US Market Insights (28 Apr - 2 May): SPX Cautious Rebound Ahead

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Tiger_James Ooi
04-28

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Things You Should Know Before Starting Your Week

1) The US Stock Market Just Triggered an Ultra-Rare and Bullish Signal — the Zweig Breadth Thrust

  • Last Thursday, the S&P 500 triggered the Zweig Breadth Thrust, a rare technical signal that has only occurred 20 times since World War II.

  • The Zweig Breadth Thrust signals the potential start of a bull market when the percentage of advancing stocks surges from below 40% to above 61.5% within 10 trading days, indicating broad and rapid market strength.

  • Historically, following the past 19 occurrences of a Zweig Breadth Thrust: The probability of the S&P 500 rising over the next 1, 3, 6, and 12 months was 94.7%, 78.9%, 100%, and 100%, respectively. The average returns during those periods were 4.8%, 7.6%, 14.8%, and 23.4%, respectively.

2) Trump Administration Lays Out Roadmap to Streamline Tariff Talks — WSJ Reports

  • According to an exclusive report by the Wall Street Journal, the Trump administration has finally outlined a framework for reciprocal tariff negotiations.

  • The initial plan involves hosting six nations for talks during the first week, another six nations during the second week, and another six during the third week—creating an 18-nation cycle that will repeat until the administration’s self-imposed July 8 deadline.

  • The negotiation framework covers not only tariffs and import/export quotas, but also non-tariff barriers such as regulatory standards on U.S. goods, digital trade rules, rules of origin, economic security issues, and related commercial matters.

  • However, it still appears unlikely that some country will be able to reach a trade agreement with the U.S. within just the first two or three rounds of negotiations, suggesting that the July 8 deadline may need to be extended.

Source: Carson Investment Research

Tariff Negotiation Updates:

China: Beijing denies President Trump's claims that tariff negotiations are underway.

UK: Finance Minister Reeves describes trade talks with Treasury Secretary Bessent as "positive and upbeat."

Japan: Prime Minister Ishiba insists Japan will not continue conceding to U.S. demands, though Trump says a deal is "very close."

India: Treasury Secretary Bessent suggests India could be the first to finalize a trade deal with the U.S.

 

3) Technical analysis suggests strong resistance around the 5800–5900 range if this is indeed a V-shaped rebound.

  • Fibonacci expansion analysis indicates that key upside resistance levels for the S&P 500 are at 5533 (127.2%), 5822 (138.2%), 5906 (141.4%), and 6132 (150%).

  • The $S&P 500(.SPX)$ may stall around the 5533 level (127.2% Fibonacci expansion) unless positive developments in trade tariff negotiations provide further momentum to push the index higher.

Source: Tiger Brokers App

Conclusion:

  • The U.S. equity market looks set for a volatile week driven by major earnings releases (including Microsoft, Meta, Apple, and Amazon), key labor market reports, PCE inflation data, and GDP figures. However, potential tariff de-escalation news could continue to support the S&P 500’s upside momentum.

  • It remains uncertain whether this is a genuine investment opportunity, or if markets are setting up for lower levels in the coming weeks or months.

  • I remain skeptical of a sustained rally, primarily due to persistently higher bond yields. A bond shake-off often signals potential weakness ahead for the stock market.

  • With the S&P 500 having recovered nearly 50% of its recent losses, investors may consider adding exposure gradually in stages rather than investing in a single lump sum.

  • Long-term investors may look to broad-market ETFs such as SPY $SPDR S&P 500 ETF Trust(SPY)$ , IVV $iShares Core S&P 500 ETF(IVV)$ , VOO $Vanguard S&P 500 ETF(VOO)$ (tracking the S&P 500) and QQQ $Invesco QQQ(QQQ)$ (tracking the Nasdaq-100) to capture potential upside from a continued market recovery.

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