Is Sell The News Going To Happen This Earnings Season?

 

PEAK PERFORMANCE

MARKET INTELLIGENCE EDITION

Week of April 13-17, 2026  |  The Birth of the 7,000 Era

Index / Asset	Fri. Close	Week Change	Note
S&P 500	7,126.06	+4.54%	New All-Time High Close
NASDAQ Composite	24,468.48	+6.84%	Best Week in Many Months
Dow Jones Industrial	49,447.43	+3.19%	Near Record Territory
Russell 2000	2,776.90	+2.11%	Small Caps Lagging Index
VIX (Fear Index)	17.48	-2.56%	Collapsed from 35-40+ Lows
Crude Oil (WTI)	82.38	-13.55%	Strait of Hormuz Reopened
Gold	4,876.00	+1.94%	Holding Near Record Highs
US Dollar (DXY)	~98.37	Multi-Week Low	Tailwind for Multinationals

 

THE BIRTH OF THE 7,000 ERA — WHAT JUST HAPPENED

Let me be direct with you, because that is what we do here at Our Trade Desk: the week of April 13-17, 2026 was one of the most technically significant weeks in recent market history. And most people watching financial television completely missed why it happened.

On the surface the story looks simple. The US and Iran went to the brink. The Strait of Hormuz briefly became the most dangerous shipping lane on earth. Oil spiked above 04 a barrel. The stock market got knocked around. Then diplomatic signals emerged, the market roared back, and by Friday the S&P 500 printed a new all-time closing high — the first time in history it has ever closed above 7,000 — at 7,126.06.

But here is the part the headlines will not tell you. What you witnessed was not just a relief rally. You watched a mechanical, algorithm-driven, options-fueled, institutionally-powered launch sequence that was already loaded and waiting the moment the index crossed back above its 200-day moving average on April 8th. The geopolitical resolution was the ignition switch. The technical setup was the rocket.

 

MILESTONE: S&P 500 New All-Time Closing High April 15, 2026: First-ever close above 7,000 at 7,022.95. April 17, 2026: New all-time closing high at 7,126.06, surpassing the prior record of 6,932.05 (December 24, 2025) by nearly 2.8 percent. The S&P 500 is up 15 percent in just 15 trading days from its Iran war lows — one of the strongest 15-day runs since March 2022.

 

THE GAMMA WALL — THE MECHANICAL FUEL NOBODY IS TALKING ABOUT

There is a concept that professional traders understand well and that most everyday investors have never encountered. It is called the gamma wall, and this week the S&P 500 ran through two of them.

Here is the plain-English version. Big institutions and market makers sell call options to clients who want to bet on the market going up. In doing so, dealers take on what is called negative gamma exposure near key strike price levels. What that means practically: as the market rises toward a key options strike — in this case 7,000 and then 7,100 — the dealers who sold those calls must BUY stocks and futures to hedge their exposure. They have no choice. It is math, not a decision. The closer the market gets to that strike, the more buying they must do.

When the S&P approached 7,000 on Tuesday and Wednesday of this week, that forced dealer buying accelerated. When we closed ABOVE 7,000 for the first time in history on April 15th at 7,022.95, the character of that gamma flipped entirely. Now dealers were long gamma. Instead of mechanically buying rallies, they began supporting the market at every dip. The floor got dramatically stickier.

Then we approached 7,100. Same exact sequence. By Fridays close at 7,126, we had cleared both walls. The next gamma concentration levels to watch are 7,200 and 7,300 — those are your next natural pausing points and your next potential launch pads.

 

GAMMA WALLS CLEARED THIS WEEK 7,000 breached April 15 — first close ever above this level. 7,100 cleared April 17. NEXT WALLS TO WATCH: 7,200 and 7,300. These are not just round numbers. They represent concentrations of options open interest where dealer hedging creates automatic buying pressure on breakouts. Understanding this separates professional market participants from everyone else.

 

MARKET BREADTH — HOW MANY STOCKS ARE PARTICIPATING?

Think of market breadth as the difference between the whole army advancing and just the generals leading. The index level tells you what the headline number is doing. Breadth tells you how many individual stocks are actually joining the move. You want as many soldiers marching as possible.

At the Iran war lows, with the S&P near the 6,200 area, breadth crashed. Only about 15 to 22 percent of S&P 500 companies were trading above their own 200-day moving averages. That is washout territory — historically one of the most reliable long-term buy signals that exists in technical analysis.

Here is where things stand as of Friday vs the prior week:

 

Breadth Indicator	~April 10	~April 17	Change
% Stocks Above 50-Day MA	50-55%	68-73%	+15-18 pts
% Stocks Above 200-Day MA	35-42%	48-55%	+10-14 pts
Est. # Stocks Above 50-Day	~250-275	~340-365	~+65-90 stocks
Est. # Stocks Above 200-Day	~175-210	~240-275	~+45-65 stocks
S&P Index vs Own 50-DMA	Above since Apr 8	Comfortably Above	Improving
S&P Index vs Own 200-DMA	Above since Apr 8	Comfortably Above	Improving
Golden Cross (50-DMA > 200)	In Effect since Jul 1, 2025	Still In Effect	Intact

 

The breadth improvement is real and accelerating — but it is not yet complete. For a fully healthy and sustainable bull market confirmation, we want stocks above their 200-day MA to reach 70 percent or higher. We are currently climbing through the 50 percent zone. That is constructive, not exhausted. It means there is more room for stocks to recover and more participants to join the rally.

The incomplete breadth is actually good news for anyone looking to add exposure. When the last group of lagging stocks finally crosses back above their longer-term averages, that is when you see the broadening-out and the next leg higher. We are not there yet. That is a good thing.

 

SECTOR LEADERSHIP — WHO IS RUNNING AND WHO IS DRAGGING

Understanding sector leadership tells you where money is flowing and where it came from. This weeks rotation story is unusually legible.

 

LEADING SECTORS Technology and Communication Services: NASDAQ gained 6.84 percent versus the S&P 500s 4.54 percent — a 230-basis-point outperformance gap that tells you institutional money is returning to the space that was beaten down all year. Financials also led: JPMorgan and Goldman Sachs delivered strong Q1 earnings beats. Revenue surprises from Financials were the single largest contributor to improving Q1 earnings estimates across the entire index this week.

LAGGING SECTORS Energy: Crude oil crashed 13.55 percent as Iran reopened the Strait of Hormuz. The sector that led Q1 2026 with 34-percent-plus gains is now the biggest drag. The capital that was in XOM and CVX is rotating out and needs a new home. Health Care: Projected earnings declines for Q1. Not participating in this rally. Consumer Discretionary: Mixed results, sensitive to inflation and spending data.

 

Here is the rotation story in one sentence: the oil trade that dominated Q1 is unwinding, and that capital is moving directly into beaten-down Magnificent Seven and technology stocks. This is institutional rebalancing happening in real time, and recognizing it early is how you stay ahead of the crowd.

 

THE MAGNIFICENT SEVEN — DO INSTITUTIONS SEE THEM AS ATTRACTIVE?

The answer is yes — emphatically yes. And here is why the valuation case is stronger than most people realize.

For much of 2025, the Magnificent Seven — NVIDIA, Apple, Microsoft, Alphabet, Amazon, Meta, and Tesla — were the entire market. Then came 2026. Between AI capital expenditure concerns, Iran war fears, and a rotation into commodities, the Mag 7 endured a severe reset. Microsoft reportedly fell approximately 23 percent from its highs year-to-date. Others saw similar drawdowns.

What does that reset mean from a valuation standpoint? The Magnificent Seven now trade at approximately 29 times forward earnings. That compares to 40-times-plus multiples during peak AI euphoria. Meanwhile, these companies are projected to grow earnings roughly 18 to 20 percent in 2026. A 29x forward P/E on 20 percent earnings growth is a PEG ratio well below 2. For institutional portfolio managers, that is a reasonable to attractive entry for the worlds most dominant businesses.

 

The Institutional Case for Mag 7 — In One Number Forward P/E: approximately 29x. Projected 2026 earnings growth: approximately 18 to 20 percent. These companies were trading at 40x-plus at their peaks. The reset has handed institutions a material discount. The Bloomberg headline said it plainly: Big Techs  Trillion Boomerang Powers S&P 500 to New Heights. Professional money that was underweight through the Iran war correction now has a clear fundamental argument to add — and they are adding.

 

The NASDAQ outperformance of 6.84 percent versus the S&P 500s 4.54 percent for the week is the evidence in the tape. Institutions do not show up in breadth data first. They show up in large-cap tech first, because that is where they can move the most capital fastest. They showed up this week. The rotation out of energy and into Mag 7 has institutional fingerprints all over it.

 

EARNINGS SEASON — WILL IT BE SELL THE NEWS?

This is the question everyone is asking. With earnings starting in earnest and the market having already rallied 15 percent in 15 trading days, is this a classic buy the rumor, sell the news setup? Here is the honest, data-driven answer.

 

Q1 2026 Earnings Scorecard	Reading	Historical Avg	Signal
% Companies Beating EPS	88%	78% (5-yr avg)	Significantly Above Normal
EPS Beat Magnitude	10.8% above estimates	7.3% (5-yr avg)	Well Above Normal
Blended Q1 Earnings Growth	13.2% YoY	—	6th Consecutive Double-Digit Qtr
Revenue Growth Rate	9.9%	—	Highest Since Q3 2022
% of S&P 500 Reported	~10%	—	Early — Best Part Still Ahead
Q2 2026 EPS Growth Est.	20.1%	—	Accelerating
Q3 2026 EPS Growth Est.	22.2%	—	Projected Cycle Peak
Q4 2026 EPS Growth Est.	19.9%	—	Sustained Double-Digit Growth

 

The sell-on-the-news thesis works in one specific scenario: when price has already fully reflected the good news. That is not the setup here. Microsoft is down approximately 23 percent from its highs going into earnings. That stock has not been bid up on hope. It has been priced for fear. When a company feared to be slowing down reports strong results, that is not a sell-the-news event. That is a buy-the-confirmation event.

My honest read: This will be a selective earnings season. Names that rallied hard on pure momentum without earnings improvement behind them will fade. But the blue-chip Mag 7 names with genuine beat-and-raise potential are set up for positive reactions. The discount the market gave us on these companies is the setup. The earnings reports are the catalyst.

 

THE ALGO TRIGGERS — THE INVISIBLE FORCES BEHIND THE MOVE

A significant portion of daily trading volume in modern markets is not driven by human decisions at all. Systematic and algorithmic strategies can represent 70 to 80 percent of daily volume at peak activity. They operate on rules, not opinions. Here are the mechanical triggers that fired this week:

*       200-Day Moving Average Recross (April 8): CTA trend-following funds flipped from short to long. These strategies are now systematic buyers of every dip until the 200-day is lost again.

*       Gamma Wall Breach at 7,000 (April 15): Dealer delta-hedging forced automatic buying as prices moved through the key options strike. The flip from negative to positive dealer gamma above 7,000 changed the mechanical character of the market immediately.

*       Gamma Wall Breach at 7,100 (April 17): A second forced-buying cascade. More dealer hedging buying amplified the Friday close and helped set the new all-time high.

*       New All-Time High Close (April 17 at 7,126.06): Mechanical breakout systems across hundreds of independent algorithmic strategies triggered BUY signals simultaneously when the prior closing record was cleared.

*       52-Week High Cascade: As individual stocks recover and print new 52-week highs, momentum algorithms automatically add long exposure. This is a rolling process that continues stock by stock for weeks and gradually broadens participation.

*       VIX Collapse (from 35-40 plus to 17.48): Risk-parity and volatility-targeting funds must increase equity allocations as realized volatility drops. Every percentage point VIX falls represents billions of dollars of systematic buying.

*       Short Covering Cascade: Short positions built during the Iran war drawdown were forced to cover as the market cleared key technical levels. Short covering itself accelerates the moves that force more covering — a self-reinforcing loop.

*       Event-Driven Geopolitical Algos: The Iran resolution triggered rule-based risk-on flows: sell crude, buy tech, sell the dollar, buy equities. These execute in milliseconds once a geopolitical signal clears a programmed threshold.

*       Options Skew Normalization: The extreme put option premiums purchased at fear-peak levels decayed rapidly as the market rallied. The collapse of expensive downside hedging freed capital mechanically back into direct equity exposure.

Bottom line: every major class of systematic strategy had a trigger to buy this week, and they all fired at roughly the same time. That is why the move felt relentless and unstoppable — because for those days, mechanically, it largely was.

 

MONEY FLOW — WHERE IS THE CAPITAL MOVING?

Money flow is about understanding the from-where and to-where of capital movement. This weeks story is unusually legible.

*       OUT of Energy: The oil trade that dominated Q1 2026, carrying the energy sector to 34-percent-plus gains, is unwinding. Crude oils 13.55-percent drop this week was the exit signal for that crowded trade.

*       OUT of Cash and Bonds: Institutions that moved to defensive positions during the Iran war shock are now redeploying. Money sitting in short-term Treasuries is rotating back into equities as the risk premium normalizes.

*       INTO Technology and Mag 7: The primary destination. The soft US dollar near DXY 98 amplifies the case — a weaker dollar means higher reported earnings for multinationals when overseas revenues convert back to US dollars. A quiet but meaningful tailwind entering this earnings season.

*       INTO Financials: Strong Q1 earnings beats from major banks, combined with structural tailwinds of digital finance and resilient loan quality, continue to attract institutional capital.

*       INTO Small Caps Selectively: Russell 2000 gained 2.11 percent this week, lagging large caps but still positive. Small caps are the late beneficiary of risk-on rotation. Watch for this to accelerate as breadth expands toward the 70-percent zone.

 

LOOKING FORWARD — CAN THIS RALLY CONTINUE?

Here are both cases clearly, because honest market analysis requires showing you the full picture.

 

THE BULL CASE New all-time highs change the market character entirely. There is no overhead resistance — only open air. Institutional money is underweight and chasing. Mag 7 earnings likely strong with material beats. Q1 growth at 13.2 percent accelerates to 20-plus percent in Q2 through Q4. VIX at 17 means systematic funds are fully deployed. Goldman Sachs year-end S&P target of 7,600 implies another 6.7 percent upside. Gamma walls at 7,200 and 7,300 are the next launch pads.

THE BEAR CASE 15 percent in 15 trading days is historically rare and short-term overbought — RSI likely 70 to 75 plus. Iran is NOT fully resolved. Any re-escalation sends oil back toward 100 and VIX back toward 30. Mag 7 capex spending concerns have not disappeared. Breadth is still recovering, not yet at 70-percent confirmation level. Some momentum names that ran hard without earnings improvement will sell the news.

 

The path of least resistance is higher, but not in a straight line. A 2 to 3 percent pullback to test the former 7,000 resistance-turned-support would be healthy and historically typical after a move of this magnitude. The 7,000 to 7,040 range is now your first significant technical floor. That level, if tested and held, is a buyable event.

If the Mag 7 earnings season delivers — and the early results from Financials and Communication Services strongly suggest it will — the market has enough fundamental fuel to reach 7,200 to 7,300 before meaningful consolidation. Goldman Sachs year-end target of 7,600 is no longer a stretch scenario. It is the base case if earnings hold at the current trajectory.

The only scenario that ends this rally prematurely is a geopolitical re-escalation that sends oil back above 00 and forces a more hawkish Federal Reserve response. That risk is real but currently declining as Iran-US talks proceed. Watch the oil market. Right now it is your leading indicator for geopolitical risk, more reliable than any news headline.

 

BOTTOM LINE FROM JOHNNY A.

We just lived through one of the most technically instructive weeks in recent memory. The market handed fear-driven sellers a lesson they will not forget anytime soon.

While the headlines screamed about oil prices, naval blockades, and war, the people who understood the gamma structure, the algorithmic triggers, and the institutional positioning were collecting gains. That is not luck. That is preparation meeting opportunity.

The 7,000 era is here. New all-time highs change everything — the burden of proof has shifted from the bulls to the bears. With earnings accelerating, institutions underweight and playing catch-up, and the Mag 7 priced for fear instead of strength, the reasons to go lower are substantially harder to find than they were three weeks ago.

Stay disciplined. Use the technicals as your roadmap. Watch 7,000 to 7,040 as your first support. If we pull back to test that level, that is not a problem. That is an opportunity. Know the difference between a healthy consolidation and a reversal, and you will stay ahead of 95 percent of retail investors who will panic at the bottom of every dip.

 

— Johnny A., Our Trade Desk  |  ourtradedesk.com

The content in this newsletter is for informational and educational purposes only and does not constitute investment advice, a solicitation, or a recommendation to buy or sell any security. Past performance is not indicative of future results. All market data referenced reflects the week ending April 17, 2026. Investing in securities involves risk, including the possible loss of principal. Always conduct your own due diligence and consult a qualified financial advisor before making any investment decisions. Our Trade Desk and Johnny A. are not registered investment advisors.