Stock traders and investors seemed unfazed by last week’s Producer Price Index (PPI) and Consumer Price Index (CPI) reports, with the market continuing to move higher despite some initial concerns over the PPI report. The S&P futures initially dropped in response to the reports but then rebounded, setting up a bullish trend for the coming week.
Following the lows on April 19th, the S&P 500 and Nasdaq 100 have been on an upward trajectory, despite some bumps along the way. The American Association of Individual Investors reported a drop in bullish sentiment, which reached its lowest point in weeks but showed signs of improvement in the following week.
Analysts are closely watching the advance/decline lines and the AAII data to signal the start and end of market corrections. Key indicators, such as the A/D lines, have played a significant role in predicting market movements, with corrective formations helping to identify potential shifts in the market.
The S&P 500 ETF Trust formed a key reversal on April 4th, indicating a correction was on the horizon. The A/D line dropped into correction mode on April 10th, leading to a five-day decline in the SPY until April 19th. However, the A/D line rebounded shortly after, signaling the end of the correction.
The SPDR Gold Shares led the market higher last week, outperforming other indices and marking a 17.5% increase year-to-date. Growth ETFs also showed signs of improvement, with the iShares Russell 1000 Growth making a new high. The weekly OBV for IWF closed back above its WMA, indicating a positive trend.
The daily analysis of the Invesco QQQ Trust shows some cautionary signs, with daily dojis forming and potential bearish reversals in the Nasdaq 100 A/D line. However, the overall market trend remains positive, with the Dow Jones Industrial Average breaking above 40,000 and showing signs of continued growth through 2024 and beyond. With three new bullish signals in the T&J ETF Watchlist, investors are advised to manage risk and use protective stops on new positions.
