Charting the S&P 500: Nice Recovery But More Work Is Needed
Stocks finished last week strong but the index still remains in a tough spot.
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That rally last week came with a big sigh of relief. No question, the bulls needed a week like that, even as volatility picked up.
The uncertainty surrounding earnings, Fed policy, geopolitical issues and inflation are on the the front burner, and when one of these gets heated the markets respond. Early in the month of April all we could really see was a retreat of monetary policy "promises." Rate cuts were coming, so they said. But the committee (FOMC) has been in retreat mode of late, preferring to err on the side of caution. That is clearly away from where the futures market is/was at just months ago.
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It is these changes and uncertainties that carry plenty of weight on the markets, and though earnings season is in full swing and is often a bullish moment, some disappointments will be experienced, as we saw with portfolio bullpen name Meta Platforms META. The stock was trounced on Thursday and took the rest of the market with it — for awhile. Then portfolio names Alphabet (GOOGL) and Microsoft MSFT went the other direction and helped pace a nice finish for the week.
We will not change much on the chart this week. Basically we see the S&P 500 has printed an inside week (higher low, lower high). This is of no consequence until a higher high or lower low is established. The supporting indicators are still telling us the downside is not over, but that can be rehabilitated in short order with a couple of positive weeks.
At the time of publication, TheStreet Pro Portfolio is long GOOGL and MSFT.
