Market Analysis (20 April’21)

U.S. stocks fell Tuesday, extending their losses as investors assessed blue-chip companies’ profits and sales prospects. Investors are looking to companies’ first-quarter results and their outlooks for the rest of the year to gauge whether valuations on stocks are justified. Strong U.S. economic data has bolstered expectations and fueled the recent rally that has left major indexes hovering close to records.

Bull Traps

S&P500, Nasdaq and Dow Jones futures formed short-term Bull Trap patterns on their hourly charts.

S&P 500 futures, 1h

Nasdaq futures, 1h

Dow Jones futures, 1h

Heikin Ashi Trends

Moreover, after today’s session, all four indices are in the downtrends on their daily Heikin Ashi charts.

Daily Trends: Heikin Ashi Charts

Sentiment Is Overly Bullish Again

According to the Rydex data, the Rydex Total Bull / Bear Ratio hit the most ‘optimistic’ reading ever. Prior similar readings led to substantial corrections in 2018 and 2020.

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