Some sentiment measures have overheated, and we think the market needs a technical reset. The five-day CBOE equity-only put/call ratio (P/C) hit 0.47 on Tuesday, matching the low from January 22 when the market was topping earlier this year. This is the lowest reading since April 2022, which was after the initial counter-trend rally during the 2022 bear market. Prior to that, the five-day P/C is at its most optimistic level since coming out of COVID-19 in the second half of 2020 and during 2021, when stocks were strong.

The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the recent period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as AI and vaccines) and services (such as Zoom calls and Netflix), as well as moving into new markets (clean energy, rare drugs), the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was almost $31.5 trillion at the end of 2025. That's growth of 30-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 340 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

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The stock market raced higher on the last day of March, cutting into both monthly and quarterly losses that were quite ugly just a day earlier. It seems like President Trump may have had enough of low stock prices, high energy costs, and the possible political cost from the war in Iran. Interpreting his position is an increasingly interesting task -- but for at least a day, stocks rallied based on what appeared to be a goal to end the war sooner than later, even if there is not a full opening of the Strait of Hormuz. Despite the huge one-day gains, the intermediate-term technical trend for stocks remains difficult. Positioning has become, at times, the most important dynamic to monitor on Wall Street. Indeed, going into month end, we saw quite a few reports that hedge funds have been huge sellers of late. And when everyone is on one side of the fence, all you need is a spark for trigger-happy traders and algorithms to not only cover their shorts, but often buy into price strength. The S&P 500 (SPX) blasted higher by almost 3% on Tuesday, the Nasdaq popped 3.8%, and the Nasdaq 100 reclaimed 3.4%. Those are the largest one-day moonshots since May 12, 2025 (which was about five weeks after the tariff plunge). There is a lot of resistance overhead. So if this is the start of a bullish reversal, it's difficult to pick one level that could make or break the attempted rally. SPX chart resistance starts at 6,540 (intraday high) with the next stop at 6,720. The 21-day exponential and 200-day simple averages lie between 6,613 and 6,639. (Mark Arbeter, CMT)