Are We About To Have Another Leg Up?

Markets are rebounding hard, a rare breadth signal flashes, and crypto may be trying to stage a comeback.

Markets on Pace for Best Week Since June

As of Wednesday's close, U.S. stock indexes (NYSE:SPY) (NYSE:VOO) (NASDAQ:QQQ) (NYSE:DIA) are on track for their strongest week since June, with the Nasdaq 4.2%, the S&P 500 gaining 3.2%, and the Dow rising 2.6%.

That rebound comes after a significant dip, suggesting some traders are interpreting the pullback as a buying opportunity, possibly positioning for year-end or reacting to early signs of renewed liquidity and rate-cut optimism.

Zweig Breadth Thrust Indicator Eyes Bullish Re-Entry

The Zweig Breadth Thrust (ZBT) (a measure of market breadth that signals bullish reversal when advancing issues rise sharply) has come back into focus. Historically, when ZBT triggers (advancers jump from below 40% to above 61.5% over 10 trading days), the market tends to rally significantly over the following 6-12 months.

With broad participation returning alongside this week's rally, some chart-watchers argue this could mark the start of a new leg higher. That said, rare as it is, a ZBT isn't foolproof. Macro headwinds and earnings risk still matter.

Is Bitcoin Breaking Out?

Crypto is catching some strength, with traders asking whether what we're seeing is a bounce or a genuine breakout. Bitcoin (CRYPTO: BTC) has clawed back some ground as risk sentiment improves, and Ethereum (CRYPTO: ETH) along with other altcoins are showing tentative signs of stabilizing. Though volatility remains elevated.

If macro clarity holds and liquidity stays supportive, crypto could benefit from renewed risk demand. On the flip side, a surprise hawkish move, weak economic data, or renewed volatility could quickly wipe out gains. For now, the market seems willing to test the waters. But only time will tell if this is a sustainable reset.

Thanks for reading! Catch you in the next one!

For more updates throughout the week, follow @WOLF_Financial

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.