This certainly qualifies as Red Dawn event and I don't think the big one has hit yet. ‘Growth scare’ strikes U.S. stocks as estimated $5 trillion to $8 trillion of household wealth evaporates in five months Last Updated: May 20, 2022 at 4:34 p.m. ET Sounds like they believe fear hit yesterday. Keep your fingers on the trigger button next week. Amid a sea of red in U.S. stock markets for much of Friday, a fundamental shift in investors’ thinking appeared to be taking hold, one which analysts describe as a “growth scare.”
A “growth scare” is characterized by a correction in anticipation of slowing economic growth, even if such a slowdown hasn’t yet been borne out by the data. Though the DowJones Industrial Average DJIA, +0.03% eked out a slight gain into the closing bell on Friday, it still booked its longest streak of weekly losses in 90 years, while the S&P 500 SPX, +0.01% narrowly averted a bear-market finish. Meanwhile, investors flocked to Treasurys and the dollar as safe havens of choice.
Before the final minutes of trading, a broad-based selloff in equities punished every industry and every stock strategy —- from value and small-cap to growth, as well as the consumer-discretionary, energy, utilities, financial and tech sectors. Economists at JPMorgan Chase & Co. JPM, -0.82% estimate that U.S. household wealth has fallen by $5 trillion to $8 trillion in 2022, driven largely by falling equity prices. And BofA Securities strategists ranked U.S. equities as this year’s worst-performing asset class, as well as the third-biggest loser among global stocks ahead of only Chinese and German equities, based on data through Wednesday.
D
•By Mark Hurlburt: ~ The bear market for stocks isn’t over. In fact, it may have aways to go. That’s because — even with the S&P 500 16% below its all-time high, and both the Nasdaq Composite and the Russell 2000 Index into bear-market territory — many investors are more focused on when and where to invest in stocks than worried about the possibility of further, steep declines.
This bottom-fishing is more reminiscent of the “slope of hope” that bear markets typically descend than the “wall of worry” bull markets like to climb. That doesn’t mean the U.S. stock market couldn’t mount an impressive rally from current levels. If it does, it more likely would be a bear-market rally than the beginning of a new bull-market leg that takes the major market averages to new all-time highs.
A review of past bear markets suggests that, when the current bear market does hit bottom, few investors will even be contemplating that possibility. We either won’t even be paying attention, having grown so dejected as to have thrown in the towel, or will consider any sign of market strength as a bear market trap.
That’s not Wall Street’s current mood. Bear-market psychology follows a progression that is similar to what psychologists call the five stages of grief — denial, anger, bargaining, depression and acceptance. Here’s how they manifest in the stock market:
Denial — In this initial stage, the prevailing view is that stock-market weakness is nothing more than a buying opportunity. Far from getting angry (see next stage), investors remain quite sanguine, since the market’s pullback offers an opportunity to buy stocks more cheaply than would have been the case had the bull market kept going. Anger — Denial becomes increasingly difficult to sustain as the market’s pullback becomes too severe. Investors’ mood eventually morphs into anger, as they rail against the unfairness of the pullback. A hallmark of this stage is where investors see the pullback as a personal affront — as if the market cares whether you or I lose money. Bargaining — In this stage, investors’ redirect their energies to figuring out if they can maintain their lifestyles despite the hit to their portfolio; retirees rejigger their financial plans. Investors promise to give up that fancy new car or the European vacation — the fat from their budgets — so long as they don’t have to cut bone. Depression — As the market continues to slide, the realization sets in that cutting the fat isn’t going to be enough. Major changes in lifestyle will be required. Near-retirees work for longer than originally planned; retirees go back to work. Acceptance — In this final stage, investors throw in the towel. They surrender to the bear market and stop even fantasizing about when it might end. They treat any sign of market strength as a suckers’ rally, luring the gullible into losing more money on the next leg down. Where we are now in this cycle My impression is that we’re no further through this five-stage cycle than the second one. There are individual exceptions, of course, since not all investors progress at the same pace. But the preponderance of the attitudes I encounter are either that the pullback is a buying opportunity (stage one) or that the market’s weakness is profoundly unfair (stage two).
Investors’ progression through these stages must be genuine. As I noted last week, it’s not meaningful to say you’ve thrown in the towel, only to quickly jump on the bullish bandwagon at the first sign of market strength. Such a reaction is little more than stage-one behavior in disguise.
Which brings me to recent claims that we’re seeing signs of capitulation on Wall Street. If the capitulation were real, that would be evidence that we’re in stage five. But I’m skeptical: In a genuine capitulation, there is no eagerness to detect capitulation. Key hallmarks of genuine capitulation are apathy and indifference.
Not all declines go through all five stages, of course, just as not all corrections turn into major bear markets. So this discussion doesn’t mean the market still has a lot further to fall. But if the bulls want to claim the force of contrarian analysis to support their belief in a rally, there needs to be genuine capitulation. Otherwise, the bulls’ arguments are simply evidence that the market’s decline is in early innings. •Mark Hulbert is a regular contributor to MarketWatch.
7
Loading VIX calls pre-market for a 72 hour trade cycle. Holding 20% asset invstment in VIX long term. Today will be glorious. The monthly expiration of options tied to equities and exchange-traded funds is notorious for stirring up volatility, and the next event takes place on Friday. Traders will close old positions for an estimated $1.9 trillion of derivatives while rolling out new exposures, all with the S&P 500 on the brink of a bear market.
This time round, $460 billion of derivatives across single stocks is scheduled to expire, and $855 billion of S&P 500-linked contracts will run out, according to Goldman Sachs Group Inc. strategist Rocky Fishman.
A
Arbuorplace had to be in Amarillo by Morning , so I am drive lots of miles !!! Remarkably , my TSLA safety score went up 2 points , even though I am drive rather aggressively while streaming classic rock !!!
A recent survey by BofA Global Research showed fund managers now expect the Fed to step in at 3,529 on the S&P 500, compared with expectations of 3,700 in February. Such a drop would constitute a 26% decline from the S&P’s Jan. 3 closing high.
The index, which was recently at 3,840, is already down around 20% from that high this year on an intraday basis - putting it on track to confirm a bear market, according to some definitions. [.N]
"The Fed has bigger fish to fry and that's the inflation problem," said Phil Orlando, chief equity market strategist at Federated Hermes, who is increasing his cash levels. "The 'Fed put' is kaput until the central bank is confident that they're no longer behind the curve."
As a result, some investors are digging in for a long slog. BofA’s survey showed cash allocations at a two-decade high, while bets against technology stocks stand at their highest since 2006.
The Federal Reserve's determination to raise interest rates until it squashes the highest inflation in decades is darkening the outlook across Wall Street, as U.S. stocks stand on the cusp of a bear market and warnings of a recession grow louder. At
The Federal Reserve's determination to raise interest rates until it squashes the highest inflation in decades is darkening the outlook across Wall Street, as U.S. stocks stand on the cusp of a bear market and warnings of a recession grow louder. At
finance.yahoo.com
R
I watch Tesla full self driving demo videos about once a month or about the time a new version is uploaded. Early on FSD was cautious to the point that it seemed hesitant. Or it over reacted thus causing it to slow down when it was not necessary. Last demo I saw, FSD seemed very confident. When it came to an intersection it did not hesitate to make a correct decision and then executed probably faster than many humans. It seems that the days of overly hesitant FSD are over. It was also very safe. Obviously computers do not get distracted. However at $12k a pop I will be driving manually until I cannot. Or until they lower the price. There are a lot of things I can buy with $12k that I would rather have.
A
Lots of singles at the bar tonite , it’s still early though so thangs can change as you may know !!! Lots of eyes on Seat 3 !!!
Good morning everyone, I have stayed away from politics pretty much due to a self imposed discipline. This morning as I am getting ready to go do a little wax on wax off on the Green Dragon, I was thinking about how we have almost totally lost our moderate voice of reason and compromise in our country. Are we doomed to completely separate into two competing tribes with people like myself being forced to deal with one extreme or the other indefinitely? Or, is is still even possible for more reasonable voices/ideas to prevail at some point? We need more like Chief Justice John Robert’s in my opinion before it is too late. There are fewer and fewer who can even listen to the other sides argument and acknowledge their points of view. Extremism has been the killer of most democracies throughout history. PS-I know this will probably not stay up long as too many just can’t handle a reasonable moderate honest opinion anymore ✌️
A
Anyone sensing a Gap down on DOW and Gap up on VIX on Monday ??
m
Stay long SQQQ, smaller long position in SPXS, play takeover arbitrage by being long BKI and TWTR. I think/hope those work for a while.
K
SOFI was green yesterday and up 8% today.. finally a bottom there?
7
20K UVXY @ 15.19 Hate this ETF but for liquidity purposes on a Fri-Mon close it works. GL
R
Anyone know the last time the DOW was down 8 weeks in a row? It was 1932. Maybe this is why the press secretary said that "we don't pay attention to the stock market".
K
Arbuorplace is having a good time in Texas… Traveling around the state like a cowboy back in the day… He’s like a character in the old Marty Robbins “El Paso” tune..
R
It makes you wonder with all that has gone on lately why anyone would want to defend it but then I think of how family members will protect one of their own who has committed a murder and the context becomes clear. It is a love bond that surpasses reason that creates an emotional barrier that many cannot bear to face so they don't. They pretend that it is not happening. In a way it makes you feel sorry.
Monkeypox? Well no one can say they didn't at least broadcast their intentions ahead of time. You will lose 30% or more of your portfolio that is long folks. We are likely to get locked down again so load up on Whiskey and the like. FWIW they are adjusting mortality rates.Since it's inception monkey deaths were less than 1% magic and now they say 10%. GL
7
They are going to have a really hard time coming up with a reason to get longs moving. The "buy at the low" won't work as people are finally awake as to how dire things really are. Plenty of obvious undeniable reasons for bear traders and those will only increase. We should not need to wait long to see the awaited Red Dawn event. Buy more VIX plays on any dips. People are looking at historical's but there has never been a situation like this before. 2008 black monday was only 7%ish DJI drop and that was historical. We had 3.6 just yesterday. It doesn't matter what happens today or Friday. There is nothing that can stop the avalanche that is coming to this market. I called a 1000 pt drop yesterday premarket and 1000's as well. Did not expect it would happen so soon but doubled up VIX call 30+40 options on Tuesday. Nice 28% 1 day gain. If VIX drops below 30 I will add another 10%. This is game over. No one is buying their BS anymore. Level 2 is showing we may see a run at open...but day end will be as bad or worse than yesterday. Not often that investors get free money plays like this. Short market..Buy VIX instruments and make $$$$$$
m
If this is true time to play arbitrage on a 30% markdown: Yahoo Finance Video Twitter executives say deal with Elon Musk is not ‘on hold’ Thu, May 19, 2022, 5:02 PM
M
Welcome to the Bear Market Shuffle🙃 Shout out to Amy for another really nice play on RDBX in all of this. You go girl! I only wish I would have bought in when you recommended it 🙂✌️
Last Updated: May 20, 2022 at 4:34 p.m. ET Sounds like they believe fear hit yesterday. Keep your fingers on the trigger button next week. Amid a sea of red in U.S. stock markets for much of Friday, a fundamental shift in investors’ thinking appeared to be taking hold, one which analysts describe as a “growth scare.”
A “growth scare” is characterized by a correction in anticipation of slowing economic growth, even if such a slowdown hasn’t yet been borne out by the data. Though the DowJones Industrial Average DJIA, +0.03% eked out a slight gain into the closing bell on Friday, it still booked its longest streak of weekly losses in 90 years, while the S&P 500 SPX, +0.01% narrowly averted a bear-market finish. Meanwhile, investors flocked to Treasurys and the dollar as safe havens of choice.
Before the final minutes of trading, a broad-based selloff in equities punished every industry and every stock strategy —- from value and small-cap to growth, as well as the consumer-discretionary, energy, utilities, financial and tech sectors. Economists at JPMorgan Chase & Co. JPM, -0.82% estimate that U.S. household wealth has fallen by $5 trillion to $8 trillion in 2022, driven largely by falling equity prices. And BofA Securities strategists ranked U.S. equities as this year’s worst-performing asset class, as well as the third-biggest loser among global stocks ahead of only Chinese and German equities, based on data through Wednesday.
~ The bear market for stocks isn’t over. In fact, it may have aways to go. That’s because — even with the S&P 500 16% below its all-time high, and both the Nasdaq Composite and the Russell 2000 Index into bear-market territory — many investors are more focused on when and where to invest in stocks than worried about the possibility of further, steep declines.
This bottom-fishing is more reminiscent of the “slope of hope” that bear markets typically descend than the “wall of worry” bull markets like to climb. That doesn’t mean the U.S. stock market couldn’t mount an impressive rally from current levels. If it does, it more likely would be a bear-market rally than the beginning of a new bull-market leg that takes the major market averages to new all-time highs.
A review of past bear markets suggests that, when the current bear market does hit bottom, few investors will even be contemplating that possibility. We either won’t even be paying attention, having grown so dejected as to have thrown in the towel, or will consider any sign of market strength as a bear market trap.
That’s not Wall Street’s current mood. Bear-market psychology follows a progression that is similar to what psychologists call the five stages of grief — denial, anger, bargaining, depression and acceptance. Here’s how they manifest in the stock market:
Denial — In this initial stage, the prevailing view is that stock-market weakness is nothing more than a buying opportunity. Far from getting angry (see next stage), investors remain quite sanguine, since the market’s pullback offers an opportunity to buy stocks more cheaply than would have been the case had the bull market kept going.
Anger — Denial becomes increasingly difficult to sustain as the market’s pullback becomes too severe. Investors’ mood eventually morphs into anger, as they rail against the unfairness of the pullback. A hallmark of this stage is where investors see the pullback as a personal affront — as if the market cares whether you or I lose money.
Bargaining — In this stage, investors’ redirect their energies to figuring out if they can maintain their lifestyles despite the hit to their portfolio; retirees rejigger their financial plans. Investors promise to give up that fancy new car or the European vacation — the fat from their budgets — so long as they don’t have to cut bone.
Depression — As the market continues to slide, the realization sets in that cutting the fat isn’t going to be enough. Major changes in lifestyle will be required. Near-retirees work for longer than originally planned; retirees go back to work.
Acceptance — In this final stage, investors throw in the towel. They surrender to the bear market and stop even fantasizing about when it might end. They treat any sign of market strength as a suckers’ rally, luring the gullible into losing more money on the next leg down. Where we are now in this cycle
My impression is that we’re no further through this five-stage cycle than the second one. There are individual exceptions, of course, since not all investors progress at the same pace. But the preponderance of the attitudes I encounter are either that the pullback is a buying opportunity (stage one) or that the market’s weakness is profoundly unfair (stage two).
Investors’ progression through these stages must be genuine. As I noted last week, it’s not meaningful to say you’ve thrown in the towel, only to quickly jump on the bullish bandwagon at the first sign of market strength. Such a reaction is little more than stage-one behavior in disguise.
Which brings me to recent claims that we’re seeing signs of capitulation on Wall Street. If the capitulation were real, that would be evidence that we’re in stage five. But I’m skeptical: In a genuine capitulation, there is no eagerness to detect capitulation. Key hallmarks of genuine capitulation are apathy and indifference.
Not all declines go through all five stages, of course, just as not all corrections turn into major bear markets. So this discussion doesn’t mean the market still has a lot further to fall. But if the bulls want to claim the force of contrarian analysis to support their belief in a rally, there needs to be genuine capitulation. Otherwise, the bulls’ arguments are simply evidence that the market’s decline is in early innings.
•Mark Hulbert is a regular contributor to MarketWatch.
This time round, $460 billion of derivatives across single stocks is scheduled to expire, and $855 billion of S&P 500-linked contracts will run out, according to Goldman Sachs Group Inc. strategist Rocky Fishman.
https://photos.app.goo.gl/HGYjUWbZ5gTnPYMJ9
The index, which was recently at 3,840, is already down around 20% from that high this year on an intraday basis - putting it on track to confirm a bear market, according to some definitions. [.N]
"The Fed has bigger fish to fry and that's the inflation problem," said Phil Orlando, chief equity market strategist at Federated Hermes, who is increasing his cash levels. "The 'Fed put' is kaput until the central bank is confident that they're no longer behind the curve."
As a result, some investors are digging in for a long slog. BofA’s survey showed cash allocations at a two-decade high, while bets against technology stocks stand at their highest since 2006.
https://finance.yahoo.com/news/bear-market-looms-battered-wall-175441811.html
https://photos.app.goo.gl/yX34aZZe4BkZSTa16
PS-I know this will probably not stay up long as too many just can’t handle a reasonable moderate honest opinion anymore ✌️
Traveling around the state like a cowboy back in the day…
He’s like a character in the old Marty Robbins “El Paso” tune..
https://m.youtube.com/watch?v=FfBwsG8ubFw
Twitter executives say deal with Elon Musk is not ‘on hold’
Thu, May 19, 2022, 5:02 PM