The rapid flare-up in the U.S. stock market on Wednesday faded just as quickly, with over 300 S&P 500 index stocks declining in less than two hours, suggesting that investors seeking a market bottom may need to continue to wait.

This is exactly what a series of technical indicators are showing. While U.S. stocks may rise in the next few days or weeks, there are some thresholds to cross before a true rebound begins.

Wednesday’s initial enthusiasm was based on data showing that the Consumer Price Index (CPI) for February rose at the slowest pace in four months, which likely gave the Fed reason to lower interest rates sooner than expected. But inflation is no longer the main driver for investors; economic growth and trade threats stemming from Trump’s tariff policies are. With these factors in mind, investors remain on the defensive.

“CPI is no longer relevant. Everything now is about growth,” says Patrick Fruzzetti, a portfolio manager at Rose Advisors. “Tariff news moves the markets on a daily basis. These fluctuations will be with us for a while, until a new trade agreement is reached, but I don’t think this will happen quickly.”

From a technical perspective, the S&P 500 INDEX(SPX.US) struggled after ending a two-year uptrend this week. Chart analysts believe the S&P 500 needs to recapture the 200-day moving average, which is around 5737 points. The index is currently trading near 5580 points. The technicals also reveal the S&P 500 is at oversold levels, indicating that Wall Street has turned bearish on the market.

So the question is, can the current rebound continue?

Stuart Kaiser, head of U.S. equity trading strategy at Citigroup, told clients on Tuesday evening: “We are not buyers on dips.” He still sees risks in high-priced tech stocks and believes there is less chance of a market prop-up by Trump or the Federal Reserve, especially as the U.S. president warned that Americans might feel “a little disruption” from a trade war with Canada and Mexico.

Mark Newton, technical strategy director at Fundstrat Global Advisors, thinks traders should not discount the possibility of the S&P 500 index falling to 5500 points in terms of index levels.

The 14-day Relative Strength Index (RSI) of the S&P 500 was slightly below the key level of 30 on Monday, the first time since October 2023. By the close of Tuesday, about 25% of the stocks in the index were above their 20-day moving average, another sign that investors are turning bearish. Traders typically look for less than 10% of the index stocks to be above their 20-day moving averages before issuing an all-clear signal.

Chart watchers consider stocks to be oversold when their prices have fallen too much, too quickly, and there seems to be little room to continue falling. However, to confirm that the recent market pain has passed, further improvements in technical signals such as breadth and volume are needed.

Currently, about 38% of stocks in the S&P 500 index are trading above their 200-day moving average. Ari Wald, a senior analyst at Oppenheimer, says that typically, this figure needs to drop below 20% before traders would consider the stock market to have capitulated.

Events occurring in the coming weeks—including the Federal Reserve’s interest rate decision on March 19, the “Triple Witching” on March 21 (when stock options, index futures, and index options all expire, which can increase volatility), and end-of-month portfolio rebalancing—will all be crucial in determining if bears will push the index lower.

John Kolovos, the chief technical strategist at Macro Risk Advisors, believes that whether the S&P 500 index can break through 5665 points (last July’s high) will be a turning point for the stock market to either settle into a sideways pattern or feel more pain.

“We’re gearing up for a substantial rebound, but the speed of the recent downturn may leave scar tissue,” says Kolovos.

Craig Johnson, chief market technician at Piper Sandler, thinks that if the S&P 500 index breaks through the 50-day moving average near 5975 points, bulls will regain control. This threshold is more than 7% above the close on Tuesday.

“Investor sentiment has become so extremely bearish that it’s actually bullish,” Johnson comments. “The current level of pessimism is crazier than during the global shutdown in the pandemic year of 2020. This is not a crisis.”

Observers hope to see movements supported by broad trading volume rather than only a few companies driving the major indexes higher. The Arms Index, also known as the Short-Term Trading Index (TRIN), compares the number of stocks advancing and declining to the volume of stocks rising and falling.

Todd Sohn, Director of ETF and technical strategy at Strategas Securities, says an Arms Index reading above 2.0 indicates that investors are selling stocks, while a reading below 0.5 suggests that there is increased demand for stocks. After Tuesday’s sharp decline, the index stood at 0.8, implying that another wave of selling could be on the horizon before the market is truly ready for a significant rebound.