April 17, 2026

Global markets soared higher with the US major averages advancing for a third consecutive week following a cease-fire between Israel and Lebanon and Iran's reopening of the Strait of Hormuz. Stocks rallied on hopes that the war with Iran would deescalate, while oil prices tumbled briefly below $82 a barrel on Friday. A US naval blockade in the Middle East went into effect on Monday without incident, kicking off a rally that saw the major averages nearly recover all their losses from the war-driven selloff. Software stocks were on the rebound with the Tech-software ETF (IGV) jumping +5.38%, led by gains in Microsoft (MSFT) and Oracle (ORCL). Newly announced talks between the US and Iran on Tuesday sent stocks higher again with the different indexes returning to the plus column for the year. Investors also focused on strong earnings from JP Morgan Chase (JPM), Citigroup (C), Morgan Stanley (MS), Bank of America (BAC), ASML (ASML) and Bank of NY (BNY) during the period, while the Mag 7 bunch also outperformed. The S&P 500 closed above 7,000 for the first time on Wednesday, and the NASDAQ notched its first new high since November as AI-Infrastructure investments led the market higher. A report that Israel and Lebanon were scheduled to start a cease-fire and begin peace talks sparked a late rally on Thursday led by transportation stocks as oil prices nudged lower. The Iranian call to reopen the Strait of Hormuz sent global markets surging again on Friday and oil prices sharply lower. Yields also moved lower with the rate on the 10-year Treasury at 4.246% and the two-year T-Bill landing at 3.70%. The Technology (XLK) sector led the advance getting a boost from a +15% spike in the software ETF (IGV) and a +7.5% surge in the Philadelphia Semiconductor Index (SOX). Consumer Discretionary (XLY) was also sharply higher led by a +14.8% jump in Tesla (TSLA). Communication Services (XLC), REITs (XLRE) and Financial (XLF) also outperformed. The drop in oil prices left the Energy (XLE) sector down -3.37%, while Utilities (XLU) was also red. The sharp reversal to new highs left the major averages extremely overbought by several measures as Wall Street cheered the potential for an end to the fighting in the Middle East. Next week is light on economic data but a full slate of Q1 earnings is due with several Mag 7 companies due to report, while market participants keep a wary eye on the fact that the opening of the Strait of Hormuz is tied to a ceasefire, not a peace deal.

For the period, the DJIA gained 1530.86 points (+3.2%) and settled at 49447.43. The S&P 500 tacked on 309.17 points (+4.5%) and closed at 7126.06. The NASDAQ jumped 1565.59 points (+6.8%) finishing at 24,468.48. The small cap Russell 2000 rose 146.31 points (+5.6%) and settled at 2776.90.

Market Outlook: The technical condition of the market is strong but as mentioned very overbought. New highs were recorded by the S&P 500, NASDAQ, NASDAQ 100, DJ Transportation Index, Russell 2000 and Philadelphia Semiconductor Index. The major averages are also trading above key MA levels confirming a new uptrend. The technical oscillators including trend and momentum indicators are all confirming a bullish trend. Stochastics for the different indexes are in the 90's however, which should lead to some backing and filling over the near term. In addition, the Market Edge/S&P Short Range Oscillator (SRO) ended the period at +7.89% which historically has led to some profit taking. The secondary indexes, which include the DJ transportation Index, small cap Russell 2000 and Philadelphia Semiconductor Index, which market technicians prefer to see lead the market higher and lower, continue to outperform after displaying positive divergence over the last few weeks. Other than being overbought, the other negative is that only the Technology (XLK) sector is trading at a new high, although Communication Services (XLC) and Consumer Discretionary (XLY) are close. This narrow leadership needs to be watched over the coming week as it shows narrower participation and deflects from trader sentiment that the rally is broad-based.

A chart of these indicators can be found by going to the Market Edge Home page and clicking on Market Recap, which is on the right-hand side of the page just below the Second Opinion Status numbers.

Cyclical Trend Index (CTI): The underlying premise of the CTI is that the market, as measured by the Dow Jones Industrial Average (DJIA), tends to move in cycles that often resemble sine waves. There are five identifiable cycles, each with different time durations at work in the market at all times.

Currently, the CTI is Positive at +2, unchanged from the previous week. Cycles A, B and C are bullish, while Cycles D and E are bearish. The positive CTI configuration is projected to remain bullish into May as longer cycles with more influence are expected to show another market trough occurring in July or August.

Momentum Index (MI): The markets momentum is measured by comparing the strength or weakness of several broad market indexes to the DJIA. Readings of -4 and lower are regarded as bearish since it is an indication that a majority of the broader based market indexes are weaker than the DJIA on a percentage basis. Conversely, readings of +4 or higher are regarded as bullish.

The Momentum Index is Bullish at +6, up a notch from the previous week. Breadth was positive at the NYSE as the Advance/Decline line added 3909 units while the number of new 52-week highs exceeded the number of new lows on all five sessions. Breadth was also positive at the NASDAQ as the A/D line gained 7714 units while the number of new highs out did the new highs on each day. Finally, the percentage of stocks above their 50-day moving average jumped to 63.3% vs. 52.4% the previous week, while those above their 200-day moving average rose to 59.1% vs. 56.1% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth improved with the NYSE and NASDAQ Advance/Decline Lines, leading indicators of market direction, moving solidly higher for a second straight week. The NYSE A/D line also hit a new high on Friday which bodes well for the market going forward. In addition, both the NYSE and NASDAQ recorded more new 52-week highs than lows. However, new highs on the NYSE remains narrow and except for Friday hasn't shown the expanding numbers you'd like to see as the Dow closes in on a new high. The NASDAQ new highs are expanding and are the level we saw before the March selloff hitting 522 on Friday. New lows on the NASDAQ contracted which is another positive, but the negative divergence in the NYSE new highs is another point of contention to watch.

Sentiment Index (SI): Measuring the market's Bullish or Bearish sentiment is important when attempting to determine the market's future direction. Market Edge tracks thirteen technical indicators listed below that measure excessive bullish or bearish sentiment conditions prevalent in the market. The Sentiment Index is Neutral at +1, down a notch from the previous week.

Investor sentiment is regarded as Neutral, but the market rally left the number of bulls in retail and institutional investors mixed. The American Association of Individual Investors (AAII) saw retail bulls drop to 31.7% from 35.7% the prior week and remained below the historical average of 37.5% for a ninth consecutive week. Meanwhile professional investors were chasing the rally as the National Association of Active Investment Managers (NAAIM) Exposure Index jumped to 79.5% from 69.4% the prior week. That's the highest level of exposure to equities since mid-February. The Percentage of Bullish Investment Advisors rose 6.3-points to 39.6%, coming off a seven-week low. The Percentage of Bearish Investment Advisors fell for a second straight to 22.7% the fewest since early March.

Market Posture: Based on the status of the Market Edge, market timing models, the 'Market Posture' is Bullish as of the week ending 04/10/2026 (DJIA - 47916.57). For a closer look at the technical indicators and studies that make up the market timing models, check out the tables located below.

Industry Group Rankings: What's Hot (18) - What's Not (12): The following are the strongest and weakest Industry Groups for the period ending 4/16/26. Strongest: technology Hardware, Agricultural, Telecommunications and Conglomerates. Weakest: Paper & Forest Products, Technology Services, Food, Beverage & Tobacco and Building Materials. To review all the Industry Group rankings in the Market Edge universe, click on the Industry Group tab.

ETF Center: The top performing ETF categories for the week ending 4/16/26 were: Specialty Technology (+10.8%), Sector-Alternative Energy (+8.75%), Blend-Small Cap (+8.21%), Growth-Small Cap (+6.79%) and commodity-Base Metals (+6.38%). The weakest categories were: Shorts (-7.03%), Sector-Energy (-5.80%) and Commodity-Blend (-2.50%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT