S&P 500 rallied last week, but is this a new uptrend or simply an upward correction?Stocks were gaining on Friday, fueled by the Thursday’s earnings releases from two big tech companies – GOOG and MSFT. The S&P 500 index opened with a gap up and closed 1.02% higher, near the 5,100 level. It was the highest since April 15 when it sold off after a failed rebound attempt.On previous Friday, the index hit a new medium-term low of 4,953.56. This marked its lowest level since late February, with a decline of over 311 points or 5.9% from the record high of 5,264.85 on February 28. Last week, stock prices rebounded as tensions in the Middle East somewhat eased, and investors shifted their focus to the quarterly earnings releases.In my Stock Price Forecast for April, I noted, “Closing the month of March with a gain of 3.1%, the question arises: Will the S&P 500 further extend the bull market in April, or is a downward correction on the horizon? From a contrarian standpoint, such a correction seems likely, but the overall trend remains bullish.”Last week, the sentiment worsened again, as indicated by the Wednesday’s AAII Investor Sentiment Survey, which showed that only 32.1% of individual investors are bullish, while 33.9% of them are bearish. The AAII sentiment is a contrary indicator in the sense that highly bullish readings may suggest excessive complacency and a lack of fear in the market. Conversely, bearish readings are favorable for market upturns.This morning, stocks are likely to open higher, as indicated by the futures contract gain of 0.3%. The market will get back above 5,100 level, likely extending its Friday’s advance, as we can see on the daily chart. 
S&P 500 Rebounded by 2.7% Last WeekCompared to the previous Friday’s closing price, the index gained 2.67%, retracing most of its previous week’s sell-off of over 3%. On April 12, I wrote that “Short-term consolidation near the new records may suggest that the market is potentially topping out, though no clearly negative signals are evident yet.” Indeed, the market topped out, breaking below its upward trend line, and accelerated a short-term downtrend. It’s worth noticing that the index bounced from a support level of around 5,000, as we can see on the weekly chart. 
Earnings Pushed Nasdaq 100 HigherRecently, the technology-focused Nasdaq 100 index broke the 18,000 level, and on previous Friday, it briefly dipped below the 17,000 level, reaching a local low of 16,973.94.More By This Author:S&P 500: Upcoming Earnings Lift HopeStocks Expected To Rebound, But Is The Correction Over? S&P 500 at 5,000 – Break or Hold?
