Weekly Report #13: Bear Market Deepens as SPY Drops 1.9% and Breadth Collapses to Near-Zero

Weekly Market Report — Week Ending 2026-03-28

Prepared by the Fillipio Chief Market Analysis Team | Distributed to Premium Subscribers Only

Market Regime & Conditions

There is no ambiguity in this week's regime reading: the market is firmly, persistently, and deepeningly bearish. Fillipio's regime model maintained a BEAR classification every single session this week, with confidence levels that not only held but actually accelerated to the downside. Monday opened at a confidence reading of 0.8227 (82.3%) — already a strong conviction bear signal — and by Friday that reading had climbed further to 0.85 (85.0%). When our model's confidence moves in the direction of the prevailing regime mid-week, it is a meaningful warning that conditions are not stabilizing; they are deteriorating.

SPY opened the week at $657.40 on Monday, March 23, and closed Friday, March 27 at $645.09 — a weekly decline of $12.31, or approximately -1.87%. The intraweek price action was choppy but ultimately resolved lower. Tuesday saw the week's worst session, with SPY touching $653.38, before a modest two-day stabilization on Wednesday and Thursday at $656.82 — which was telling in its own right, as the market couldn't even recover Monday's losses on what was effectively a flat two-day grind. Then Friday delivered the killing blow: SPY collapsed to $645.09, the lowest close of the week, confirming that the brief mid-week consolidation was distribution, not accumulation.

The RSI picture is particularly alarming. SPY's 14-day RSI began the week at 37.52 — already in oversold-approaching territory — dropped to 32.81 on Tuesday, recovered slightly to 39.14 mid-week, then cratered to 28.81 by Friday's close. An RSI reading below 30 on the S&P 500 proxy is a rare and significant event, signaling extreme selling pressure. While deeply oversold conditions can historically precede short-term bounces, in a confirmed bear regime with rising confidence, oversold can always become more oversold before meaningful relief arrives.

Volatility, as measured by our 20-day realized volatility metric, moved in a range of 13.0% to 14.07% across the week. While not at panic levels historically, a 14% annualized volatility reading in a sub-30 RSI environment on an index ETF signals that sellers are in control with consistency — this is not random noise. Friday's uptick back to 14.0% after a brief mid-week compression to 13.0% suggests volatility is re-expanding, which is typically unfavorable for long positions.

Perhaps the single most alarming data point this week was market breadth. On Monday, breadth registered a paltry 0.0355 (3.55%) — meaning fewer than 4 in 100 stocks in our universe were advancing on a net basis. By Tuesday, breadth had collapsed entirely to 0.0 (0.0%) — a complete wipeout with essentially zero net advancers. Wednesday and Thursday showed fractional recovery to 1.11% and 0.70% respectively, and Friday remained near the floor at 0.80%. Breadth readings this close to zero for an extended period are characteristic of waterfall declines and broad institutional selling. There is nowhere to hide in the index — the damage is widespread.

Signal Landscape

The end-of-week signal distribution from Fillipio's scoring engine tells a stark but honest story about overall market health. Across our entire coverage universe of approximately 3,864 stocks, the breakdown is as follows:

• HOLD: 2,665 stocks (68.9% of universe) — Average composite score: 50.5
• SELL: 1,154 stocks (29.9%) — Average composite score: 34.7
• BUY: 30 stocks (0.78%) — Average composite score: 66.7
• STRONG SELL: 15 stocks (0.39%) — Average composite score: 23.7

Let that sink in: out of nearly 3,864 stocks in our scoring universe, only 30 stocks — less than 0.8% — are generating BUY signals this week. That is an extraordinarily narrow opportunity set. Meanwhile, over 1,169 stocks (combining SELL and STRONG SELL) are flashing exit signals, representing roughly 30.3% of the universe. The average composite score for STRONG SELL names sits at a deeply distressed 23.7 out of 100, indicating fundamental and technical deterioration across a significant swath of the market.

The 30 BUY-rated stocks carry an average composite score of 66.7 — respectable in isolation, but the extremely small count tells us that even within the bear market, truly high-conviction long setups are scarce. This validates our strategy of running a highly selective, concentrated watchlist rather than deploying capital broadly. The concentration of BUY signals in defensive and income-oriented sectors (Real Estate, Utilities, select Financial Services) confirms that the market's alpha is hiding in yield and stability, not growth.

The HOLD cohort's average score of 50.5 reflects neutrality — these stocks are not breaking down aggressively but they are not generating upside momentum either. In a bear regime with breadth near zero, HOLD effectively means "waiting to be sold." Investors still holding broad market exposure should be reviewing their positions carefully against this signal distribution.

Pick Performance

Closed Picks This Week

We closed one position this week with a strong result:

• NXT (Nextracker) — Entered at $114.39, exited at $125.83 (Target 1 hit). Realized gain: +10.0% in just 6 days held. Alpha generated versus SPY over the same period: +8.73%. This is a textbook outcome — entering a high-conviction setup, riding it to the first target with discipline, and banking gains before the broader market deterioration could erode the position. NXT was subsequently sold from the Momentum strategy portfolio at $119.64 via stop-loss on March 27, which was a portfolio-level execution event separate from the pick's Target 1 close.

A 10% gain in 6 days in a bear market, generating 873 basis points of alpha, is exactly the kind of outcome our model is designed to produce: finding the rare stocks capable of moving independently of the broader tape.

Active Picks — Current Portfolio of Open Positions

We currently carry 20 active picks across various entry dates. Breaking these down by performance:

Green Positions (Unrealized Gains):

• PRSU — Entry $34.02, current $35.34, +3.88% in 3 days. ML Score: 91.13. Stop: $32.32, Target 1: $37.42. Strong early momentum — our highest ML score pick of the week.
• CPRX (Healthcare) — Entry $22.79, current $23.40, +2.68% in 5 days. Stop: $21.65, Target 1: $25.07. Steady, quiet outperformer in a rough tape.
• ALNY (Healthcare) — Entry $312.17, current $317.36, +1.66% in 5 days. Stop: $296.56, Target 1: $343.39. Biopharmaceutical names showing relative strength vs. broad Healthcare sector weakness.
• USFD — Entry $89.40, current $90.86, +1.63% in 5 days. Stop: $84.93, Target 1: $98.34. Solid defensive food distribution play holding ground.
• NJR — Entry $54.12, current $54.59, +0.87% in 2 days. Stop: $51.41, Target 1: $59.53. New entry performing as expected early.
• SOBO (Energy) — Entry $34.10, current $34.21, +0.32% in 1 day. Stop: $32.40, Target 1: $37.51.
• HESM (Energy) — Entry $39.75, current $39.79, +0.10% in 2 days. Stop: $37.76, Target 1: $43.73.
• KAR — Entry $26.74, current $26.75, +0.04% in 3 days. Stop: $25.40, Target 1: $29.41. ML Score of 90.85 — high conviction, needs time to develop.

Flat Positions:

• CHD (Consumer Defensive) — Entry $94.69, current $94.69, 0.00% in 5 days. Stop: $89.96, Target 1: $104.16. Holding steady — exactly the kind of defensive name that preserves capital in down markets.
• KORE (Communication Services) — Entry $8.99, current $8.99, 0.00% — freshly opened, day 0.

Red Positions (Unrealized Losses):

• VIRT (Financial Services) — Entry $42.67, current $42.52, -0.35%. Day 0. Stop: $40.54.
• POWI (Technology) — Entry $49.685, current $49.50, -0.37%. Day 0. Stop: $47.20.
• UDR (Real Estate) — Entry $33.71, current $33.58, -0.39%. Day 0. Stop: $32.02.
• KNSA — Entry $46.08, current $45.75, -0.72% in 5 days. Stop: $43.78, Target 1: $50.69.
• WSR (Real Estate) — Entry $16.12, current $15.99, -0.81%. Day 0. Stop: $15.31.
• MPLX — Entry $58.89, current $58.13, -1.29% in 2 days. Stop: $55.95, Target 1: $64.78.
• ECPG (Financial Services) — Entry $70.285, current $68.87, -2.01% in 1 day. Stop: $66.77, Target 1: $77.31. Notable early pressure — worth monitoring closely.
• CINF (Financial Services) — Entry $158.43, current $153.68, -3.00% in 5 days. Stop: $150.51, Target 1: $174.27. Approaching stop territory. Cincinnati Financial under meaningful pressure.
• YY — Entry $58.76, current $56.42, -3.98% in 3 days. Stop: $55.82, Target 1: $64.64. Concerning deterioration — within $0.60 of stop level.
• BIP (Utilities) — Entry $36.47, current $34.86, -4.41% in 5 days. Stop: $34.65, Target 1: $40.12. Critical alert: BIP is trading just $0.21 above its stop-loss level of $34.65. This position is at extreme risk of being stopped out early next week.

All-Time Track Record

With our platform still in early operation, our all-time statistics reflect a nascent but promising track record:

• Total Picks Issued: 21
• Closed Picks: 1 (NXT — WIN)
• Win Rate: 100% (1 for 1 closed)
• Average Return (Closed): +10.0%
• Alpha Generated: +8.73%
• Profit Factor: 999.0 (maximum, no losing closed trades)

We are transparent that this track record is too small to be statistically conclusive, but the quality of the single closed trade — 10% in 6 days with 873bps of alpha — in a confirmed bear market is highly encouraging. The real test will be how open positions resolve over coming weeks.

Sector Rotation

This week's sector data reveals one of the most bifurcated sector landscapes we've seen, with some genuinely surprising outperformers hiding beneath a broadly negative headline:

Top Performing Sectors (5-Day Return):

• Industrials: +15.67% — The standout performer of the week by a massive margin. However, this is accompanied by zero BUY signals and 171 SELL signals out of 703 stocks. This divergence — strong recent return but heavy sell signal concentration — suggests this may be a bounce within a downtrend or sector-specific one-off events rather than sustainable leadership. We urge caution before chasing Industrials here.
• Energy: +4.47% — Energy delivered solid gains with 261 stocks averaging a 4.47% 5-day return. Like Industrials, however, Energy carries zero BUY signals and 42 SELL signals. Our model has selectively entered SOBO ($34.10) and HESM ($39.75) in the energy midstream space where individual stock characteristics justify the risk despite sector-level signal caution.
• Basic Materials: +4.19% — Similar story to Energy. Solid recent returns but zero BUY signals and 86 SELL signals. Not actionable on the long side from a Fillipio signal perspective.
• Communication Services: +1.91% — Modest gains, 2 BUY signals out of 230 stocks. KORE is our new entry here.

Weakest Sectors:

• Technology: -2.69% — The most broadly negative sector in terms of signal quality. Average score of just 43.0, 238 SELL signals, only 3 BUY signals out of 649 stocks. Technology remains the epicenter of bear market selling and should largely be avoided for new long exposure.
• Healthcare: -1.67% — Despite holding two active green positions (CPRX, ALNY), Healthcare as a sector is deeply troubled. With an average score of just 38.5 — the lowest of any sector — and a staggering 545 SELL signals out of 839 stocks, the sector-wide picture is one of broad deterioration. Our individual Healthcare picks are outperforming their sector significantly.
• Real Estate: -1.33% — Interestingly, Real Estate leads all sectors in BUY signal count with 10 BUY signals and the highest average score at 53.8, despite negative 5-day returns. This represents a potential early-cycle opportunity for patient investors — the model is detecting quality setups even as price remains under pressure.

Sector Rotation Thesis for Next Week: Real Estate is the most interesting sector on a forward-looking basis — highest average score, most BUY signals, and yield characteristics that attract capital in volatile markets. Financial Services and Utilities offer selective opportunities. Avoid Technology and Healthcare on the long side absent very specific individual catalysts.

Strategy Portfolios

Fillipio runs three distinct strategy portfolios, each with different mandates. Here is the current state of each:

Momentum Breakout Strategy

• Current Value: $100,225.96 | Cash: $100,225.96 | Open Positions: 0
• This week's key event was the SELL of NXT on March 27 at $119.64 (43 shares) following a stop-loss trigger. The pick itself had hit Target 1 at $125.83, but at the portfolio execution level, the position was exited at a stop. This reflects the difference between pick-level targets (which triggered the +10% realized gain) and portfolio-level stop management. The Momentum portfolio is now entirely in cash, which is actually a prudent posture given the bear regime. With breadth below 1%, sitting in cash in the Momentum strategy is not weakness — it is discipline.

Quality Growth Strategy

• Current Value: $99,831.92 | Cash: $92,064.32 | Open Positions: 2
• Quality Growth executed two trades this week: BUY AL (Air Lease Corp) on March 25 — 32 shares at $64.74, composite score 65.61; and BUY ECPG on March 27 — 83 shares at $70.58, composite score 66.77. ECPG is showing early pressure at -2.01% unrealized, and AL has not yet appeared in the active picks feed, suggesting it may be in a monitoring phase. The portfolio is slightly underwater overall at -$168.08 from starting capital, a modest and manageable drawdown.

Value Hunter Strategy

• Current Value: $99,989.60 | Cash: $98,719.11 | Open Positions: 1
• Value Hunter bought ACAQQ on March 25 — 13 shares at $98.53, composite score 66.41. This is effectively a near-breakeven portfolio (-$10.40 from starting capital) with very light deployment. The conservative cash posture in a bear regime is entirely appropriate for a value-oriented strategy — value picks require patience, and forcing deployment in a market with breadth near zero would be imprudent.

Watchlist — Stocks to Watch Next Week

Top BUY Signals Entering the Week

• VRE (Veris Residential) — Composite Score: 74.8, ML Score: 89.84, Sector: Real Estate, Price: $18.94. The top-ranked BUY signal in our entire universe this week. Residential REIT with strong ML conviction near 90. In a bear market, high-quality REITs with yield support can act as defensive anchors. Highest composite score of any BUY-rated stock. Worth serious consideration if risk parameters align.
• PKST (Peakstone Realty Trust) — Composite Score: 73.03, ML Score: 88.03, Sector: Real Estate, Price: $20.87. Second-highest ranked BUY signal. Office/Industrial REIT with near-90 ML conviction. Real Estate is showing the most BUY signal concentration of any sector, and PKST is near the top of that list.
• PRA (ProAssurance) — Composite Score: 68.39, ML Score: 78.43, Sector: Financial Services, Price: $24.64. Specialty insurance name with solid scores in a sector that's generating selective BUY signals. Insurance businesses often benefit from rising rate environments and can be defensive in nature.
• UDR (United Dominion Realty Trust) — Composite Score: 67.41, ML Score: 88.76, Sector: Real Estate, Price: $33.71. Already in our active picks list, this residential REIT carries an ML score of 88.76 — the second-highest ML reading among our new picks this week. Currently showing a modest -0.39% unrealized loss on day 0.
• KAR — Composite Score: 66.13, ML Score: 90.85, Sector: TBD, Price: $26.74. Despite the ML score of 90.85 — among the highest in our pick universe — KAR has barely moved since entry (+0.04%). This is a "coiling spring" setup. High ML conviction names that don't immediately sell off in a bear market often resolve sharply higher. Watch for a move through $27.50 as a potential acceleration signal.
• VZ (Verizon Communications) — Composite Score: 67.01, ML Score: 76.56, Sector: Communication Services, Price: $50.64. Not yet in our active picks. A large-cap, dividend-paying telecom with a solid composite score. In a bear market with near-zero breadth, yield and stability matter — VZ fits that profile. Worth monitoring for a formal pick entry.
• KW (Kennedy-Wilson Holdings) — Composite Score: 66.97, ML Score: 78.80, Sector: Real Estate, Price: $10.94. Real Estate continues to dominate the BUY signal list. KW rounds out a compelling REIT/Real Estate cluster at the top of our rankings.

Stop-Loss Alert — Positions at Risk Next Week

• BIP (Brookfield Infrastructure Partners) — Current: $34.86, Stop: $34.65. Distance to stop: just $0.21 or 0.60%. This is the highest stop-out risk in the portfolio. Any additional selling pressure Monday morning could trigger this stop. Unrealized loss: -4.41%. Subscribers should be prepared for a potential stop-loss exit notification early next week.
• YY — Current: $56.42, Stop: $55.82. Distance to stop: $0.60 or 1.06%. Down -3.98% from entry in just 3 days, YY is approaching its stop with momentum to the downside. ML Score of 87.17 provided conviction at entry, but price action has not cooperated. Stop discipline will be maintained.
• CINF (Cincinnati Financial) — Current: $153.68, Stop: $150.51. Distance to stop: $3.17 or 2.06%. Down -3.00% in 5 days with the broader Financial Services sector showing stress. A continuation of Friday's selling pressure could bring CINF to stop territory within one to two sessions.

Outlook

The setup heading into the week of March 30 is, frankly, challenging. Our bear regime confidence has increased over the course of this week — moving from 82.3% to 85.0% — which means our model is not detecting any early-cycle improvement signals. The three conditions we would need to see for a regime upgrade to begin are: (1) SPY RSI recovering above 40 and holding, (2) market breadth sustaining above 10% for multiple consecutive sessions, and (3) regime confidence beginning to decline from its current 85% reading. None of these conditions are currently in place.

SPY ending at $645.09 with an RSI of 28.81 is deeply oversold — and we want to be intellectually honest that an oversold bounce is entirely possible, perhaps even probable on a 1-3 day basis. Bear markets produce violent short-covering rallies that feel like recoveries but are not. Our strategy in such an environment is not to chase bounces but to hold our high-conviction individual picks that are demonstrating price independence from the broader tape, while allowing our stop-loss system to protect capital on positions that break down.

The signal landscape — 30 BUY signals out of 3,864 stocks, less than 0.8% of the universe — tells us this is not a market to be deploying capital aggressively on the long side. Our Momentum strategy sitting entirely in cash is wise. Our Quality Growth and Value Hunter strategies maintaining heavy cash balances reflects appropriate risk management.

The sector rotation story provides some hope. Real Estate's relative strength in BUY signal concentration, combined with Utilities holding positive 5-day returns, suggests that yield-sensitive defensive sectors are absorbing capital flows from growth and technology. This is classic late-cycle/bear-market behavior. Subscribers should be thinking defensively: income, stability, and low-correlation assets are the priority.

Key events to monitor next week: any macro data that could further pressure or relieve the rate environment (which directly impacts Real Estate and Utilities), energy market developments that could affect our SOBO and HESM positions, and whether BIP and YY trigger their stops, which would provide important information about our model's selection quality in bear conditions.

Our base case: the bear regime continues through at least the first half of next week, with the possibility of a short-covering bounce that should be treated with skepticism. We are watching for regime confidence to begin declining from 85% as the first signal that conditions may be improving. Until that happens, capital preservation is the primary objective, with selective alpha generation in our highest-conviction individual names as the secondary goal.

Our one closed pick — NXT at +10% in 6 days with 873bps of alpha — is exactly the kind of outcome we seek to replicate: stocks that move on their own logic, independent of the tape. VRE, PKST, KAR, and PRSU are the names we believe have the best probability of doing the same next week.

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Disclaimer: This report is produced by Fillipio's AI-powered market analysis platform and is intended for informational and educational purposes only. Nothing contained in this report constitutes financial advice, investment advice, trading advice, or any other type of advice. All stock picks, scores, signals, and portfolio data presented are generated by algorithmic models and do not account for your individual financial situation, risk tolerance, investment objectives, or tax circumstances. Past performance of any picks, strategies, or portfolios described herein is not indicative of future results. Investing in securities involves substantial risk, including the possible loss of principal. All referenced prices, returns, and statistics are based on model-generated data and may differ from actual market conditions. Fillipio and its affiliates are not registered investment advisors. Always consult a qualified financial professional before making any investment decisions. Do not trade based solely on the information in this report.