Wall Street opened higher on Monday, one trading session after the worst single-day decline of 2026 — a 2.64% drop in the S&P 500 that erased roughly $1.8 trillion in market value. The Nasdaq Composite, hardest hit with a 4%+ plunge in the NASDAQ-100 on Friday, led the rebound, with QQQ surging approximately 2.1% to $720.
The recovery came amid easing geopolitical tensions (Iran-Israel developments) and dip-buying in the tech and semiconductor stocks that bore the brunt of Friday's selling. But technical analysts on X are refraining from declaring an all-clear — instead framing the session as a test of critical support levels.
What the experts are saying
The dominant framework on X is Elliott Wave analysis of the S&P 500. The rally from the March 30 low near 7,046 is widely counted as an extended impulse that completed a fifth wave at the June 2 high of 7,620.
Analyst @MMatters22596 has been active in recent days, commenting on several tech names. He describes $SOFI as "still looking choppy," suggesting one more drop to mark a bottom. He also flags $IREN as attractive in the AI infrastructure space, and $LITE in photonics as a potential critical component in the AI supply chain.
Trader @AsafNaamani has focused on $IBM's bullish weekly chart structure, identifying the $313.49–$320.70 zone as a key area that needs to flip into support for the uptrend to continue. Separately, his analysis notes negative divergences in SPY and QQQ — a technical warning that can precede a correction even at the index level.
Active options trader @ultrawavetrader continues to manage live positions through the elevated volatility, without signaling any major shift in exposure.
On the broader wave count, technicians identify 7,336 as the critical support level — the wave ((ii)) low — a break below which would signal that the March-to-June advance is over. Additional support lies at 7,135 (the 0.382 Fibonacci retracement) and, further down, near 6,300.
Why it matters
A sharp sell-off followed by a quick bounce is a genuine test of market character. A fast recovery signals strong demand and "buy the dip" conviction. But when technical analysts talk about completed wave structures, negative divergences, and make-or-break support levels, the bounce may be a corrective move within a larger downtrend rather than a resumption of the bull.
This week, the focus will be on whether the S&P 500 can reclaim 7,500. A move above that gives the bulls momentum. A break below 7,336 sends the opposite signal.
The bottom line
Markets bounced on Monday, but technical analysts on X are not taking the rally at face value. "Buy the dip" has worked well in 2026 — so far. But the divergence between the Nasdaq's strong recovery and the Dow's modest gains, alongside bearish divergences in index breadth, raises the question of whether this is just a correction within a larger downtrend. The coming weeks will provide the answer.
