My read of the charts suggests that the down-trend has been slow and will likely end in a steep panic. Look at these monthly charts of the SPY and DIA. The markets have a long way to fall and selling volume needs to pick up for this decline to end. Investors have yet to give up. I hope I am wrong. I have been mainly in cash since November. As long as I get back in below the levels I got out, I will have come out ahead without suffering the anxiety of seeing my pension balances drop. I follow the market trend and nothing else. “Sell in May” is almost upon us.
Probably more downside before we see a rally, but most of this is due to the uncertainty surrounding the Ukraine. Keep in mind that everyone (including me) thought the market was going to go even lower back in March of 2020, which it did briefly, and then stay there, which it didn’t.
Will this decline end up the same way? Nobody knows, but I doubt we’ll see that kind of snapback. Still, it will end.
Studies have shown that the market can indeed go up during times of rising interest rates, but it’s certainly better if they’re falling. And similar to when the virus hit, the pall the war has cast will eventually dissipate as well, with fewer worldwide economic consequences than the virus caused(except maybe in Russia). For folks who are investors and not traders, bearish markets are good times to pick up some shares of quality companies for the long term. Unless of course you think the market at today’s level is as high as it will ever go, and it’s only going down from here,,, forever.
Nice comments, thank you.