Fear is Here
RLT Newsletter 3/9/2026
For over a month now, I have been banging the drum of caution. Market weakness has slowly permeated the tape since October, when the QQQ carved out its high. Since then, the warning signs have shifted from a whisper to a roar. Last week added another major red flag: SPY closed below its 100-day SMA.
That was a “must-hold” level for any remaining bullish thesis. As I wrote on February 19th, in “The Deadly Flatline,” these massive consolidations following parabolic moves historically resolve to the downside, resulting in corrections of 10% or greater.
We are clearly in a distribution environment. Strength is being sold rather than bought. Even when companies post solid earnings, sellers step in to fade the move. In this climate, profit-taking must be quick, especially on the bullish side.
While news can flip the script at any moment, the technical damage is hard to ignore:
· Trillion-dollar Titans remain heavy.
· Financials (XLF) are under mounting pressure and heading to the 100-week SMA
· Semiconductors (SMH) are looking increasingly double toppy.
· Defensive blue chips and AI memory names are finally starting to drop.
The 200 day SMA on SPY is the next key support, with $656 to $653 needing to hold. It looks like those levels will likely be tested as on Monday, just five days after SPY’s initial break of the 100 day SMA. I have been saying for weeks that when these ending diagonal patterns finally resolve, the move tends to be violent and you do not want to be caught on the wrong side of it.
If the $653 level fails quickly, it could trigger a fear driven waterfall similar to what we saw in 2025. While we caught the absolute bottom in 2025 in the RLT Newsletter, I do not expect to replicate that quite so perfectly this time around.
That said, I have already outlined the specific levels where I would begin buying again for longer term position trades if selling intensifies. The prior all time high around $613 and the 100 week SMA near $602 are the most important levels this chart is offering right now if we do start moving a lot lower. There are additional support levels below the 100 week SMA, but there is not much standing between $653 and $613.
SPY Daily Chart
Bitcoin: A Canary in the Coal Mine
Bitcoin is once again leading the way, just not in the right direction. After peaking on October 6th, it has sold off roughly 52% peak to trough.
History is rhyming here. In 2025, Bitcoin topped first, rejected at its 100-day SMA, and then tumbled alongside the SPY. When the SPY dropped 21% in the 47 days following its February 19th high, Bitcoin fell by a similar 23%.
If that correlation holds, Bitcoin may be getting close to a short-term low. That remains my base case. From there, it could offer a solid buying opportunity for a “B-wave” bounce over the next couple of months before its finally drop lower.
The downside targets to watch:
$58,000 (200-week SMA): A roughly 10% drop from the current levels.
Low $50,000s: An 18% correction from current levels.
BTC Daily Chart
The 2022 Comparison
Many traders are eyeing the 2022 bear market structure. While the market rarely mirrors the past exactly, the comparison is interesting. If we map 2022 onto today, we are roughly/exactly at the June 4th, 2022 candle. Under that framework, we would be roughly halfway through this bear market in terms of both price and time. If this script continues to play out, we should expect:
One more vertical drop.
A long sideways corrective period.
A final capitulation drop.
Bitcoin often bottoms on extremely bad news and tops on extremely good news. I expect the final low to coincide with some kind of headline-driven panic.
BTC 2022 Bear Market
The Bottoming Window
I think the earliest this bear market could end would be May 2026. However, a more realistic window falls between July and October 2026.
I also think it is quite probable that Bitcoin ultimately trades at a price starting with a 4 before this correction is finished. My ideal scenario would be a drop toward $38,000. That level would essentially trap every buyer of the spot Bitcoin ETFs. It resembles a pattern we often see in technology IPOs, where the price falls back below its IPO low before beginning the next major leg higher.