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Market Close: S&P 500 Rebounds 125 Points Off Morning Lows as Tariff Anxiety Fails to Stick

The tape tried to break — and failed. After a 125-point collapse at the open, the S&P 500 reversed sharply and never looked back. No quarter-end markup, no macro catalyst — just positioning stress and a bid where it shouldn’t have been. The Cycle Wave model remains on point. The real shakeout may still lie ahead.

Wall Street Narrative

“Wait—why is the market rallying into Liberation Day?”
The most-asked question of the day, and the most revealing. Traders came in expecting carnage, got early confirmation — and then got squeezed. The reversal exposed how misaligned the Street was ahead of Wednesday’s tariff shock.

“This isn’t confidence. It’s a cover.”
The rally was led by cyclicals and meme names, not defensives or fundamentals. Flows looked like short-covering and forced rotation, not conviction.

“Tech is dead money here.”
Despite the broad bounce, megacap tech lagged badly. NVDA and SMCI stayed red, pointing to a deeper unwind in the most crowded trades of Q1.

Just the Facts, Ma’am

Yes, the market rallied into Liberation Day — and no one trusted it. The S&P 500 dropped more than 125 points at the open, slicing below Friday’s low and triggering what looked like a classic continuation breakdown. But there was no follow-through. Instead, the index reversed violently, clawing back the entire loss and closing green on the day. With no macro data to lean on and quarter-end flows absent, the reversal exposed the one-sided nature of positioning. Traders leaning into the tariff fear trade simply got run over.

This wasn’t a display of confidence — it was pure positioning stress. The early bid wasn’t in staples or bonds. It was in regional banks, meme stocks, and junk tech. Gold, which had surged to a new all-time high in the morning, reversed hard into the close. The VIX spiked to nearly 18, then collapsed back below 16. This wasn’t a flight to safety. It was a forced unwind.

And tech? Still dead. Nvidia, Tesla, and SMCI all closed red. Semiconductors underperformed. The Nasdaq barely scraped back to flat while cyclicals led the recovery. For the second straight session, the generals didn’t lead. That’s not rotation — that’s decay.

AI’s Take: Agree — with Tactical Skepticism

The reversal made sense — but not because the market is strong. It happened because the short side got overcrowded, too fast, into a known event. That’s not trend change; that’s trap mechanics.

From a pure data perspective, this was a low-quality rally. Breadth didn’t confirm. Tech didn’t participate. The VIX gave back its early spike, but liquidity never rotated into bonds or defensives. What we saw was an air pocket in positioning — and it got filled.

Technically, the bounce retraced the breakdown — but didn’t repair it. SMCI and NVDA staying red was no accident. The weight of over-owned growth is still pressing down. So while today’s squeeze was expected given sentiment and setup, it doesn’t reverse the deeper structural stress.

This was a forced reaction, not a fresh trend. The model remains valid — but today’s rally says more about positioning than about strength. The next dip will tell us whether trend pressure is reasserting… or if something deeper is shifting.

The setup is live. Execution matters now.

Volatility Adjusted Cycle (VAC) Wave Chart Analysis

The volatility-adjusted cycle model nailed the stall last week — and suggested the rebound window. Friday’s breakdown put the index just below the centerline of the dominant downtrend channel, and there was follow through this morning. But the one sided selling paused as the market slightly broke the last low. That pause was enough to trigger short covering and that gained momentum throughout the day. There’s no conviction yet on the short side. Our internal polling shows that the majority remain bullish, and shorts nervous.

The rebound stopped at the centerline of a 6 month cycle proxy channel and the Cycle Wave Composite (TM) remained stalled in deep negative territory. No upside breakout has occurred.

Oher internals, which are shown in the Technical Trader client report, continue to indicate negative trend tendency. For now this move gets treated as a reactive squeeze inside a downtrend.  The confirming direction signal comes on the next high or low test.

Meanwhile, for the time that the market remains rangebound, noise prevails over signal, which is very difficult to trade. The churn can eat away at capital so Lee Adler is keeping trade commitments at a very low level for now.

For qualified institutional readers, the full model internals and risk pivots are detailed in today’s Technical Trader report.

S&P 500 technical chart showing VAC Wave model with cycle bands, downtrend channels, smoothed 200-day moving average, and Cycle Wave Composite indicator, March 31, 2025.
S&P 500 VAC Wave – Cycle Wave Model Reversal Attempt (March 31, 2025)

About Technical Trader

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. Request a complimentary copy of the latest Technical Trader Report (scroll down to form).

Each weekend, Lee outlines the active phase of short, intermediate, and long-term cycles using his proprietary Cycle Wave Composite™ and volatility-adjusted projection bands. Monday morning’s pre-market report turns that analysis into action with mechanically screened swing trade setups across 1,700+ institutional stocks.

Every trade idea is precise, time-sensitive, and filtered for risk-reward edge—ideal for professionals managing exposure and seeking tactical entry points.


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