As we all know, the market has been red 5 days, 7 days if including the past weekend. The SPY has pulled back to the 585 range, a 5% pullback which is common however the 5/7 day loosing streak with the tech sector and popular stocks falling from anywhere from 15% to 40% which is where the real pain, is uncommon. The economy has been weakening for some time now and people haven't thought because of the official released manipulated data showing a "resilient" economy which i find absolutely hilarious as things have only been getting worse under the hood since covid. I have been calling for a recession since August of 2024 because of the underlying economy and since then, signs from the market as well. First was a big pullback in tech in July 2024, then it was the August 5th crash, then the decelerating market in the following months with high levels of volatility. The SPY was range bound for nearly 5 months which is very unusual(October peak to February bottom- 585). Not only this but there is a mountain of data and indicators that supports that the market is wildly overbought and should be very near to a recession, however i understand the market is irrational and can keep pumping years past its expiration date but the data should be taken into account when analyzing the market. When data on the economy is good, that takes away concern for recession and that usually happens in the recovery after one where chances of a soon after repeat recession is slim to none, so yes we should take flashing red lights on economic data seriously. In recent monthly the mainstream data on consumer demand from the government and from Walmart as well as the mass chaos Trump is causing combined with the decelerating market and the break of the yearly to 3 year trends on popular stocks is all in support of a recession not to forget the historical cycles of nations and societies which too has entered into the end of most cycle models for such things such as Strauss–Howe and Polybius' models. One can also just look at society and the younger generations and tell that things are horribly wrong and doomed for ruin. The good news is it is not eternal but part of a cycle. Once the cycle is over, we begin at the start of a new one of prosperity like post WW2. Aside from ranting to inform you of the real many factors that all point toward chaos, i would like to say that we should not try to trade based on predictions but on data and proven knowledge. The technical breaking of long term trends, a weak economy, super expensive stocks, a sideways decelerating market are all factors to take into trading which i believe it is finally time to become bearish heading forward and exiting a bullish trading or investing strategy to begin a bearish and safer strategy. My plan is to possibly trade the VIX and SVIX to profit from volatility and the cooling of spikes in volatility or perhaps to invest in long term treasury stocks like TLT or EDV which have much potential and go up in a bear market as well as have a dividend being very well positioned going forward. Trade and Invest whatever works for you but please have serious caution and expect a bear market. I have been predicting this 6 months now but have not declared publicly that the bear market is now in affect. Best of luck, do your research, plan carefully and remember, I could be wrong but probability and data is in favor and we trade based on probability and data not wishes and gambling. Leave a comment for any blog recommendations or criticism.
top of page

STOCK MARKET CHAT
bottom of page
Comments