VIX pulled back from a test of its March 2 high at 26.22 a week ago, closing above Short-term support at 18.83. The next probe higher may exceed the prior high in the next 1-2 weeks.

(Bloomberg)  The prime suspects in last month’s global rout may be at it again.

Inverse exchange-traded funds — which use leverage to bet against stocks and volatility indexes — have seen trading activity skyrocket to ominous levels as markets have whipsawed in the past few days. In fact, turnover has only been higher two other times since the financial crisis: in 2016 during a correction and in February when a surging Cboe Volatility Index forced short funds to unwind.

SPX bounces off Long-term support

SPX bounced off Long-term support at 2587.71 but was stopped at the 2-year trendline near 2675.00. The corrective bounce appears to be over and a decline beneath Long-term support may open the door to a much deeper decline. The broken trendline suggests that the entire two-year rally may be retraced in a very short time.

(CNBC)  U.S. stocks rallied on Thursday, the last trading day of the month and the quarter, as the technology sector curbed steep declines seen in recent sessions.

The Dow Jones industrial average rose 254.69 points to close at 24,103.11, with Intel rising 5 percent. The S&P 500 gained 1.4 percent to 2,640.87, with tech rising 2.2 percent. The Nasdaq composite advanced 1.6 percent 7,063.44.

Transports also climbed 2 percent, but were still deep in correction territory.

NDX bounces at trendline, Long-term support

The NDX challenged its Short-term resistance at 6762.40 before declining to its Long-term support and 2-year Diagonal trendline at 6388.08. It is on a confirmed sell signal. Breaking through the Long-term support makes it possible to decline to the Cycle Bottom at 3783.88 in short order.  

(Reuters) – Fund managers have begun to ditch so-called FANG stocks that powered the U.S. stock market to record highs in January and are slowly rotating into commodity-related shares and other value stocks which typically outperform in late-cycle recoveries.

Portfolio managers holding shares of Facebook Inc (FB), Amazon.com Inc (AMZN), Netflix Inc (NFLX), and Google-parent Alphabet Inc (GOOGL) say they are increasingly concerned that the data scandal that has sent shares of Facebook down nearly 15 percent year-to-date will spill over into all of the FANG stocks, imperiling the broad market’s momentum at a time when there are no clear companies or sectors to take their place.

High Yield Bond Index bounces at February low

The High Yield Bond Index bounced near the February low, then rallied back to challenge the long-term trendline.  A broken Diagonal trendline infers a complete retracement to its origin. This may happen in a very short period of time.

(Reuters) – The junk bond rally may be over, but investors should not expect a sharp unraveling.

Low supply in new high-yield bond offerings has kept prices afloat despite persistent investor outflows. High-yield bond funds have had net outflows in 10 of 13 weekly periods this year, totaling roughly $18 billion, according to Lipper data, as fears of rising interest rates have driven investors to other markets.

After a decade of declining yields and worsening covenants, outflows in the junk market have returned some power to buyers.

UST rises toward Intermediate-term resistance

The 10-year Treasury Note Index made a solid rally above Short-term support at 120.47 toward Intermediate-term resistance.  A breakout above resistance may help the bullish case for UST. However, there is some indication that the rally may be short-lived.

(Bloomberg)  The yield on the 10-year U.S. government bond continues to defy conventional market views. Instead of marching up to 3 percent, if not higher, as many expected, it fell this week to below 2.80 percent, its lowest level in almost two months. The reasons matter for a wide range of markets, as well as for policy thinking.

Increased risk aversion is the most-cited immediate explanation. According to this interpretation, the recent pickup in market volatility, together with two notable air pockets for stocks this year, is pushing investors out of stocks and to safe assets. Treasuries are the greatest beneficiaries of this flight to quality, which is a particularly important warning indicator for high-risk market segments that lack a sufficient depth of investor support.