Summary: Markets staged a broad rebound with improving internals, resilient “modern family” leadership, and favorable seasonality, but the move remains tentative with key indexes still below long-term trends and volatility elevated. Underneath, risk signals remain mixed with weak breadth, negative longer-term trends, and surging oil suggest the broader downtrend isn’t resolved despite the short-term bounce.

Risk On

• Sectors were broadly positive on the strong market rebound, though there were typical risk-on sectors leading like technology along with others like metals and materials giving mixed signals. (+)
• Market internals, which had been trending higher last week even as the market fell, turned positive this week on an absolute basis and are looking relatively strong. (+)
• The modern family is holding up relative to the overall market with many of them holding support levels at their major moving averages. Collectively, one of the more positive areas of the market. (+)
• Seasonal trends are good heading into April for the S&P and Nasdaq, though still weaker for Small Caps. (+)

Neutral

• On a holiday-shortened week, markets rebounded off their lows, though three of four indexes are still under their 200-Day Moving Averages. It's too early to say if this is a reversal of the downtrend or not. (=)
• Volume patterns improved this week to more of a neutral reading, though the S&P is the weakest of the bunch. (=)
• Sectors were broadly positive on the broader market rebound, though there were typical risk-on sectors leading like technology along with metals and materials. (=)
• Risk gauge is showing neutral with the relative strength in rates and weakness in metals. (=)
• Volatility came off its highest levels, but remains elevated overall near its March levels. (=)
• Foreign equities continued their relative outperformance, with both more established and emerging markets doing strong. (=)
• Soft commodities are indicating continued inflationary risks. (=)
• Rates stabilized some this week but still offer a mixed outlook. (=)
• The new high new low ratio retested its low levels from last week however they have improved from moderately oversold levels. (=)

Risk Off

• The color charts (moving average of stocks above key moving averages) remains negative across the board, though some miniature green shoots on the short-time frames. (-)
• Value is outperforming growth, though both are still in a short-term downtrend. We saw a bounce this week from oversold levels and could see growth retesting its $460 levels, though the broader downtrend is still intact. (-)
• Oil prices continued to surge, reaching extreme overbought levels, though parabolic moves can easily defy overbought/oversold readings.(-)

Actionable Trading Plan

1) Positioning (Stay Tactical, Not Committed)

• Treat this as a tradable bounce within a broader downtrend, not a confirmed reversal.
• Keep net exposure moderate (e.g., 40–70%) and avoid full risk-on allocation until breadth and trend confirm.

2) Where to Lean Long (Selective Strength)

• Focus on relative strength leaders: technology and the “modern family” names holding key support.
• Use pullbacks—not breakouts—to enter, given elevated volatility and overhead resistance.
• Favor foreign equities on relative strength, but size smaller due to macro crosscurrents.

3) What to Avoid or Fade

• Avoid chasing late-stage parabolic moves (oil)—look for exhaustion rather than continuation.
• Be cautious on broad index exposure, especially where still below 200-day trends.
• Limit exposure to weak breadth environments (negative NH/NL, weak color charts).

4) Risk Management (Critical Here)

• Tighten stops and scale out into strength rather than holding for extended trends.
• If markets fail to hold recent lows or internals roll over, quickly reduce exposure.
• Keep some dry powder—this is not a “set and forget” environment.

5) Confirmation Triggers (Add vs Reduce Risk)

• Add risk if: breadth expands (NH/NL improves), indexes reclaim 200-day levels, and volatility compresses further.
• Reduce risk if: rally stalls with weak internals, oil continues to spike (inflation pressure), or growth fails at resistance.