--- title: "Just as US stocks breathe a sigh of relief, technical analysts pour cold water: Monday's rebound is merely a 'Dead Cat Bounce'!" type: "News" locale: "en" url: "https://longbridge.com/en/news/289174318.md" description: "Although US stocks edged higher on Monday, several technical analysis firms warned that the rebound is unsustainable and the summer market may remain volatile and weak. Mark Newton, Head of Technical Strategy at Fundstrat, labeled Monday's surge a \"Dead Cat Bounce,\" noting that his cyclical model has peaked and turned negative. Coupled with the unwinding of growth stock positions and stretched market positioning, he expects the S&P 500 to test previous lows. Citigroup also pointed out that the three major indices formed a \"Bearish Engulfing Pattern\" last Friday, with historical data indicating a high probability of weakness in the coming two weeks" datetime: "2026-06-09T10:31:55.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/289174318.md) - [en](https://longbridge.com/en/news/289174318.md) - [zh-HK](https://longbridge.com/zh-HK/news/289174318.md) --- # Just as US stocks breathe a sigh of relief, technical analysts pour cold water: Monday's rebound is merely a 'Dead Cat Bounce'! US stocks recorded a slight rebound on Monday, but several institutions specializing in technical analysis questioned the sustainability of this rally, warning that the market may face a volatile and weak summer session. Mark Newton, Head of Technical Strategy at Fundstrat, an independent US market research and consulting firm, stated in a post-market report on Monday that **the day's rise looked more like a "Dead Cat Bounce" than the establishment of a trend bottom.** Citing the S&P 500 Cyclical Composite Indicator, he noted that **the model shows the market is approaching a phase top and is expected to remain weak at least until late July, with downside risks potentially extending into October.** Looking at specific data, the Nasdaq Composite rose 0.9% on Monday, and the S&P 500 edged up 0.3%. However, compared to the steep declines of 4.2% and 2.6% respectively last Friday, **the rebound strength was clearly insufficient.** Newton pointed out that the S&P 500 rose about 1% during Monday's session but subsequently gave back gains to close below its opening price. More alarmingly, declining stocks outnumbered advancing ones, indicating negative market breadth, while trading volume was far below the levels seen during last Friday's sell-off. He stated: > "Both the S&P 500 and the Nasdaq-100 ETF (QQQ) closed below their opening prices. **This closing pattern suggests a high probability that the market will test and break below last Friday's lows in the near term."** ## Cyclical Model Peaks, Summer May Be Volatile and Weak The S&P 500 Cyclical Composite Indicator used by Newton is a market model that integrates historical seasonal patterns and calendar trends into a single predictive path. He pointed out that this model has already issued a top signal near current levels and has turned negative. Newton admitted that the cyclical model is not infallible; it indicates the timing and direction of a turn, not the magnitude of the adjustment. However, he emphasized that **the weakening of the broad-based index cycle from its predicted peak, combined with the large-scale unwinding of growth stock positions last Friday and still-stretched market positioning, collectively constitute strong evidence supporting a volatile and weak summer outlook.** Regarding price levels, Newton expects that **the S&P 500 may retest the mid-May level of 7,333 points in the short term. If the decline widens, it could further probe the 7,135 to 7,250 point range.** ## Citigroup's Technical Signals Echo Bearish Outlook Coincidentally, Citigroup's team of technical analysts also issued a similar warning. A report led by Daniel Tobon pointed out that the Nasdaq-100 Index, the Philadelphia Semiconductor Index, and the S&P 500 all formed a "Bearish Engulfing Pattern" last Friday (where the week's range completely covers the previous week's and closes lower, signaling increased selling pressure). Citigroup stated that historical data shows that **when both the Nasdaq-100 and the S&P 500 trigger this pattern simultaneously, there is a high probability of market weakness in the following two weeks.** Although the specific magnitude of declines varies, the overall downward trend is relatively clear. ### Related Stocks - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [SPY.US](https://longbridge.com/en/quote/SPY.US.md) - [IVV.US](https://longbridge.com/en/quote/IVV.US.md) - [VOO.US](https://longbridge.com/en/quote/VOO.US.md) - [SPLG.US](https://longbridge.com/en/quote/SPLG.US.md) - [SPXL.US](https://longbridge.com/en/quote/SPXL.US.md) - [UPRO.US](https://longbridge.com/en/quote/UPRO.US.md) - [SSO.US](https://longbridge.com/en/quote/SSO.US.md) - [SH.US](https://longbridge.com/en/quote/SH.US.md) - [SPXS.US](https://longbridge.com/en/quote/SPXS.US.md) - [SPXU.US](https://longbridge.com/en/quote/SPXU.US.md) - [.IXIC.US](https://longbridge.com/en/quote/.IXIC.US.md) - [QQQ.US](https://longbridge.com/en/quote/QQQ.US.md) - [.NDX.US](https://longbridge.com/en/quote/.NDX.US.md) - [C.US](https://longbridge.com/en/quote/C.US.md) - [C-R.US](https://longbridge.com/en/quote/C-R.US.md) ## Related News & Research - [EXPLAINER-Why SpaceX faces a longer wait to join S&P 500](https://longbridge.com/en/news/289043986.md) - [LIVE MARKETS-Wall Street's bull run appears intact, big brokers say](https://longbridge.com/en/news/289052197.md) - [ANALYSIS-US stock options watchers warn Wall Street's rally 'ripe for volatility spasms'](https://longbridge.com/en/news/288607949.md) - [Tech just pulled a 'once in 4 million years' move](https://longbridge.com/en/news/289218806.md) - [Tech sector's decade-long surge widens gap with peers](https://longbridge.com/en/news/289135925.md)