosses have led to bear markets. But most led to at least major corrections, which we already have seen. (Mark Arbeter, CMT)

Since the S&P 500 (SPX) closed at 5,522 on March 13, also when the low occurred for the other major indices, the overall stock market has tried to make a stand. It is common for indices to bottom around the same time, while that is certainly not the case when they make intermediate- to long-term tops. As they say, bottoms are an event, tops are a process! There is a major cluster of resistance for the SPX between 5,750 and 5,825. It includes the slightly rising 200-day average; the declining 21-day exponential moving average; a 38% and 50% retracement of the decline; and the closing and intraday breakdown levels from January 12 and 13. For support, it's simple: the closing low at 5,522. Our worries remain about longer-term breadth. While there has been some improvement, more is needed. The measurement of SPX stocks above their 200-day average stands at 43%, up from 40%. For the OEX, it is up to 52% from 42%, and for the QQQ, it has risen to 44% from 35%. A reading below 45% represents a warning for the overall market. The NYSE New Highs-New Lows has seen a minor cross of its 50-day for the first time since September 2023. Both lines are flat and would be more bearish if they were falling and had a larger spread. The indices are below their 200-day averages, also a concern. We would like to see accumulation days along with better breadth. We also would like to see some stabilization in the beaten-down growth stocks that led the market higher over the past couple of years. Remember, Information Technology still represents 31% of the SPX and Communication Services is 10%, of which 35% is considered IT. (Mark Arbeter, CMT)

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