EB Daily Market Report - Quick Update - Tuesday, April 1, 2025
I've provided a lot of market guidance over the past few days with our special events, so this will just be a quick update to what I've been discussing.
First, I believe we now have a very significant S&P 500 trading range to monitor. We saw price resistance hold at 5782 and on the way back down, prior price support at 5521 held as well. There's our key range. It'll be important to see which level gives way first. Here's the chart to highlight both support and resistance, while also quickly reviewing key sustainability ratios:
We hit a new low recently and I annotated a "sorta" positive divergence. It's not technically a positive divergence, because when evaluating momentum on the PPO, we need a lower CLOSING price, which we don't have here - only a lower intraday price. So, technically, this falls short of a positive divergence. Still, the idea is much the same. The AD line is very solid. We held support and reversed off it after actually seeing a slightly lower low. Why can't we call a bottom? Well, it's difficult to do so with "under the surface" signals still pointing to difficulties ahead. I do believe, however, that price trumps everything.
I'm fine, for now, watching this current trading range to see which way we break.
I could debate on the bullish or bearish side right now in the short-term, but let me be perfectly clear. I remain steadfastly bullish long-term. I am not wavering.
One final thought for today:
A lot has flipped since yesterday. Defensive groups lag. Discretionary (XLY) and technology (XLK) are showing much more relative strength.
It'll be very interesting to watch the action tomorrow. President Trump will discuss in more detail (hopefully) the tariffs that market participants are anxious to hear more about. Watch the trading range, and especially any breakout or breakdown that might result. We'll so get a preview of Friday's nonfarm payrolls as the ADP employment report is due out tomorrow morning at 8:30am ET.
Happy trading!
Tom