Stock Market Outlook
For The Week Of April 20th =
Downtrend

ADX Directional Indicators: Downtrend
Institutional Activity (Price & Volume): Downtrend
On Balance Volume Indicator: Downtrend

ANALYSIS

ANALYSIS The stock market outlook remains in a downtrend.

The S&P500 ( $SPX ) fell 1.5%.  The index sits ~7% below the 50-day moving average and ~8% below the 200-day moving average.

SPX Technical Analysis - April 20 2025

All three technical indicators ( ADX, OBV, and Institutional Activity ) remain in bearish territory.

Energy was the best sector last week, with Real Estate not far behind.  Consumer Discretionary was the worst performer.  Consumer Staples is the first sector to return to a bullish bias, while Utilities improved to neutral.

High Dividend was the best performing style last week; Large Cap Growth the worst.  Low Beta shifted from bearish to neutral.

All asset classes performed well last week as the U.S. dollar continues to fall.  Bitcoin and Oil outperformed.  Bonds shifted to neutral from bearish.

COMMENTARY

A relatively quiet week, compared to the rest of April, with only one day of headline induced volatility. As volatility recedes, don't be surprised if some of the safety trades also ease a bit as well.  Gold is up 25% since turning bullish bias, so now is a great time to lock in some of the gains.  

U.S. Federal Reserve Chair Jerome Powell spoke at the Economic Club of Chicago on Wednesday, acknowledging that the U.S. economy has slowed, but not enough to warrant any action by the FOMC.  He expressed concern about uncertainty from the recent tariff announcements, and stated that the Fed would act if inflation materialized.

To market participants, that sounded more like rate hikes than rate cuts.

Perhaps more impactful was Powell's response to questions about the "Fed put" and whether the central bank would step in if markets plummet. Powell said "no" and then stated that "Markets are struggling with a lot of uncertainty and that means volatility. But having said that, markets are functioning...They're orderly and they're functioning just about as you would expect them to function." (1)

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don't, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics
(1) https://www.reuters.com/markets/us/fed-chair-powell-deliver-fresh-economic-view-tariffs-inject-uncertainty-2025-04-16/

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