The three major averages just came off their best month since 2020, but there's been so much pain in the market this year that many people are hesitant to believe the worst is behind them. Investors have been debating for weeks whether up moves in the market are the result of a temporary bounce or a more lasting bottom. BTIG says the bear case could be tested soon. "Since 1950 there has never been a bear market rally that exceeded the 50% retracement and then gone on to make new cycle lows," Jonathan Krinsky, a technical analyst at BTIG, said in a note late Thursday. "Therefore, if the S & P 500 were to exceed 4,231, we would have to assume that June was the low for this cycle." On Thursday, the S & P 500 ended the day at 4,151, nearing both its June high of 4,177 and a meaningful resistance level at 4,200. "A close over 4,231 would not mean we instantly flip bullish and buy everything as there are still many negative divergences and overbought conditions," Krinsky added. "Rather, it would be recognition that the worst is likely behind us, and [we'd] be more open to embracing the long side." The broad market index gained 9% in July and, as of Thursday's close, was on pace to finish the first week of August slightly higher. Krinsky also said that despite the rally in the Nasdaq, he sees potential negative divergences from bonds, credit spreads and bitcoin. The Nasdaq rose 12% in July and was up 2.6% so far this week, through Tuesday, at one point touching the highest point since May.