April 18, 2022 Weekly Start

$SPY $QQQ $IWM

Last week’s market review assigned a “guilty until proven innocent” status. Today’s action was sleepy and range-bound. The market hasn’t proven anything bullish yet.

There is much recent bullish commentary regarding:

• Sentiment — extremely low levels like we’re seeing now have been contrarian indicators and can signal a bounce

AAII SentimentSurvey @AAIISentiment

AAII Sentiment Survey: *Bullish sentiment this week ranks among the 10th lowest readings in the survey's history *Bearish sentiment is again at an unusually high level aaii.com/sentimentsurvey

• Seasonality — the month of April is historically one of the strongest of the year

StockTrader'sAlmanac @AlmanacTrader

DJIA Streak of 16 Consecutive Positive Aprils in Jeopardy - As of today’s close, DJIA is down 0.77% in April. S&P 500 is now down 3.06%. NASDAQ has had the most challenging April so far, off 6.25%. Russell 2000 is down as well, but more inline...

tmblr.coDJIA Streak of 16 Consecutive Positive Aprils in JeopardyDJIA Streak of 16 Consecutive Positive Aprils in...

• Inflation — Some early indications suggest that it may have peaked

Ryan Detrick, CMT @RyanDetrick

One positive development that most aren't talking about is the big drop in shipping rates. Shanghai ==> LA, NY, or Rotterdam are down nearly 28% on avg from the peak last Sept. Yet another clue that inflation (and supply chains) could be about to see some major improvement.

But the charts just aren’t confirming any of that.

$SPY is trading right around the March low AVWAP. Losing this level would add to the bearish case.

A rally into the close helped the daily candle not look as bad. And that price action continued after 4:00 PM on James Bullard’s (Federal Reserve) comments about future rate hikes, GDP, and unemployment.

Let’s see if that strength is still there in the morning.

In the meantime, stay on your toes and manage your risk.