{"id":26927,"date":"2026-04-23T07:30:00","date_gmt":"2026-04-23T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=26927"},"modified":"2026-04-22T15:06:12","modified_gmt":"2026-04-22T19:06:12","slug":"key-indicators-to-watch-for-this-rapid-reversal","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/key-indicators-to-watch-for-this-rapid-reversal\/","title":{"rendered":"Key Indicators to Watch for This Rapid Reversal"},"content":{"rendered":"\n
\n

Managing Editor\u2019s Note: <\/strong>Today, we\u2019re hearing from our contributing editor, Mike Burnick, in his weekly Thursday feature.<\/p>\n

Mike brings 30 plus years of hands-on market experience \u2013 from trading floors and research desks to running his own mutual fund as a registered investment advisor \u2013 and now leads multiple TradeSmith advisories including Constant Cash Flow, Infinite Income Loop, and Inside TradeSmith.<\/p>\n

Now, here\u2019s Mike\u2026<\/p>\n<\/div>\n\n\n\n

Key Indicators to Watch for This Rapid Reversal <\/h2>\n\n\n\n

BY MIKE BURNICK, CONTRIBUTING EDITOR, MARKET MINUTE<\/em><\/strong><\/p>\n\n\n\n

After tumbling 14 out of 21 trading days in March for a decline of 9.5%, the S&P 500 rapidly reversed, posting gains in 11 of the first 14 trading days of April, up 8.6%.<\/p>\n\n\n\n

This sudden reversal of fortune left plenty of investors scratching their heads. And it\u2019s reminiscent of the tariff-turmoil one year ago.<\/p>\n\n\n\n

After the 2025 low, the S&P 500 went on to post big gains over the next six months.<\/p>\n\n\n\n

But don\u2019t expect a repeat performance this time around.<\/p>\n\n\n\n

Let\u2019s take a closer look at our Market Health outlook on the TradeSmith Dashboard page, and you\u2019ll see what I mean.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

You can see the short-term Health distribution among S&P 500 sectors above at lower left. This view tells you our market outlook over the next few months.<\/p>\n\n\n\n

Only Energy and Utilities are in the Health indicator green zone, which means they\u2019re trending normally.<\/p>\n\n\n\n

Most sectors are in the Health red zone, which means they\u2019ve stopped out and are unhealthy to trade.<\/p>\n\n\n\n

These sectors include Financial Services, Technology, Healthcare,  Consumer Cyclical and Communications.<\/p>\n\n\n\n

The remaining sectors are in no-man\u2019s land in the Health yellow zone, including Basic Materials, Industrials, Consumer Defensive and Real Estate.<\/p>\n\n\n\n

Sectors (or stocks) in the yellow zone have already declined half-way to the red zone, so proceed with caution.<\/p>\n\n\n\n

If you switch to the long-term Market Health view, however, the picture looks better. This view tells you our outlook over the next 12 months or more.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

As you can see, the majority (54.55%) of sectors are Green. Two sectors, Energy and Healthcare are yellow.<\/p>\n\n\n\n

Meanwhile, Financial Services, Industrials and Consumer Defensive are in the red zone.<\/p>\n\n\n\n

This tells me at a glance that we may want avoid Financial and Healthcare stocks, since they\u2019re the only sectors in the red zone both short- and long-term.<\/p>\n\n\n\n

New buying opportunities should mainly be considered in healthy sectors, especially stocks in the green zone.<\/p>\n\n\n\n

Yellow zone stocks can likewise be considered buy-the-dip<\/em> opportunities, based on additional research.<\/p>\n\n\n\n

Several sectors have already improved with the recent rally, bouncing back into the long-term Health green zone from yellow.<\/p>\n\n\n\n

These include Basic Materials, Technology, Consumer Cyclical, Real Estate and Communications Services.<\/p>\n\n\n\n

That\u2019s positive for the stock market overall, because these five sectors combined account for nearly 60% of the S&P 500 by market cap.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Looking at the long-term TradeSmith chart of the S&P 500 above, you can see how prices have surged back above our Smart Moving Average<\/em> (SMA<\/em>) of the index.<\/p>\n\n\n\n

The Smart Moving Average is a proprietary indicator we developed that\u2019s unique to every stock and index.<\/p>\n\n\n\n

It isn\u2019t a \u201cstatic\u201d moving average like the popular 50-day moving average. Instead, it\u2019s based on the ever-changing volatility of underlying stocks.<\/p>\n\n\n\n

So it better captures the true underlying trend of stocks, or the market index.<\/p>\n\n\n\n

The next positive to watch for is for our SMA to rise back above the S&P 500 50-day moving average.<\/p>\n\n\n\n

SMA is currently near 6,750 and rising a bit every day, while the 50-day average is near 6,780 and rising more slowly. So, not too much further to go.<\/p>\n\n\n\n

The flipside,<\/em> however is that if the SMA fails to move above the S&P\u2019s 50-day average, or it cannot hold above this key trend level, stocks could be vulnerable to roll over again and pull back toward recent lows.<\/p>\n\n\n\n

Stay tuned and keep a watchful eye on these TradeSmith market health and trend indicators.<\/p>\n\n\n\n

<\/p>\n\n\n

Good investing,<\/p>\n

\"Signature\"<\/p>\n

Mike Burnick
\nContributing Editor, Market Minute<\/em><\/p>","protected":false},"excerpt":{"rendered":"

What\u2019s up next for the markets\u2026<\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[],"person":[],"newsletter-type":[],"ticker":[],"class_list":["post-26927","post","type-post","status-publish","format-standard","hentry","category-market-minute"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=26927"}],"version-history":[{"count":27,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26927\/revisions"}],"predecessor-version":[{"id":27056,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26927\/revisions\/27056"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=26927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=26927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=26927"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=26927"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=26927"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=26927"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=26927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}