Additional proof that US Equity market lows are likely in place

Markets look to have bottomed on 3/13, coinciding with the surge of fear into mid-March. The resulting bounce happened on much higher than average breadth and volume, making a tell-tale technical low that many refused to believe given the lack of proper downside volume capitulation. Technically speaking, the rebound in momentum as a factor looks important, as this group was hit adversely hard in recent months. Furthermore, the combination of cycle composites bottoming coinciding with fear having spiked to multi-year highs was an important development. As discussed, most “Magnificent 7” issues experienced short-term deterioration only and had failed to break weekly uptrends. Moreover, SPY, QQQ, and DJIA have now successfully exceeded their downtrends created in February, and the Elliott-wave structure looks positive for a meaningful move up into April. While it’s difficult to call for indices to carry straight higher back to new all-time highs without any meaningful backing and filling, I feel like any stalling out and pullback happens from much higher levels and likely begins sometime in May. Overall, it looks right to favor Growth stocks and overweight Technology, Financials, Industrials, and Consumer Discretionary.

Our recent low coincided with quite a few important Technical developments:

  1. Consumer Staples sold off sharply most of the week into the 3/13/25 low. Seeing a defensive sector like this, which had previously been rallying during the stock market correction, suddenly start to lose ground looked to be a key sign that a low to the decline could be near.
  2. NYSE Advance/Decline surged off the lows for two consecutive days, registering more than 90% Advancers/Declining issues, which is rare and proved bullish.
  3. Equity Put/call ratio finally pushed above 0.90 into mid-March. This was roughly in-line with levels that have marked Stock market lows over the last year.
  4. Advance/Decline in volume spiked to show more than 80% of the volume on the upside back on 3/14/25.
  5. VIX, the CBOE Implied Volatility index, started to turn lower ahead of the broader market bottoming. It's three sharp down days right ahead of SPX bottoming, which proved important despite SPX also closing lower until 3/14/25.
  6. My cycles composite bottomed Friday, 3/14/25.
  7. Weekly charts of $AAPL, $META, $GOOGL, $AMZN, $NFLX, along with QQQ had all pulled back to test, but not violate, intermediate-term uptrends from 2022/2023 lows.
  8. AAPL, which remains one of the most important stocks within SPY and QQQ, has now managed to recoup former lows at $219.38 (1/21/25).  This is a bullish development, technically speaking, and should begin to drive this stock higher back to new all-time highs.  Given AAPL’s weight in SPX and QQQ, this is certainly a technical positive.
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