April 24, 2026

After three weeks of strong gains the bulls appeared winded, leaving the major averages mixed as investors focused on earnings and headlines out of the Middle East. The rally left the market overbought and the different indexes consolidated recent gains with some backing and filling. Crude oil prices nudged higher as talks between the US and Iran were halted early with Brent crude oil rising above $100 a barrel on Thursday before backing off on a report of a possible meeting between the parties over the weekend. Technology stocks, and in particular semiconductors, outperformed on blowout earnings and guidance from Texas Instruments (TXN) and Intel (INTC). The Philadelphia Semiconductor Index surged +10%, extending its daily win streak to 18 on Friday. Energy (XLE) also outperformed during the period up +3.36%. Most sectors struggled during the week with Healthcare (XLV), Communication Services (XLC), Financial (XLF) and REITs (XLRE) among the weakest market groups. Earnings were mixed with clear winners and losers as forward guidance became a question on concerns over the Iran war. Shares of UnitedHealth Group (UNH), GE Vernova (GEV) and Boeing (BA) spiked on strong results, while Tractor Supply (TSCO), Charter Communications (CHTR), Northrup Grumman (NOC) and ServiceNow (NOW) tumbled after disappointing reports. Although the different indexes closed the period mixed, narrowing leadership was a problem. Only five of 11 sectors closed higher suggesting the gains are being led by fewer stocks with new highs in the NYSE contracting as the period ended. The week ended with the S&P 500, NASDAQ and Russell 2000 higher for a fourth consecutive week and hitting new record highs, but the DJIA saw its weekly win streak stall at three. Next week, Central Banks around the globe will be making decisions on rates, with the FOMC Meeting wrapping up on Wednesday. A full round of earnings are due from big cap technology companies and several from the Mag 7. In addition, headlines out of the Middle East will remain on investors radar in hopes that we could see progress in peace talks over the weekend and the reopening of the Strait of Hormuz.

For the period, the DJIA slipped 216.72 points (-0.4%) and settled at 49230.71. The S&P 500 tacked on 39.02 points (+0.5%) and closed at 7165.08. The NASDAQ jumped 368.12 points (+1.5%) finishing at 24,836.60. The small cap Russell 2000 rose 10.10 points (+0.4%) and settled at 2787.00.

Market Outlook: The technical condition of the market remains strong but as mentioned, increasingly overbought. New highs were recorded by the S&P 500, NASDAQ, NASDAQ 100, DJ Transportation Index, Russell 2000 and Philadelphia Semiconductor Index during the period. The major averages are also trading above key MA levels confirming a bullish uptrend. The technical oscillators are in bullish ground with MACD, a short-term trend gauge, and Momentum, as measured by the 14-day RSI, positive and rising. A VIX staying below 20 also shows that traders believe the worst is behind us and there remains more upside. The secondary indexes continue to outperform the major averages which bodes well for further gains in the broader market. One concern going forward however, is that only the Technology (XLK) and REITs (XLRE) sectors have been able to break out to new highs, once again showing a lack of participation in the rally. Industrial (XLI), Communication Services (XLC), Consumer Discretionary (XLY) and Materials (XLB) remain above key MA's but were lower on the week. Healthcare (XLV) and Financial (XLF) finished the period back below their respective 200-day MA. Without broader participation from these sectors off the February-March selloff we could see a shift in upside momentum. Finally, while it's likely that equites get a fresh leg higher if we see a conclusion to the Middle East conflicts, the Market Edge Cyclical Trend Index (CTI) is projected to revert to a negative setting in mid-May. That is due to the influence of longer cycles prevalent in the market and could signal that the major averages could be topping out over the next few weeks.

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 return the CTI to negative.

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 +4, down two notches from the previous week. Breadth was mixed at the NYSE as the Advance/Decline line lost 699 units while the number of new 52-week highs exceeded the number of new lows on all five sessions. Breadth was also mixed at the NASDAQ as the A/D line dropped 1514 units while the number of new highs out did the new lows on each day. Finally, the percentage of stocks above their 50-day moving average eased to 63.1% vs. 63.6% the previous week, while those above their 200-day moving average rose to 59.8% vs. 59.1% prior. Readings above 70.0% denote an overbought condition, while below 20% is bullish.

Underlying market breadth was mixed with the NYSE and NASDAQ Advance/Decline Lines, leading indicators of market direction, both losing ground during the period showing more stocks under distribution. The NYSE and NASDAQ recorded more new 52-week highs than lows but there was expansion in the number of new lows in the NASDAQ and new highs in the NYSE remain anemic. Before the selloff the NYSE recorded 653 new highs to 174 new lows. That's been reduced to 280 to 60 in another show of narrow leadership. That negative divergence could be another warning of a rally that's running low on fuel.

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 Negative at -2, down three notches from the previous week.

Investor sentiment is regarded as Neutral but retail and institutional bulls are chasing the rally. The American Association of Individual Investors (AAII) saw retail bulls jump to 46.0% from 31.7% the prior week, the most bullish retail has been since mid-January. The number of retail bears fell for a third consecutive week. The National Association of Active Investment Managers (NAAIM) Exposure Index shows money managers are 'all in' jumping to 94.2% from just 69.4% two weeks ago. That's also the most exposure to equities this group has had since mid-January.

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 (9) - What's Not (21): The following are the strongest and weakest Industry Groups for the period ending 4/23/26. Strongest: Telecommunications, Technology Hardware, Conglomerates and Agricultural. Weakest: Paper & Forest Products, Building Materials,  Food, Beverage & Tobacco and Consumer Goods. 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 4/23/26 were: Commodity-Energy (+5.79%), Sector-Alternative Energy (+4.94%), Sector-Energy (+3.36%), Commodity-Blend (+2.44%) and Specialty Real Estate (+2.43%). The weakest categories were: Commodity-Precious Metals (-2.52%), Sector-Internet (-2.04%), Europe (-1.53%), International-Developed (-1.43%) and Sector-Basic Materials (-1.24%).  To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT