The stock market had a somewhat choppy week, with a late decline on Tuesday followed by gains on Wednesday and Thursday. Economic reports, including Consumer Sentiment, GDP, and Consumer Confidence, were higher than expected, contributing to market movement. The PCE report on Friday was mixed, but stock futures remained unaffected as they surpassed March highs in early Sunday trading.
Markets saw significant gains in April, with the Dow Jones Utility Average, NYSE Composite, and Russell 2000 leading the way with over 4% gains. The S&P 500 and Dow Jones Transportation Average also saw gains of over 3%, while the Nasdaq 100 and Dow Industrials were up just over 2%. However, the Nasdaq 100 was the only index to end the week lower, down 0.4%.
The SPDR Gold Shares (GLD) experienced a 2.7% increase for the week and a 9.2% gain for the month. The iShares Russell 2000 also had a strong week, up 2.7%, while the S&P 500 and Dow Industrials saw gains of less than 1%. The NYSE Composite had 1963 advancing issues to 950 declining issues, and more stocks were making new highs than new lows on both the NYSE and the Nasdaq Composite.
The monthly chart of the Spyder Trust (SPY) shows strong gains over the past five months, with the April starc+ band at $528.75, slightly above the March close at $523.21. The close was 18.4% above the rising 20-month EMA, indicating an extended SPY. The monthly S&P 500 Advance/Decline line has been bullish for most of the past 15 years and has often led prices higher. There were indications of a potential new high for the S&P 500 and SPY in June 2023, and the A/D line has shown strength despite occasional drops below its WMA.
The growth/value ratio chart of the iShares Russell 1000 Growth (IWF) and iShares Russell 1000 Value (IWD) ETFs indicates potential weakness in growth ETFs compared to value ETFs. The MACD and MACD-His have been diverging since late last year, suggesting a possible top in the growth/value relationship. This could signal a sector rotation in the market, with growth ETFs potentially facing negative technical readings in the future. Overall, the market appears to be in a high-risk buy area, with some Wall Street strategists raising their year-end targets despite the stretched market conditions.
