Inside Markets — Low Vol Bullish Trend

Fundamental drivers of the recent rally, like resilient macro data and better-than-feared Q1 earnings, can be dismissed as lagging indicators. However, investors may choose to look through any soft patch if/when it materializes. Meanwhile, improving market breadth adds bullish internal credibility to the rally as the SPX pressures the upper end of anticipated technical resistance at ~5650. The near-term pain trade is biased higher amid extreme bearish equity sentiment, light positioning and improving fund flows as the corporate buyback window remains wide open. From a technical perspective only, sustained closing levels above ~5650 signal a potential shift back to a low-volatility bullish trend.