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Bullish rotation favors the large-cap technology stocks.

Stock Price Indicators

Major stock price indexes rebounded to new all-time highs. The benchmark S&P 500 rose 12.95% over the past 18 trading days, a powerful advance that is noteworthy because many bull markets have begun with similar sharp upthrusts. The technology-heavy NASDAQ Composite has been even stronger, gaining 19.44%.

The equal-weight S&P 500 remains below its February closing high and is trailing at just +7.42%. While that still represents the strongest momentum since May 2025 and remains bullish, it also shows that large-cap technology stocks are leading the advance, while mid-cap stocks (MDY) and small-cap stocks (IWM) remain constructive but lag the mega-cap leaders.

Momentum and Breadth

Long-term momentum remains positive and has strengthened across short- and intermediate-term time frames. Of 38 major markets we track each week:

• 74% are above their 50-day Simple Moving Averages (SMAs), down from 82% a week ago.
• 79% are above their 200-day SMAs, down from 87% a week ago.
• 76% maintain a bullish long-term configuration (50-day SMA above 200-day SMA), down from 79% a week ago.

Within the S&P 500, 52.8% of stocks trade above their 50-day SMAs (down from 61.0% a week ago), and 57.0 are above their 200-day SMAs (down from 61.6%).

The Cumulative Daily Advance–Decline Line (A/D Line) finished the week slightly lower after rising to new all-time highs on Monday 4/20/2020, confirming the strength in the major price indexes.

Net New Highs fell to +93, down from +183 March a week ago. Readings above zero for new highs minus new lows are bullish.

Sentiment Indicators

Investor confidence improved sharply after generating contrarian buy signals in March. The VIX Index is at 18.71, down from a peak of 31.65 on March 27 (when it was more than two standard deviations above its 10-year mean of 18.79). The AAII Bulls/Bears survey recorded 46.0% bullish versus 34.4% bearish, indicating a clear shift from pessimism to optimism. The Put/Call Ratio is now at 0.51, down from a peak of 0.90 in March, reflecting a marked move from defensive positioning toward greater risk appetite. The CNN Investor Sentiment Index indicates optimistic Greed at 66, down slightly from 68 a week earlier. In March, it ranged from 14 to 18, placing it deep in Extreme Fear zone, a condition that has historically been bullish. Although sentiment is becoming more optimistic, it has not yet reached levels that would justify a contrarian bearish view. Doubt remains, including among much of the mainstream media.

Sector and Market Rotation

The large-cap S&P 500 ETF (SPY) outperformed the equal-weight ETF (RSP) since 3/31/2026, reversing a period of underperformance that began on 10/29/2025. The SPY/RSP ratio crossed above the 20-, 50-, and 200-day SMAs, suggesting that the market currently prefers mega-cap leadership.

The Technology ETF (XLK, 160.22) soared to new all-time high and outperformed since 2/5/2026. XLK crossed above major SMAs, and the 50-day SMA crossed above the 200-day SMA on Friday 4/17/2026, generating a “golden cross” buy signal. The pessimism surrounding AI from November through February has reversed, and short sellers appear to be under pressure.

The Energy stocks consolidated gains after a steep three-month advance. The S&P 500 Energy Sector SPDR (XLE, 56.87) edged higher last week but remains below its 3/30/2026 peak of 63.46 and slightly under its 50-day SMA, now at 57.28. XLE may move sideways or lower in the short term as it digests the excesses of its January-through-March rally.

International equities have been rising on hopes for a lasting peace agreement with Iran. The Emerging Markets ETF (EEM) and EAFE ETF (EFA) remain above all SMAs, and the 50-day SMAs have remained above the 200-day SMAs, a bullish technical configuration. EFA price declined last week, and all trends point to EEM continuing to outperform EFA.

The China Large-Cap ETF (FXI) declined last week and has underperformed the S&P 500 for 19 years since 2007. It fell to its lowest price level since May 2025 on 3/27/2026, confirming the "death cross" on 3/11/2026, when the 50-day SMA crossed below the 200-day SMA. Technical conditions continue to point to persistent underperformance, and exposure should be avoided.

Currencies, Commodities, and Fixed Income

The U.S. Dollar Index ETF (UUP, 27.48) price rose slightly last week but remains bearish. UUP crossed slightly above the 50-day SMA, now at 27.46, but remains below the 200-day SMA at 27.53. The U.S. dollar has remained in a major downtrend since peaking at 30.76 on 9/27/2022.

Precious and industrial metals have been choppy and erratic since the blow-off tops on 1/29/2026. Gold Miners (GDX) and Silver (SLV) crossed below their 50-day SMAs last week, suggesting the end of their recent price recovery attempts. Gold (GLD) fell further below its 50-day SMA, now at 447.33, where it recently encountered upside resistance. Copper (CPER), declined slightly last week but remains the strongest of the metals, still holding above key SMAs. As a group,  metals have continued to underperform the major stock price indexes since January.

Energy markets reversed to the upside last week. WTI Crude Oil (CLM26, 94.40) and Oil ETF (USO, 132.40) crossed above their 50-day SMAs but may face resistance near their highs of 4/7/2026. While long term technical trends may still be bullish, the short-term outlook suggests possible consolidation or correction.

U.S. fixed income prices fell last week, likely  ending their recovery attempts from their lows on 3/27/2026. The Long Bond ETF (TLT) and U.S. Note ETF (IEF) remain bearish below their 50-day and 200-day SMAs, and with the 50-day SMAs below the 200-day SMAs. iShares Core U.S. Aggregate Bond ETF (AGG, 99.59) triggered a "death cross" on 4/23/2026, when the 50-day SMA crossed below the 200-day SMA. The technical structure for U.S. fixed income prices suggests underperformance and downside risk.

See The Colby Global Markets Report (click here) for our complete analysis of global markets and specific investment rankings.

A strategy emphasizing both capital preservation and return on investment appears most rational and prudent at this time.

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