Note how my modified GMMA charts clearly show the change in trend. How comfortable it is to invest in stocks and markets in daily RWB up-trends. Both AAPL and QQQ are in daily BWR down-trends.
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After huge decline market does not snap back–boomers to be haunted by 2020 debacle
A huge multi-month steep decline breaks investors’ euphoria and bullish psychology. For prices to rise and stay up people must be optimistic enough about the future to buy and hold stocks. It takes years of a rising market to bring most people back in. It took 2 years after the 2008 decline (see weekly chart) for the market to recoup its losses and even then people doubted the recovery for years. It took 26 years after the 1929-33 decline. Note the retest of the bottom in 2009 before QQQ finally moved up. The boomers, who hold most of the wealth, will stay away from the market for years as they remain haunted by the debacle of 2020.
$SPY monthly chart suggests this decline is just getting started; 16th day of $QQQ short term down-trend
When I put this decline in context, it seems quite small thus far. Check out this monthly chart of the SPY. Compare the current decline to that in 2008. Note we have not had similar huge volume declines. I suspect a bottom will occur only after we have had a huge selling climax.
