Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst
Last week, major U.S. stock indexes posted their steepest weekly declines since March 2020 as the United States imposed tariffs and some key trading partners retaliated, triggering sell-offs on Thursday and Friday. The S&P 500 finished down more than 9% overall and 17% below the record high it set just six weeks earlier. The NASDAQ Composite Index dropped around 10%.
Sector Performance & Small-Cap Bear Markets
Leading the way lower were the Energy group (-14%), Information Technology (-11.4%), Financials (-10%), Communications Services (-8.4%), Materials (-8.2%), and Consumer Discretionary (-8%).
Spring’s arrival ushered in bear markets, as a U.S. small-cap stock benchmark fell below that threshold on Thursday and the NASDAQ followed suit on Friday. The Russell 2000 sank 20% below a recent high reached in November 2024; the NASDAQ’s recent decline follows a record level set in December.
Quarterly & Monthly Market Setbacks
U.S. stock indexes finished this year’s first quarter with their biggest quarterly declines since 2022. The S&P 500 finished the quarter on Monday down around 4.6%. For March, the index’s 5.8% decline was the biggest monthly setback since September 2022.
Bond Markets & Oil Prices
Prices of U.S. government bonds posted their biggest weekly gains in more than seven months, sending yields lower as stock market volatility drove some equity investors into fixed income. The yield of the 10-year U.S. Treasury briefly fell below 4.00% on Friday for the first time in about six months (mid-January levels reached 4.80%).
The price of U.S. crude oil fell on Friday to its lowest level since April 2021, trading around $62 per barrel—down more than 10% for the week (with most of the overall decline occurring on Thursday and Friday). Less than three months earlier, oil was trading around $80.
Oversold Indicators & Technical Rebound Potential
We have now arrived at an extreme oversold short-term condition not seen since the Feb–March 2000 Covid crash. The VIX spiked to 41.54, an eight-month high, near the close on Friday. The McClellan Oscillator closed near -170 (in oversold territory, though not VERY extreme), and we saw an intraday TICK intensity reading on Friday of -1412. In addition, the percentage of stocks above their 40-day moving average plunged to near 7%—a number we haven’t seen since September 2022.
The combination of these oversold indicators leads me to believe that a rebound (and possibly a sharp one) should take place early this week. Next week should be a volatile one with excellent trading opportunities!
In any case, as usual, we will always “Trade What We See, Not What We Think.”
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