Correction (Likely) Over and Rally Imminent!
- LaFoy O. Thomas III, Esq.
- Mar 22
- 4 min read
Thomas Third Capital
Investment Research Report: Stock Market Bottom and Imminent Rally
March 22, 2025
Summary and Investment Thesis
The stock market has likely bottomed in the short and medium term, and we at Thomas Third Capital believe a new rally is on the verge of confirmation within the next two to three trading sessions with an IBD-style follow-through day. Historically, no sustained rally has ever occurred without a follow-through day, which requires the market to rise at least 1.25% in higher volume than the prior session. With the Nasdaq experiencing a rally attempt on March 14, 2025, we are now entering the critical day four to day seven window, where a confirmed uptrend becomes highly probable.
While a follow-through day does not guarantee a prolonged bull market, it has been an indispensable component of every major stock market recovery. Given the latest macroeconomic developments and the market’s technical positioning, we believe buyers will come marching in for several compelling reasons.
Macro Tailwinds: The Fed Provides Additional Liquidity
On Wednesday, March 19, 2025, Federal Reserve Chair Jerome Powell and the Federal Open Market Committee (FOMC) announced a $20 billion per month reduction in the Fed’s quantitative tightening (QT) program. This move injects additional liquidity into the financial system, easing constraints on credit markets and reducing upward pressure on interest rates—both of which are bullish catalysts for stock valuations.
Further reinforcing our conviction, Powell’s commentary was notably supportive of the macroeconomic outlook, suggesting that the Fed is shifting toward a more accommodative stance. However, we believe the market has experienced a delayed reaction to these bullish signals, in part due to the energetic influence of the ongoing Mercury Retrograde (March 15 - April 7, 2025). Historically, Mercury Retrograde has been associated with communication breakdowns and misinterpretations, which could explain the initial muted response to the Fed’s policy shift. After some delay, we anticipate a more clear understanding of the Fed’s dovish pivot, further fueling risk-on sentiment.
Valuation: A Rare Buying Opportunity in Market Leaders
While the stock market correction has tested investor confidence, it has also created extraordinary buying opportunities in some of the world’s most dominant growth companies.
NVIDIA (NVDA): Currently trading at 26 times Wall Street’s fiscal 2025 EPS estimates, which we at Thomas Third Capital believe is significantly understated. Our models project at least 67% EPS growth to over $5.00 per share in fiscal 2026 (calendar year 2025), implying that NVDA is trading at just 23x forward earnings—a massive discount given its AI-driven growth trajectory.
Meta (META), Alphabet (GOOGL), Tesla (TSLA), and Coinbase (COIN) are all similarly undervalued relative to their long-term opportunities, making this one of the best risk-reward environments in recent memory.
Investors sitting on the sidelines, waiting for a dip, now have a rare second chance to enter the market at attractive levels before the next leg higher begins.
Technical Analysis: The Nasdaq’s Bullish Reversal
The Nasdaq Composite Index closed on Friday, March 21, 2025, at 17,784, accomplishing a bullish reversal. The index hit a low of 17,238 on March 11, 2025, a level that was successfully retested on March 13, 2025 at 17,239.
Key Technical Levels:
52-week high: 20,204 (December 16, 2024)
200-day moving average: 18,439
50-day moving average: 19,040
21-day moving average: 18,186
10-day moving average: 17,615
The Nasdaq has now cleared its 10-day moving average and is poised to reclaim its 21-day and 200-day moving averages in the coming weeks, reinforcing the likelihood of a sustainable rally. While it is true that “bad things happen below the 200-day moving average,” we firmly believe this correction is officially over, barring extraordinary developments. The market has laid the foundation for a powerful breakout, and we are confident that a follow-through day is imminent.
Conclusion: A New Bull Market Awaits
The stock market is on the cusp of a confirmed rally, supported by Fed liquidity injections, attractive valuations, and bullish technical signals. While investor sentiment remains cautious, the conditions for a strong recovery are now firmly in place. As the market gains clarity in the coming days, we expect institutional buyers to return aggressively, marking the beginning of the next sustained uptrend.
At Thomas Third Capital, we declare that the 2025 stock market correction is likely over—and the next great bull run is about to begin.
Recommendation: Do Your Own Research
Market Call: Correction Over. Rally Imminent.
Thomas Third Capital – Your Guide to Market Leadership
Disclaimer: I/We own shares of NVIDIA, Tesla, and Coinbase.
For financial literacy and the ability to find and analyze great investments, please read my books Generational Wealth: Beginner’s Business & Investing Guide and 1,000% Returns: Taking Advantage of the Stock Market’s Gross Incompetence. Both are amazing and are available on Amazon.com.
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