April 10, 2026

Coming off their best week since early November, the major averages eased into the week as investors assessed a possible cease-fire deal between the US and Iran that would open the Strait of Hormuz. Investors didn't wait for confirmation and global markets surged on Wednesday with the DJIA up more than 1,300-points and oil prices dropping about -15%. It was the best single session for the Dow in almost a year. Transportation stocks soared with the DJ Transportation Index posting a new record high. Tech stocks also outperformed led by gains in semiconductors with the Philadelphia Semiconductor Index surging +6.34% and also hitting a new all-time high. The relief rally continued on Thursday after Israel said it would begin direct talks with Lebanon as soon as possible to deescalate their conflict. The major averages were mixed on Friday ahead of peace talks between the US and Iran taking place over the weekend. While the Energy (XLE) sector retreated -3.90%, every other market group posted strong gains led by Technology (XLK), Industrial (XLI) and Consumer Discretionary (XLY), up more than 4.4%. Yields were little changed during the period as a resilient jobs market was offset by stubborn inflation data with the February PCE rising +3.0% YoY, while the March headline CPI jumped +0.9% on the month and +3.3% YoY. The rate on the 10-year Treasury closed the period at 4.324%. The CME Group FedWatch now projects a 98% probability that the Federal Reserve will leaves rates unchanged at the April FOMC Meeting. First quarter earnings opened with Delta Airlines (DAL) and Levi Strauss (LEVI) beating estimates with the Money Center Banks scheduled to report in the coming week. If the 'fragile' cease-fire holds and bank earnings come in as expected, we could see the major averages extend their two-week win streak and take a stab at their old highs.

For the period, the DJIA gained 1411.90 points (+3.0%) and settled at 47916.57. The S&P 500 tacked on 234.20 points (+3.6%) and closed at 6816.89. The NASDAQ jumped 1023.71 points (+4.7%) finishing at 22,902.89. The small cap Russell 2000 rose 100.55 points (+4.0%) and settled at 2630.59.

Market Outlook: The technical condition of the market improved this week with the technical indicators moving into bullish ground. MACD, a short-term trend gauge, is positive and Momentum, as measured by the 14-day RSI, is bullish and moving higher. The VIX also showed signs that traders assume the worst is over. After climbing steadily to above 35 in March, the call for peace talks brought the fear gauge back below 20 on Thursday for the first time since the war began, a neutral position. While the DJIA and NASDAQ gapped above their respective 50-day MA on Wednesday, they struggled to cross above the 100-day MA as the period ended. The S&P 500 gapped above both its 200 and 50-day MA midweek but was able to close above its 100-day MA on Friday.  The different indexes also broke their bearish pattern of lower highs and lower lows and broke above their descending trend lines that have been in place since February. The secondary indexes, which include the DJ Transportation Index, small cap Russell 2000 and Philadelphia Semiconductor Index, continue to outperform the Dow, S&P 500 and NASDAQ which bodes well for further gains. The transports and semiconductors were able to hit all-time highs during the week with the DJ Transportation Index soaring +6.6%, while the semiconductor index surged +13.5%, the different indexes ended the period overbought by some measures with stochastics in the 90s which could lead to some consolidation to start the week. While the action was constructive during the period, Friday's dip showed investors remain wary of the fragile cease-fire that could disrupt further progress next week.

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, up eight notches from the previous week. Cycles A, B and C are bullish, while Cycles D and E are bearish. The positive CTI configuration is only 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 +5, up three notches from the previous week. Breadth was positive at the NYSE as the Advance/Decline line added 2944 units while the number of new 52-week highs exceeded the number of new lows on four sessions. Breadth was also positive at the NASDAQ as the A/D line gained 2769 units while the number of new highs out did the new highs on three of the five days. Finally, the percentage of stocks above their 50-day moving average jumped to 52.4% vs. 25.3% the previous week, while those above their 200-day moving average rose to 52.4% vs. 46.0% 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. In addition, both the NYSE and NASDAQ recorded more new 52-week highs than lows for the first time since the last week of February. We also saw expansion in the new highs showing broader participation in the rally. Another positive was that we saw an increase in volume on the positive days, especially in the NASDAQ, which implies that investors are taking on more risk.

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 +2, down a notch from the previous week.

Investor sentiment is still regarded as Neutral. While there was little change in the bulls, the American Association of Individual Investors (AAII) saw retail bears drop to 43% from 51.4% the prior week but remain above the historical average of 31.0%. Retail bulls saw a small uptick to 35.7% from 33.6%. The National Association of Active Investment Managers (NAAIM) Exposure Index showed money managers taking a 'wait and see' approach to the rally with exposure at 69.4% compared to 68.4% the prior week. The Percentage of Bullish Investment Advisors eased to only 33.3%, a seven-week low, while the Percentage of Bearish Investment Advisors also saw a small decline to 27.8% from 31.5% the prior period.

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 (19) - What's Not (11): The following are the strongest and weakest Industry Groups for the period ending 4/09/26. Strongest: Agricultural, Telecommunications, Integrated Oil & Gas and Energy. Weakest: Paper & Forest Products, Technology Services, Building Materials and Financial Services. 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 4/09/26 were: Specialty Technology (+8.03%), Blend-Small Cap (+6.66%), Specialty Financial (+5.61%), Growth-Small Cap (+5.00%) and Specialty Real Estate (+4.60%). The weakest categories were: Shorts (-6.23%) and Commodity-Agriculture (-0.83%). To review all the ETF categories in the Market Edge universe, click on the ETF Center tab.

By David L. Blake, CMT