“Dead cat bounce” failure might lead to brief test of lows before rally

The chart in this report is only accessible to members
The chart in this report is only accessible to members

Markets arguably are nearing a low, and while that likely is not in place just yet, it should bottom out in the month of April, potentially in the next 3-5 trading days on a test/minor break of early week lows. The resulting bounce into June-August will say much about whether a larger correction/bear market and/or recession can be avoided.   At present, trends, momentum, and breadth remain quite negative, but SPX has officially reached the 50% retracement of the entire bull run from 2022-2025.   Furthermore, some extreme signals are now being recorded with regard to volume, breadth, and sentiment, which normally occur at/or near market lows. While markets remain extraordinarily volatile given a VIX that remains over 50, the risk/reward should be excellent with those who have at least a 2-3 month timeframe. Unfortunately, Tuesday’s continuation of Monday’s rally from the lows lacked staying power, given how strongly negative momentum has gotten in the last few weeks. This remains a bottoming process, not a bottom, but a break of early week lows would satisfy the wave structure to bring about a possible low to this decline.

Additional reasons why a test/break of April lows would likely br...
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