Equity bulls managed to hold the line this week at the 50-day moving average for the S&P 500 but they have their work cut out for them Friday on slowing economic growth in China and concerns over U.S. bank earnings.

SPDR S&P 500 (NYSEArca: SPY), the largest ETF by assets, has bounced the past two days but was set for a lower open Friday.

“The S&P 500 has regained a footing above its 50-day exponential moving average. Internal health has improved sharply over the past two sessions with the percentage of stocks trading above their 10-week moving average jumping back above 50%,” said Tarquin Coe, technical analyst at Investors Intelligence.

“So far both the price and breadth recovery is looking similar to that of mid-December 2012. A reassertion of the general uptrend looks to be underway and only a close beneath Tuesday’s low of 1357.38 would call for a reassessment,” Coe said in a strategy note Friday.

The S&P 500 has rallied 11% year to date although the blue-chip index is in negative territory for April on weak U.S. jobs data and speculation that further stimulus from the Federal Reserve may not be in the cards. [Stock ETF Rally Stalling in April]

Financial sector ETFs were poised to open lower Friday after quarterly results from JP Morgan (NYSE: JPM) and Wells Fargo (NYSE: WFC). [Financial ETFs Slip on Earnings]

Separately, China said first-quarter economic growth rose 8.1%, a bit below expectations. [China GDP]

SPY was down 0.3% in Friday’s premarket. S&P futures were trading just south of 1380.

SPDR S&P 500

Full disclosure: Tom Lydon’s clients own SPY.

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