By Doug Busch
A bear market takes its name from the way a bear attacks, swiping its paws downward, an apt image for falling prices. But the metaphor runs deeper than a single motion.
A bear is a patient, calculating hunter. It stalks quietly, tests its prey, strikes, then retreats, only to circle back again. Each encounter drains a little more energy and confidence. In markets, the pattern feels familiar.
Sharp selloffs are followed by brief, hopeful rallies that fade just as quickly. Over time, investors grow weary. Optimism erodes into caution, then resignation. Like prey worn down by a persistent predator, participants don't collapse all at once; they give up gradually until the fight leaves the market altogether.
There are clear parallels in today's market. Many corrective phases unfold gradually, over time rather than immediately in price. The sharper declines tend to come later, after market participants begin to concede.
Bear markets rarely emerge without warning, not that one is necessarily at hand, but subtle signs of distribution often build quietly before becoming more pronounced. Consider technology.
The Invesco QQQ Trust began to show signs of weariness last October, notably with a doji candle on Oct. 29. It has not revisited that peak since.
The divergence between growth and value is also evident in its relative performance against the S&P 500. A rounded top formation beneath the very round $600 level on March 18 pushed the ETF below its long-term 200-day simple moving average in the following session. Even now, the fund sits just 8% below its 52-week highs, despite a sharp 3.4% rally on March 31.
Such abrupt rebounds are often characteristic of markets under stress. There is a slim chance the gap could be filled from May 9 session just below $500 sometime in mid 2026.
The Invesco QQQ Trust was trading around $582 Thursday.
Weakness rarely stays contained. It often begins in more vulnerable market corners, such as software, before quietly spreading. What starts as isolated selling gradually seeps into stronger groups such as semiconductors, which had previously led the advance. As leadership falters and fewer sectors provide support, the selling becomes more indiscriminate. By the time the strongest areas begin to crack, the shift in market tone is usually well under way.
The VanEck Semiconductor ETF has formed a bearish head and shoulders pattern and is now stuck between its downward-sloping 50-day simple moving average and 200-day moving average. Notice the bearish RSI divergence too as price made a higher high while the Relative Strength Index made a lower high. I wrote about how Nvidia and Micron have looked vulnerable recently.
The VanEck Semiconductor ETF was trading around $390 Thursday.
Long-duration technology stocks are especially vulnerable as interest rates rise. Tech stocks are sensitive because much of their value lies in earnings far in the future. I discussed this topic two weeks ago, and it continues to be a concern. The Cboe Treasury Note Yield 10 Year Index is striving for its first four-week winning streak today, which would be its first in 11 months. The break above the bearish descending triangle I mentioned recently is now being retested and look for this to resume its advance upward, potentially toward 5%, where it peaked in late 2023.
The Cboe Treasury Note Yield 10 Year Index was trading around $43.10 Thursday.
Market tops are a process, not an event. They tend to form gradually as confidence begins to fracture, often invisibly at first. Leadership narrows, with fewer stocks carrying the advance, even as headline indexes appear stable. Beneath the surface, selling pressure broadens and rallies lose conviction. What looks like resilience is often the final stage of exhaustion, until participation fades and the weight of distribution pulls the market lower.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 02, 2026 12:35 ET (16:35 GMT)
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