Make or
Break Week

by | Apr 4, 2022

Key Points

  • The S&P 500 Stalls Above the Moving Averages
  • Small Caps Fade from Resistance
  • The NASDAQ 100 Remains Neutral
  • Ten-Year Note Nears Support, Rebound Incoming?
  • Global Dow Holds the Moving Averages but Still Lags

U.S. Equities

The S&P 500 was flat on the week and closed near the same level as where it opened. Bulls will be encouraged by price holding above the 10 and 40-week moving averages, with the former beginning to turn higher. Bears will point out that last week’s trading showed a lot of indecision. All the while, the 14-week RSI is in the middle of the range, in a neutral position.

The S&P Small Cap 600 met resistance at the 40-week moving average and closed lower for a second consecutive week. Price is above the 10-week moving average, which is beginning to move higher. The 14-week RSI is in the middle of the range, confirming neutral price action.

The relative trend is also neutral.

The NASDAQ 100 has also met resistance at the 40-week moving average and has been turned away. Price remains above the 10-week moving average, which is beginning to move higher. After moving below 40, the 14-week RSI is back in a neutral position.

The relative trend is neutral as the ratio tries to break above resistance.

U.S. Fixed Income

The 10-Year Note is trying to stabilize its decline below the 10 and 40-week moving averages. It would not be a surprise to see the price begin to move higher in a short-term rebound. Support comes into play in the $118-$120 zone.

The yield has met resistance near 2.5%.

Global Equities

The Global Dow also closed the week with an indecision candle after breaking above the 10 and 40-week moving averages. Price remains in consolidation that has been in place for nearly a year, confirmed by the 14-week RSI trading in the middle of the range.

The relative trend remains below resistance. Until there is a clean break from the current consolidation, it is hard to make a case for outperformance on the part of Global stocks vs. their U.S. peers.

Take-Aways

After a strong move over the past two-three weeks, the U.S. and global equities are showing signs of indecision. The NASDAQ 100 and the S&P 600 both failed at their respective 40-week moving averages. Trends in the equity market are neutral. At the same time, the 10-Year Note is trading near long-term support, setting the stage for a countertrend rally.

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