EB Daily Market Report - Brief Update - Thursday, April 10, 2025

This will be very brief today as I wanted to see how finished after yesterday's massive afternoon rally.

Today's action is somewhat disappointing after yesterday as there's been no follow-through whatsoever. Considering that the March Core CPI came in well below expectations, +0.1% vs. +0.3%, that adds to the disappointment. Ordinarily, that kind of good news would result in gains, especially given the market environment that the Fed is watching. The lack of inflation provides an opportunity for the Fed to at least consider cutting rates again soon. Yesterday, the Fed got good news with the 90-day delay in tariffs (outside of China). Yet, this 1-2 punch has resulted in disappointing action the way I see it.

The sector leaderboard also adds to the disappointment as the aggressive sectors (XLK, XLY, and XLC) all find themselves near the bottom of the leaderboard:

Finally, let's look at that S&P 500 chart, noting that yesterday's strength did not clear any major technical hurdles. I was nervous about a move back down today and that's exactly what we've seen:

I do like the long-ish tail to the downside, showing some afternoon strength. That'll add to what's already a bullish AD line.

Right now, I'm growing a bit more bullish, but I'd really like to see continuing improvement in the AD line and a false breakdown beneath the recent low. That would be a nice combination to perhaps start us on our way back to the upside. In the meantime, we'll need to clear the declining 20-day EMA and price resistance at 5521. Until that happens, we'll remain in our wide 4819-5521 range.

Happy trading!

Tom