Mar 16 – Mar 20, 2026
Fast Flush or Slow Death?
by Nick Schmidt · March 21, 2026
Second week fully cash and happy to be here. Every day had a bounce that felt like something was changing but the stocks leading these moves were the most beaten down names, stuff well below their moving averages with no structure, and that's usually a warning not a signal. It's not our job to time the bottom, just to be involved when the odds are the highest.
The groups that have been diverging and actually holding up, space, opticals within telecom, data centers, memory, they've been the last ones standing while everything else has broken down. The big question all week was whether they crack and come down with the market or keep strong and pull things around. Friday was the first sign of them starting to break and that's a good start, finally some flush action. If these remaining groups actually crack the correction deepens quickly because there's nothing left holding the market up.
The question now is what kind of correction this turns into. Do we crash fast similar to Covid and last April and get to a new uptrend quicker, or do we have a similar downtrend like 2022 that is longer in duration with the same choppy action we've seen recently where we keep bouncing and making lower highs. Or did we already bottom and just go higher from here? You never know, but for that to happen and sustain a new uptrend we would need to see a serious change and improvement in leaders broadening out.
Current Holdings
0% invested|100% cash
SymbolAvg CostLastP&L
Cash.
Day by Day
Monday
—Compression Mode2026-03-16Relief bounce but still in a short term downtrend which is the whole reason we're waiting for a follow-through day before doing anything. The market feels stuck in compression mode where every bounce gets sold and every dip gets bought and we just go nowhere. Crypto had notable relative strength today which I thought was worth paying attention to because crypto tends to be a decent risk on/risk off indicator. If that strength continues it could be an early sign of broader risk on showing up but it's just one thing to watch and that's it.
- Crypto relative strength worth watching as a potential early risk on indicator, just something to keep an open mind about
Real-time posts from this day (2)
Tuesday
—Weekly Charts Don't Lie2026-03-17Stocks bouncing big with software showing the most strength which I don't love to see because it's been the most beaten down group. That's usually more of a junk-off-the-bottom bounce than real rotation. I pulled up the weekly charts on most of the names leading the move and they all looked the same, broken charts well below their moving averages with no structure. Up big on the day sure but zoom out and there's nothing to get excited about.
- RKLB showing strength today, if it follows through with some of the other space names like PL, ONDS, ASTS those would be quality stocks to be participating in
Wednesday
—Faded Into Close2026-03-18Market faded into the close again. Ugly close which I actually prefer because it gets us closer to the kind of selling that creates a real bottom. Not a high probability environment.
- NBIS had a strong gap higher but couldn't follow through, filled the gap and still held so the chart is fine, data centers another growth area to watch when things turn
Real-time posts from this day (3)
Thursday
—Don't Be Fooled2026-03-19Market bounced and it felt strong and I'm sure a lot of people bought it. But downtrends have some of the biggest bounces and they feel strong and convincing and we've seen this exact action repeat for weeks now. There was nothing the market could do in one day that would repair the damage and make me want to get involved, doesn't matter how strong the close is. Not our job to catch the bottom and be the first ones in.
- Individual stocks getting hit hard even though the indexes are relatively flat, the damage is under the surface
Friday
—Finally Seeing Selling Pickup2026-03-20Increased selling, new lows, happy to be in cash. The last remaining growth leaders that have been holding up are starting to show cracks. Goldman Sachs and the big institutions are still out there telling you we're going to rally which is usually not what you see at a real bottom.
Lessons
01
When junk leads, be careful
Tuesday the most beaten down groups were leading the bounce and that's usually not a good sign. It's something William O'Neil talked about, when you see junk off the bottom starting to lead it's usually a warning. In a healthy or strengthening market you want to see growth stocks near 52-week highs breaking out of constructive bases, not stuff that's been making lows suddenly just bouncing. Easy to miss when everything's green on the day.
02
Downtrend bounces are the trap
Counter-rallies in downtrends are some of the strongest looking bounces you'll see. They're convincing and stuff moves a lot which is why they trap people. Stay zoomed out and wait for an actual follow-through day instead of trying to catch the bottom. 2022 had tons of strong rallies that sucked in buyers who thought it was the bottom only to make lower highs and sell off to new lows. The weekly chart filters out all of that noise.