Core Viewpoint - The U.S. stock market may have reached an upward turning point, but three key obstacles remain to be overcome for a sustained rally [1] Group 1: Market Signals - Recent positive signals include reduced overseas selling pressure on major tech stocks and significant net buying by hedge funds [2][3] - The S&P 500 index experienced a sharp decline from 5462 to a year-low of 4835, followed by a rebound of 735 basis points, closing at 5525 [2] - The dynamics of increased long-term buying in the U.S. and decreased international selling are critical for future market performance [3] Group 2: Key Indicators to Monitor - Three key confirmation signals to watch for market uptrend include market breadth, liquidity depth, and ETF trading volume [1][4] - Market breadth is currently below historical averages, indicating a need for broader stock participation in the rally [4] - Liquidity depth for S&P mini futures is approximately $4 million, still significantly below the historical average of about $13 million, suggesting market fragility [7] Group 3: Corporate Performance and Investor Behavior - Corporate earnings reports have been better than pessimistic expectations, with 46% of companies exceeding earnings expectations by more than one standard deviation [5] - Retail investor buying is likely to remain strong unless unemployment rates begin to rise [5] - The corporate buyback window is expected to be robust, with an estimated $1.45 trillion authorized for buybacks and $11.6 trillion executed, providing market support during earnings season [5] Group 4: ETF Trading Dynamics - The proportion of ETF trading volume reached a high of 44% on April 9, currently around 35%, indicating reliance on ETFs for hedging [7] - A decline in ETF trading volume below 30% would suggest reduced hedging demand and an increase in risk appetite [7]