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)

The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the recent period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as AI and vaccines) and services (such as Zoom calls and Netflix), as well as moving into new markets (clean energy, rare drugs), the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was almost $30 trillion at the end of 2024. That's growth of 30-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 340 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

The stock market has settled down over the past couple of days and volume has fallen sharply since we saw huge volume earlier this month. Fortunately, not all that trading was to the downside as there were a few accumulation days. During a correction phase and many times near "a low," volume hits very high levels. When the market starts a new uptrend, volume must increase but will never reach the levels during the decline -- especially when the downtrend had at least a tinge of panic. We have witnessed what is dreadfully called "a death cross" for the S&P 500 (SPX), the Nasdaq, and the Nasdaq 100 (QQQ) -- but just barely. The S&P 400 had such a cross on April 3 and the S&P 600 on March 18. The death cross is when the 50-day simple average crosses below the 200-day on an index, industry, sector, or individual stock. While there have been some massive SPX declines after a death cross (including 1930, 1937, 1940, 1962, 1969, 1973, 1981, 2000, 2002, 2007, and 2022), there also have been instances where the losses were less than 10% and other times when there was no loss at all. So we view the death cross as a possible warning, but with a good deal of "urban legend" baked in. We also have seen some other potentially worrisome crossovers in the SPX, with the 10-week crossing the 21-week exponential (EMA), and crosses involving the 10-week simple/40-week simple, the 16-week EMA/39-week EMA (very close), the 13-week EMA under both the 26-week and 40-week EMA, and the 26-week EMA close to cutting the 40-week for a double bearish cross-over. The SPX has not broken the very important support from the 50-month and the 200-week simple averages, which is between 4,665 and 4,690. (Mark Arbeter, CMT)

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