The market got exactly what it didn’t want today: sticky inflation and a failed bounce. The March PCE report came in hotter than expected, and instead of igniting rate cut hopes, it triggered a sharp selloff in tech and growth stocks. Bond yields fell—but not because of dovish bets. This was a defensive repositioning into quarter-end, confirming what liquidity and cycle charts were already warning. In today’s WSE Market Update, we break down why the bounce is over, the cycle is still in control, and the window just slammed shut.
Wall Street Narrative
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“PCE came in hot—and the market has no cushion left.”
Sticky inflation surprised traders expecting a cooler print. The narrative pivoted instantly: instead of rallying on a soft number, markets are absorbing the shock of no disinflation and no obvious relief ahead. -
“Yields are down, but this isn’t a Fed pivot—this is a flight to safety.”
The 10-year yield dropped on the day, but tech and high beta are still getting crushed. Bond buying looks like a defensive repositioning, not a vote of confidence. -
“Quarter-end bid? It’s MIA.”
What was supposed to be a supportive rebalancing window is turning into a sell-the-rip fade, with managers reducing exposure instead of marking up. -
“AI leadership is breaking down.”
Names like SMCI and NVDA are now underperforming on down days, erasing the last pillar of speculative support. Growth is being sold even as yields fall, confirming positioning stress.
Just the Facts, Ma’am
Yes, PCE came in above expectations, and the market isn’t rallying—it’s cracking. That confirms what liquidity data already suggested: macro prints can’t override a deteriorating liquidity regime.
Falling yields aren’t bullish—they’re a hedge. When tech sells off into lower rates, it signals not a policy pivot, but capital flight. Money is moving to safety because risk assets can’t hold up—even with tailwinds.
The S&P’s rejection at the cycle chart wave resistance projections (chart below) was the technical trigger. The Technical Trader Cycle Wave Composite™ remains deeply negative, despite the recent rebound. The bounce is dead. A multi cycle downtrend is in full control now.
Quarter-end repositioning is defensive, not supportive. Managers are selling into strength—or what little strength remains. There’s no window dressing bid. There’s just the window.
Verdict: Strong Reject. The market is not merely confused or uncertain. Uncertainty is a euphemism for capital destruction.
The market is no longer pretending. Liquidity pressure is overwhelming narrative drift. This move has downside follow-through written all over it.
S&P Daily Chart Analysis
This chart shows the S&P 500 Volatility-Adjusted Cycle Wave Bands and the proprietary Cycle Wave Composite™ developed by Lee Adler. The index failed again at multiple wave band projection lines and is now accelerating lower, confirming that the recent bounce was another failed rally in a continuing cycle down phase.
The Cycle Wave Composite™, shown in the bottom panel, remains in deep negative territory, with no visible upturn in either the short-term or intermediate-term waves. The price action reflects a textbook rejection at resistance, followed by decisive downside momentum.
Additional indicators (available to subscribers in the full Technical Trader weekly updates) include deconstructed cycle wave components and short-term momentum oscillators, which signal thrust exhaustion and turning point risk. These confirm the breakdown technically, structurally, and tactically.
The message is clear: the bounce failed, the downtrend remains intact, and downside continuation risk is elevated into early April.
AI’s Take
This is exactly the setup we’ve been warning about: a reflex rally inside a larger cycle downtrend, now breaking down as liquidity runs dry. The hotter PCE print simply removed the last excuse. This isn’t confusion—it’s realization.
Conclusion: The breakdown is real.
Recommended Action: Initiate or expand tactical short exposure where technical triggers align. No new long positions until the cycle composite turns. This is a downtrend in control.
This is AI-generated analysis based on Lee Adler’s proprietary cycle chart. It is not a product of Lee Adler or the Liquidity Trader Technical Trader service.
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Liquidity Trader’s Technical Trader delivers weekly market timing and trade ideas for professional investors, grounded in Lee Adler’s 55 years of experience applying Hurst Cycle theory in real-world conditions.
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