The video in this report is only accessible to members
The video in this report is only accessible to members

Tuesday’s mild gains remain under key resistance, but breadth has definitely started to slow in the last couple weeks.  Following a close just above SPX-4124 on 4/3, the last 10 days have brought about only a 30-point SPX rally, or +0.70%.  While certainly positive, it lacks some of the upward thrust that’s going to be necessary to keep this rally going, given Technology having begun to stall a bit in recent weeks.

In the short run, however, the continued rally in Financials in recent days as earnings have gotten underway seems to be a definite positive for the big banks.  A pick-up in Regional banks would be a larger positive for the sector, in my view.

The standout early this week has centered on Consumer Discretionary, and Equal-weighted Discretionary has broken out to multi-month highs.  Casinos, Homebuilders, and Hotels all appear attractive technically, and should push higher in the days ahead.

Overall, following a 350-point S&P rally since the mid-March lows, or +9.2% in a bit more than five weeks’ time, the area near 4200 could prove challenging to immediately exceed given the lack of a catalyst with Earnings and an FOMC meeting in the weeks to come.

However, no evidence of any reversal is a...

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