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Behold The Nasdaq Bear
Buckle up. 2022 is kicking off a vicious bear market
On January 3, the DJIA peaked at 36,934. As of today, it has lost over 4000 points to arrive at 32,883. The NASDAQs high occurred on November 18, 2021 at 16,121; it now stands at 12,197, for a total loss of 3,924, or 24.3%.
Is anyone pointing out that the NASDAQ is in a bear market? No. Why? Because the FEDS and financial institutions don’t want that realization to take hold. Why? Because the DJIA could quickly lose another 4,000 points to catch up, which would lead to further carnage all around.
This is why I wrote on February 22, 2022…
This is shaping up to look like the bear market of 1973-1974, in which US stock indexes lost 45% of value in 24 months. The UK lost 73%! Given the excesses of the recent markets, there is no reason to think this one could not lose a lot more than 45%. Let’s hope not. Time to buckle up.
Interest rates are shooting higher while the FED jumped its rate by 0.50%. This is already chilling the housing and credit markets. Inflation is one aspect of this, but consider that households already pinched on rising food costs are going to be slammed with much higher rates on their credit card debt. Public sentiment is on the verge of a huge wake up call, and it could lead to more bankruptcies and foreclosures than we saw during the 2008-2010 period.
Given the extreme volatility that we have seen during the first 5 months of 2022, it may be that a comparison to 1973-74 is premature. In other words, we may have to look back to the period 1929-1933 for better historical guidance.
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