The Nasdaq 100 (QQQ) is enjoying its third-best trading day in more than two years, surging over 3% higher on Wednesday. Headlines are buzzing, bulls are cheering, and some investors are wondering if this is the long-awaited end to the bear market that’s been gripping stocks since early 2025.
Let me be clear: it isn’t.
While the market’s bounce is making headlines today, the reality beneath the surface tells a different story - one that ends with lower prices in the weeks ahead.
This is a rally driven by political posturing, light volume, and technical trends that are still firmly bearish. And for anyone who’s been through a few of these market cycles before, that spells one thing: opportunity.
Let’s break down what’s driving this short-term rally, why it won’t last, and how to position for the next move.
The catalyst behind today’s market surge is easy to identify.
Last night, President Trump softened his tone on two major issues that have been weighing on stocks for months: Jerome Powell’s future as chairman of the Federal Reserve and the ongoing trade war with China.
After weeks of speculation that Powell’s job was in jeopardy, the President signaled he has no immediate plans to replace him. That alone gave the market a temporary sense of relief.
But it was the pivot on trade that lit the match. Trump hinted that the current 145% tariff on Chinese goods could come down “substantially,” a notable shift from the administration’s hardline stance.
This kind of headline-driven rally is nothing new.
Markets move fast on any perceived easing of pressure, especially when the news comes from the top. But here’s the thing: markets have seen these tone changes before, and they’ve learned to be unimpressed.
If this were the end of the bear market, we’d see something critical happening under the surface - volume. That’s not what we’re seeing.
Despite the Nasdaq 100 climbing more than 10% since bottoming out on April 7, volume has been conspicuously absent.
In fact, the average daily volume for the Nasdaq 100 is hovering near its lowest readings in two months. That means prices are moving higher, but fewer buyers are participating in the move.
This kind of thin trading is a hallmark of a relief rally, not the start of a new bull run. It’s the market equivalent of a tree falling in the forest with no one around to hear it. The prices move, but the conviction isn’t there.
Add to that the consistent inconsistency of the White House’s messaging, and you’ve got a recipe for uncertainty.
Investors aren’t betting on these headlines sticking.
They’re reacting, but they’re not committing.
Even today, while stocks rip higher, the CBOE Volatility Index (VIX) refuses to collapse. That hesitation in the options market tells you everything you need to know—this rally doesn’t have legs.
Let’s talk about where this rally is likely to run out of steam. Technicals are in control of this market. Headlines can deviate prices for a day or two, but the trends always win.
For the Nasdaq 100, the next key level is crystal clear. Expect the index to rally toward the $475-$480 range, but don’t expect it to break through. Here’s why:
The market’s momentum began deteriorating months ago, and the 50-day moving average reflects that weakness. As prices approach this resistance zone, expect sellers to step in, “selling the rip” as they prepare for the next leg lower.
For investors still holding long positions in stocks or ETFs like the Nasdaq 100 (QQQ), this rally is a gift. It’s a short-term windfall that should be used to re-position for what’s coming next.
Even as I’m writing this, the Nasdaq 100 has pulled back nearly 1% from its intraday highs. That lack of follow-through speaks volumes about the market’s commitment to this rally—or lack thereof.
This isn’t about being bearish for the sake of it. It’s about recognizing that bear markets don’t end on soft political promises or thin rallies. They end when the fundamentals shift - and we’re not there yet.
What we’re witnessing today is the market taking a breath - a sigh of relief after weeks of pressure. But relief rallies in bear markets are notorious for their speed and their short lifespan. They offer a quick burst of optimism, only to hand the reins back to the dominant downtrend.
The political landscape remains volatile as do the implications of an economic slowdown.
The President’s tone may have softened for now, but as we’ve seen time and time again, that can shift overnight.
If the Fed doesn’t lower rates in May, or if trade talks stall again, expect the selling pressure to return in force.
In the meantime, this bounce offers a rare opportunity to position for the next leg lower.
The Nasdaq 100’s technicals haven’t changed. The 50-day moving average remains bearish, volume remains light, and the VIX refuses to collapse.
For now, the writing’s on the wall. Take what the market gives you - but don’t get too comfortable.
