The S&P 500 index stalled in an almost perfect text book reversal from heavy resistance at its 200-week sma near 2340 this week, that is, a rally to resistance at the 200-week simple moving average, and then a pullback.

The challenge for investors is to decide whether the late March bounce was merely a bear-market dead cat bounce, with lower lows likely, which is, understandably, a view held by many. Or that it was likely the early stages of a bottoming process, the view I outlined here last week.

The vast majority of market bottoms, with the exception of Q4 2018, involved 6-weeks to 4-months of consolidation often involving a retest or secondary low. My view continues to be that market bottoms are a process, not a single event and that a trading range is likely to develop well into, and possibly through April as the market digests what most expect to be a difficult earnings season.

Here’s my thinking: Is a market retest or secondary low consensus? After discussions with buyside managers and other technical analysts over the past week and through the weekend, I thought it was noteworthy that even those that are optimistic (cautiously, of course) expected some type of pullback or retest in 2Q, possibly 3Q, as we do.

I can’t quantify the implication of this ...

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