MW Wall Street bears may have pushed the stock market too far, making an April rally more likely

By Barbara Kollmeyer

Scott Rubner says 'Magnificent Seven' names are likely to see buying interest next month

The bulls are coming in April, says Citadel Securities' Scott Rubner.

Investors who have been betting against the stock market recently may be starting to reverse their positions, which could spark a big rally in April.

That's according to Scott Rubner, head of equity and equity-derivatives strategy at Citadel Securities. Rubner said his team is shifting to tactically bullish on U.S. equities heading into April, after shifting to neutral in March.

"The setup for April is increasingly constructive. While risks remain and the broader capitulation checklist is not fully resolved, our data-driven assessment of sentiment and positioning is overwhelmingly bearish," Rubner wrote in a note on Monday.

The easing of those bearish positioning pressures, along with geopolitical tensions, could help that April rally take hold. Stocks SPX DJIA surged on Monday after President Donald Trump said talks were under way to end the conflict, which is in its fourth week. Stock futures pointed to losses for Tuesday, as the S&P 500 remains down 3.8% year to date.

Technical flow-of-fund dynamics are "creating air pockets in both directions," he said, pointing to one clearing event that could help drive gains. That is a 25% chunk of U.S. options exposure that has been creating mechanical sell orders and was due to roll off markets by March 20.

Adding to that, trend-following funds such as commodity-trading advisers - CTAs - along with risk-parity and volatility-control funds have been aggressively selling stocks. "These strategies could transition into incremental buyers if the market were to move higher," said Rubner.

S&P 500 market liquidity is also thin - in the third percentile over the past two years. Just a small amount of money traded by investors can move the market - $2.5 million versus a $12 million year-to-date average, he noted. In that regard, investors shifting to buyers could have an outsize impact on stocks for April.

In addition to quarterly options expirations, Rubner pointed to another big technical event by March 31 - a last wave of selling as pensions rebalance, which will likely see continued buying of fixed income and selling of stocks.

The strategist said that the "new technical dynamic" for April will mean capital repatriating back to the U.S., along with "Magnificent Seven" names and quality stocks - those tend to be companies with more stable balance sheets and resilient business models.

He noted that exchange-traded-fund inflows have already reached $518 billion this year, more than five times the average. However, billions have been flowing out of major U.S. ETFs such as iShares Core S&P 500 ETF IVV, State Street SPDR S&P 500 ETF Trust SPY SPY and Invesco QQQ Trust Series I QQQ, which mirrors the Nasdaq-100 index. Any positioning reset will likely favor those equities, he said.

"In an environment where liquidity remains thin and trading is increasingly concentrated in passive vehicles, these reallocations can have an outsize impact on price action," he said.

Washed out investor sentiment, with the AAII Bull/Bear spread now at its lowest in three months, and seasonal tax winds for April - the second-best month for S&P 500 returns since 1928 - also bode well for stocks next month, said Rubner.

The retail segment, which has been a notable supporter for stocks in the past, such as after the so-called liberation day tariffs last year, is also showing more of a holding pattern rather than a selling one. The strategist said those investors are likely to continue buying the dip, once the market gets a clear sign that geopolitical tensions are fading.

Read: The same Polymarket trader who predicted the start of the Iran war is now betting on a cease-fire by next week

-Barbara Kollmeyer

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March 24, 2026 09:26 ET (13:26 GMT)

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