On March 28, barely a quarter of S&P 500 stocks sat above their 50-day moving average. By April 17, that figure was 71%. The index closed at 7,126, a new all-time high, and the Russell 2000 hit its own record the same session. That breadth expansion is the single most important data point of 2026 so far, and it tells you the cyclical bull market is not just alive but broadening in exactly the way bears said it could not.
I am not dismissing the risks. I am reading the tape. A 13.1% rally in under 3 weeks looks frothy on the surface. The RSI sits at 72.3, technically overbought. But overbought readings at the start of a new leg higher are a feature of bull markets, not a warning sign. The question is whether the rally has participation or is just a handful of mega-caps dragging the index. The breadth data answers that question clearly.
What the March Panic Actually Produced
The VIX spiked to 31 in late March as oil surged on the Hormuz blockade and AAII bearish sentiment crossed 52%. That 52% reading is a contrarian signal with a strong track record: readings above 45% have preceded positive 12-month returns roughly 80% of the time since 1987. The panic was real. It also created the entry point.
For a household with $400,000 in a diversified equity portfolio, the March low represented a drawdown of roughly $32,000 from February highs. Painful. But anyone who sold at the bottom and waited for "clarity" missed a recovery worth approximately $47,000 on that same portfolio by April 17. The gap between those two numbers is the cost of narrative over data.
Goldman Sachs anchors its year-end target at 7,600, built on $309 per share in earnings, which implies about 12% EPS growth. That is not a heroic assumption. It sits comfortably within the range of what the current capex cycle and AI-driven margin expansion can deliver, based on Q4 2025 and Q1 2026 reports I have already read. Oppenheimer is at 8,100. Morgan Stanley at 7,800. Even Bank of America's cautious 7,100 target has already been breached.
The Bear Argument Deserves a Fair Hearing, Briefly
Critics will point to the 23x forward P/E and argue there is no margin of safety if earnings disappoint. Fair. Valuation is not cheap by any historical standard. But valuation has been a poor timing tool for 3 years running, and the earnings trajectory matters more than the multiple at any given snapshot. If $309 in EPS materializes, 23x gets you to 7,100. The current price already reflects that floor.
The oil risk is real but narrowing. The Strait of Hormuz remains partially throttled, yet the single-session collapse in crude on ceasefire hopes showed how much geopolitical premium is baked into the barrel. A partial reopening by June, which Pakistan ceasefire talks make plausible, would pull oil back toward $85 to $90 and remove the margin compression that bears are modeling.
Jurrien Timmer at Fidelity called this cycle "bent but not broken" at 45 months. He is right. A 10% correction occurs roughly every other year within cyclical bulls. March gave us 1, and the market digested it in less than a month. The speed of the recovery is not a red flag. It is confirmation that institutional money was waiting to buy, not waiting to sell.
The move from here will not be straight up. Consolidation around 7,100 to 7,200 is likely as the RSI cools and money flow catches up to price. But the structural picture, broadening participation, earnings growth in the low teens, and a VIX back below 20, points to 7,600 or higher by December. Investors who treated March as a buying opportunity made the right call. The data says hold.
