S&P 500 Needs One Key Ingredient for Bottom
It was another difficult week for U.S. stocks as a 10% correction was reached on several major indices, such as the Dow Jones Industrials ($INDU), Nasdaq 100 ($NDX), Russell 2000, and more. One key index whose losses have fallen short of that 10% correction threshold is the S&P 500 ($SPX), though it's not by far.
The Cboe Volatility Index ($VIX) surged 16% last week to close at 31.05, the first close above 30 since the cyclical bear market ended in April 2025. That might suggest that panic is in the air, but it's clearly not. Panic selling typically leads to very heavy volume, large losses, and a capitulation. But look at the daily volume throughout March 2026 and compare it to the volume we saw at the S&P 500 lows in April 2025. It ain't even close!
I cannot see the VIX topping without at least some corresponding increase in volume to help mark a significant bottom in the S&P 500. Nothing is a guarantee, but, to trust a bottom, I feel like we need to see capitulatory-type volume accompany a panicked low, similar to what we saw at the bottom in April 2025.
Also, after months of hanging onto critical price support, the most influential area of the market, technology (XLK), lost its key price support in the 134–136 range over the past two days.
Technology represents roughly 33% of the S&P 500, so seeing this very influential group lose price support is alarming, to say the least. Just as alarming, however, was the lack of volume to accompany such a significant loss of support.
What's Ahead In Q2?
At the beginning of every year, we host a MarketVision event, and January 2026 was no different. We discussed a very challenging market ahead in 2026, and I think we can all agree that we nailed that. I even discussed the strong likelihood of a correction in the first half of 2026. Now that we've essentially seen that, what's next? Well, we'll discuss exactly that in our first MarketVision 2026 quarterly update for our EarningsBeats.com members on Monday after the market close. We are currently offering a substantial $200 discount on our annual membership. If you'd like to join our growing membership and listen to our Q2 forecast, CLICK HERE for details of our offer.
Happy trading!
Tom
