Introduction
Happy Power Trend Day!
No, it’s not an official holiday—but if you’ve been long and adding exposure, as we’ve consistently suggested since our Buy the Panic call on 3/22, it’s certainly worth celebrating.
So let’s address the key question:
Are we in a Power Trend?
Yes.
And that matters.
What is a Power Trend?
The concept, popularized by William J. O'Neil and Mike Webster, is designed to identify periods when investors should be aggressive with long exposure.
A Power Trend requires four conditions:
The index’s daily low remains above the 21-day EMA for at least 10 consecutive days
The 21-day EMA is above the 50-day SMA for at least five days
The 50-day moving average is trending higher
The market closes higher on the day
All of these conditions are currently satisfied for both the SPX and the Nasdaq.
This aligns perfectly with our broader view: the market is in an impulsive structure, where dips are likely to be shallow and quickly bought.
We Told You the Dips Were Buyable
In our 4/19 report, we explicitly noted that while the market was stretched, any pullback should be viewed as an opportunity—not a warning.
We wrote:
“The weight of the evidence still points to a market that remains strong underneath the surface, supported by improving breadth, stable credit, constructive positioning, and bullish intermediate-term studies. Leadership remains intact, and we are not seeing the type of deterioration that would typically argue for a more meaningful downside move.
As such, we would view any weakness as likely to be shallow and ultimately buyable.”
And what happened?
Yesterday’s dip was bought precisely at the gap window.
That tells you everything you need to know about the strength of this trend.
Gaps Don’t Lie
We’ve emphasized repeatedly the importance of “goalposts” in measuring momentum. One of the most important?
Unfilled gaps.
When gaps hold, it signals persistent buyer demand and underlying strength. It’s one of the cleanest ways we track trend integrity.
Right now, both the SPX and Nasdaq have three unfilled gaps.
Bears will argue that “gaps always fill.” Maybe. Maybe not.
We don’t care.
Our job is not to predict hypothetical outcomes—it’s to keep you aligned with the prevailing trend. We measure, we map, and we adjust when the data changes.
And when it does change, we pivot—just as we did during our cautious stance in 1Q.
Price Leads. Not Headlines.
Stocks broke out to new all-time highs on Wednesday. That didn’t surprise us—and it shouldn’t surprise you either if you’ve been following the signals.
If you’re waiting for a headline confirmation—whether it’s geopolitical resolution or policy clarity—you’re not trading price. You’re trading news.
And that’s typically a losing game.
Markets are forward-looking. Right now, they’re focused on strong earnings and the structural tailwind from AI-driven investment and efficiency gains.
Momentum Is Real
Consider this: the Semiconductor Index has now rallied for 16 consecutive sessions.
If you’ve been waiting for a major reversal, you’re missing the point.
Momentum works.
Is this move extended? Yes.
Will there be a retracement? Of course.
From where? That’s the real question—and we’ll get into that later.
With a week to go, the monthly candles are setting up to be explosive. That’s not bearish.
Will there be difficult headlines to digest given the fluid nature of the Iran situation? Most likely. But the market has already told you it is willing to look through that noise.
Despite ongoing volatility tied to the conflict, equities have repeatedly pushed higher as investors focus on forward expectations rather than headline risk .
For now, the message is simple: the trend is up. Stop fighting the tape.
And for goodness sake—celebrate.
Happy Power Trend Day!
Time to check the charts.
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