The stock market sent a bullish technical signal Monday as it reversed early losses and closed higher—offering potential opportunities for RIAs watching for entry points.
Markets opened lower, pressured by investor caution ahead of the April 2 tariff decision. However, by mid-session, equities rebounded sharply. The S&P 500, which had been down over 1.5%, clawed back into positive territory, suggesting a possible double bottom in formation—a classic reversal pattern indicating the end of a downtrend and the start of a new uptrend.
Craig Johnson, Chief Market Technician at Piper Sandler, notes the S&P 500 may be forming its second bottom in this pattern. Monday’s intraday low of approximately 5,500 mirrors the March 13 low, reinforcing the case. By 2:29 p.m., the index had erased earlier losses and traded at 5,586.
For advisors positioning client portfolios, the pattern presents a possible pivot point. Johnson views this recovery as an "intermediate-term, tradeable low," supported by subdued trading volumes.
"Weekly trading volume is tapering off below the 10-week average," Johnson wrote Monday, likening investor behavior to a "half-court press"—a metaphor for holding back ahead of the tariff news.
Low volume also supports a less ominous view of last week’s selloff. Total exchange volume across the NYSE, Nasdaq, and American Exchange hit its lowest level since mid-January. Rather than indicating aggressive institutional selling, Johnson interprets this as evidence that stocks were declining under their own weight.
This divergence between price action and volume may be constructive for equities. For wealth managers monitoring macro catalysts, Johnson suggests the April 2 tariff announcement could act as a release valve, clearing uncertainty and inviting sidelined capital back into risk assets.
April seasonality may add fuel. Historically, the S&P 500 posts positive returns in April 65% of the time, according to Johnson’s analysis of data going back to 1928. Even more compelling: when April returns are positive, they average a gain of 4.1%.
For RIAs guiding clients through short-term volatility, these historical trends and technical markers offer a useful framework. As Johnson emphasizes, the technical evidence points to a potential bottom—and with a strong seasonal tailwind in play, April could offer favorable conditions for a tactical reentry.
