U.S. markets opened in negative territory despite another round of solid earnings as comments from several companies stoked worries that earnings may have peaked.

Overall, this is not likely the case, as the market showed afternoon strength to finish mixed. Volatility remains slightly elevated but continues to hold a key level of resistance.

The Dow gained 0.3% following the morning backtest to 23,823 and fresh weekly low but reclaimed the 24,000 level afterwards to snap a five-session slide.

The S&P 500 was up 0.2% after making a late day run to 2,645 while holding support at 2,600 on the opening weakness.

The Nasdaq extended its losing streak to 5-straight sessions after slipping 0.1%. The index tapped to an afternoon high of 7,030 and was able to hold support at the 7,000 level into the close.

The Russell 2000 slipped 0.2% after trading in the red for much of the session with the low reaching 1,539. The index held its 50-day moving average into the close for the 2nd-straight session.

Energy showed the most sector strength after rising 0.8% while Materials and Health Care rose 0.5%. Real Estate and Financials were the only sector laggards after declining 0.3% and 0.1%, respectively.

Global Economy – European markets closed lower ahead of Thursday’s ECB meeting as traders await signs of when the ECB plans to exit its QE program. The Belgium20 and Germany’s DAX 30 tanked 1% while the Stoxx 600 Europe was down 0.8%. France’s CAC 40 and UK’s FTSE 100 fell 0.6%.

ECB Executive Board member Mersch said confidence on inflation has risen as the inflation rate hasn’t weakened as much as the ECB predicted when they reduced the bond purchasing program from 60 billion euros to 30 billion euros.

ECB Governing Council member Vasiliauskas said the ECB has witnessed the strengthening of broad-based growth and steadily declining unemployment, which has provided conditions for inflation convergence to their objective.

This has increased her confidence that it is time to transition from the asset purchase program.

Asian markets were lower across the board with Australia’s S&P/ASX 200 closed for holiday. Hong Kong’s Hang Seng dropped 1% while South Korea’s Kospi sank 0.6%.

China’s Shanghai gave back 0.4% and Japan’s Nikkei fell 0.3%.

MBA Mortgage Applications fell 0.2%, accompanied by an unchanged reading on the purchase index and a 0.3% decline in the refinancing index for the week ending April 20th.

The average 30-year mortgage rate increased by 7 basis points to 4.73%, the highest since September 2013.

Market Sentiment – The iShares 20+ Year Treasury Bond ETF (TLT) closed lower for the 5th-time in six sessions after bottoming at $116.94. Upper support from February at $117-$116.50 was breached but held.

A close below the latter could lead to $115.50-$115 and longer-term support from early March 2017. Lowered resistance is at $117.50-$118.

Market Analysis – The Spider S&P 500 ETF (SPY) snapped a four-session losing streak after making an intraday run to $264.13. Resistance at $264-$264.50 held with a close back above $265 being a slightly bullish development.

Shaky support is at $262.50-$262 with a close below the latter likely leading to a further backtest to $260.

RSI is trying to establish an uptrend with resistance at 50.

Continued closes above this level would be a bullish signal. Support is at 40 with a close below this level signaling a retest to 35-30 and February and March lows.

The Spider Gold Shares (GLD) recently formed a double-top just above the $129 level and major resistance from late January. This is a bearish technical pattern that often leads to lower lows with today’s backtest reaching $125.06.

Support at $125-$124.50 held with risk to $124-$123.50 and the 200-day moving average on a move below the latter.

Resistance is at $125.75-$126.25 and the 50-day moving average and levels that need to clear and hold to reverse the current trend.

RSI is trying to hold support at 40 with a close above this level leading to a possible retest to December lows near 30. Resistance is at 45-50.

Existing Position Update

AAPL is oversold and I’m expecting price to trade higher next few days – that should influence the overall market since the stock has the most market share of any asset on Wall Street at this time.

TSLA remains in range and there’s less negative data impacting the day to day price of the stock. Volatility should decline further, giving us a bit more of an edge to the upside once again.

PANW remains stable even though price declined slightly. Volatility has not shown major spike and that tells me that random action should prevail in the near term.

TLT was initiated – as bonds appear oversold once again. I’m not a big fan of going against the trend – but the risk to reward on trade is massive, the risk is not that great, puts are grossly overpriced and RSI levels are telling me that price should increase slightly before trading lower once again.

Roger Scott