The Bear Market is entering a new phase today as the S&P 500 finally drops more than 20% from its highs and cryptocurrencies undergo a crash. The business media is now recognizing what many individual market participants have known for over a year - this is a terrible market.
For a big portion of the market, the bear market started in February 2021. That is when SPACs, meme stocks, biotechnology, speculative small-caps, growth stocks, ARK names, cannabis, and a variety of secondary names topped out and began a long downtrend.
The second stage of the bear market started in November 2021 when the selloff in growth stocks accelerated, and the FATMAAN names began to crumble. Then in January 2022, the indexes started to top, but over the last three trading days, they have collapsed, and we finally see a full-blown bear market across all sectors and the senior indices.
We have some panic selling taking place today. There are currently 503 stocks in the S&P 500, and not a single one is trading in the green. Breadth is around 15 to 1 negative overall.
I have been talking about new lows quite a bit lately and continue to watch that closely. Currently, there are around 1800 new 12-month lows which are still far from the 3000 level we hit in mid-May. That is a positive non-confirmation at this point, but that number could accelerate quickly if there is another leg down.
This is about as negative as it gets, and there are currently no bids at all out there. I'm doing nothing as I wait for some support to eventually form.
This is some of the worst price action that I have ever seen, and what is making it much worse is that there is absolutely no confidence that either the Fed or the Biden Administration has some solutions for the economic negatives that continue to pile up.