NASDAQ LEADS MARKET HIGHER --

MAJOR STOCK INDEXES HAVE A STRONG WEEK...Although the stock market's long-term trend may still be in doubt, stocks are ending the quarter on a strong note.   Starting with the weakest, Chart 1 shows the Dow Industrials ending the quarter back above its 200-day moving average and in the process of testing its 50-day average.   The S&P 500 is doing even better.   Chart 2 shows the SPX climbing above both moving average lines and trading at the highest level in more than a month.   The SPX may be heading toward a test of its February high.  The Nasdaq 100 has already cleared that chart barrier.   Chart 3 shows the Invesco QQQ Trust now trading at the highest level since last August.   In addition, its blue 50-day average has crossed above its red 200-day line which is another positive sign.   The sharp pullback in bond yields has probably had a lot to do with the surge in the tech-dominated Nasdaq market.

TECH AND COMMUNICATION SERVICES LEAD FIRST QUARTER...Chart 4 shows the sector leaders and laggards for the first quarter.   It also shows Technology and Communication Services as the two strongest sectors with a quarterly gain of 20%.   Consumer Discretionary is in third place with a quarterly gain of 15%.  That's normally a good sign when economically-sensitive cyclicals are doing better.   Financials were the weakest sector with a loss of -6%.   Other losers were healthcare, utilities, and energy.   Defensive stocks in general lagged behind the market.   Volatility has also weakened.

FALLING VOLATILITY BOOSTS MARKET... Chart 5 compares the CBOE Volatility (VIX) Index to the S&P 500 over the last six months.   Both lines trend in opposite directions.   And peaks in the VIX usually coincide with bottoms in stocks.   Note that the first peak in the VIX formed last October coincided with an upturn in the SPX which is still intact.  An upturn in the VIX near the end of February contributed to a pullback in stocks.   The subsequent peak in the VIX during March, however, pushed the VIX back below 20 which has coincided with the latest upturn in the SPX.   That low volatility is supportive to stocks as they enter the seasonally strong month of April.