MarketMapTM Weekly

The price model on the leading narrow sector of high tech suggests this market has higher to go based on its momentum and price structure. Markets rarely make their peak and final price turn with an RSI reading making new highs at the same time. That's exactly what we have happening now in the semiconductor sector as well as the broader high-tech group.

The group that saved the bull market has been the AI high-tech sector — a self-apparent truth. Based on price structure, its momentum breakout suggests more advance to go. However, it did reach climactic action last week, as seen on the weekly bar, and the price structure in the right-hand chart window from the March 30 low counts as a completed impulse wave, suggesting a short-term correction is expected.

Our timing model was also looking for a change of trend at the end of April / early May, and we commented last week in our Annual Scenario Planner that a change-of-trend date was due May 4th or 5th. We would not be surprised to see that correction take hold today. We don't view this as a tradable bear situation; the correction will be moderate at best. The bigger story is what we expect to happen once we get the rest of this bull market out of the way.

Without getting into debates about what knowledge is, I can say for certain that when bond prices come out of this holding pattern, it will be a high rate of change, pro-directional trend.

ContraryThinker knows the volatility — the context — that the bond market is about to experience. Based on price alone (big base for over 18 months.) The question we need to answer: when will the breakdown occur, and in which direction?

The chart shows bonds against gold, silver, the commodity index, and crude oil. Silver and gold are currently positively correlated to the price direction of bonds; the commodity index and crude oil are negatively correlated. That gives you a clue.

The red vertical lines highlight what our volatility model identifies as panic buying or selling, depending on direction. It's very good at pinpointing pivots — both highs and lows — and we've tested it as a buy/sell signal in various forms. It has proved its merit. Right now it's showing signs of a low pivot.

Yes, there is a nuance with the technical event number one being used as a coincidental setup for breakout systems. That suggests that a breakout could be occurring now. However, the other ingredients for the breakout, or in this case breakdown, are not quite there yet.

So if it is a panic low or bonds getting ready to make a big breakout? And what would be the catalyst? Well, we've got Jerome Powell retiring this week as Fed chairman and a new Fed chairman coming on board on the 15th. However, that does not line up as anything of any great magnitude.

What is worth noting is that the panic low noted by the red vertical line did produce a minor, very short-term, few-day rally in the market. It's the price low that had been generated on that day that became a trigger that traders should keep an eye on. If that price low gets taken out, we believe that there will be carryover or follow through on the break down.

You would naturally assume bonds up, stocks down should as a counterbalance, but they're currently in gear — which tells you a story of no help. If stocks fall on fear of deflation or recession, bonds should rally. That's where cash flows. The "bulletproof" 40/60 portfolio depends on it. Right now they're moving together — early signs of hyper-correlation — but that isn't the main problem,that will be the undoing of the Great Bull Market.

Bitcoin is showing a growing negative correlation to bonds: bonds up, BTC down, and vice versa. That has been BTC's dominant theme for all of 2026. Interest rates don't affect BTC either, which on its face tells us little.

But it does set up a confirming signal. Bitcoin is the premier risk market — the playground of the biggest risk-takers. When bids get pulled there, it's a leading indicator that the large players in the stock market stock market have become risk averse. Crypto tops are almost always at least coincident with equity tops, and often lead them. Identifying the trigger level for BTC to turn bearish again gives us one of the cleanest early warnings available.

The other confirming signal to watch: gold and silver breaking their current positive correlation with bonds. If the metals decouple and reassert themselves as the true alternative to intangible assets — the asset of choice when geopolitical tension intensifies — that's the a strong suggestion that the Great Bull Market's peak is in place and big money is going elsewhere. And our position is that it will be moving into hard assets; and just not to the traditional and obvious areas as well. More to follow in particulars.

The battle cry on interest rates and the US dollar is simple arithmetic. If rates go up, international flows move into US government bonds because rates are better here than anywhere else. The dollar strengthens. So there should be a negative correlation between bonds and the dollar, and that has been the case throughout 2026: bonds down, dollar up.

If that negative correlation holds, and if the mini panic low in bonds is in place as suggested, we get the counter-trend B-wave triangle we forecast coming into the year — one last thrust to the upside, retracing 38% of the bear market that started from 2021. That finishes the counter-trend, and the secular bear in bonds reasserts itself.

We can't think of one catalyst in a rational world that would send rates lower unless it's a crashing economy, a crashing stock market, a crashing oil market, a crashing commodity complex, and a crashing inflation picture, all of which would be giving the new Fed chief his argument to cut rates, even with a split Board of Directors he'll have to manage for the first time since the Clinton administration in 1992.

However, given the systemic change that has occurred with the onset of the U.S.-Iran conflict, the Contrary Thinker feels the intangible risk market is fragile and doesn't have many excuses left. Independent of whether the US–Iran ceasefire holds, we don't think inflation is going away. After the 2022 bout (Russia's invasion of Ukraine,) we predicted inflation would be sticky. We forecast an inflationary 2026 back at the end of last year. There are more reasons now than ever — and new ones daily — fundamentally supporting that forecast.

Given everything that we've said above and suggesting that the Annual Scenario Planner published last Friday, April 8, is something to get excited about in terms of timing for our Strategy and Tactics.

The bottom line from above is that everything is seemingly interest-rate-sensitive at this point in time, even though the correlations may not make clear sense. But the sensitivity is still there. Hence, our focus is the timing of interest rates, whatever the catalyst proves to be. The COT map of interest rates shown here falls right in line with what the we called a fingerprint for accidents in our Annual Scenario Planner, published late last week. The timing of that map points strongly to a spike in rates.

The convergence — interest rates pressing higher, the dollar following, the metals correlation primed to break, and Bitcoin's bid vulnerable — are expected to all set up early June as the change of Trend and Dynamics Time Window. That's where the best and greatest opportunities for trading long volatility are setting up. A change of trend could hit earlier than that, but the weight of the timing evidence sits in that early-June period.

If and when there were any new discoveries that would change those expectations, membership will be first to know.

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Stay contrary.

JCC

Contrary Thinker insuring your future in the global equity markets.

Great and many thanks,

Jack F. Cahn, CMT+
MarketMap™ 2026 Scenario Planner
Contrary Thinker™ since 1989

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