Posted by Internet :) (99..201.63) on July 04, 2022 at 07:22:43:
"The 2nd quarter ended with a thud, and while we all know there were a lot of issues in the first half of the year, the action yesterday included some end of quarter window dressing, positioning for the 3rd quarter, and a pre-holiday impact, and the volatility could continue today. The Dow lost 254-points but it was really all over the place yesterday and that just happens to be where it landed when the bell rang. Bonds rallied as yields dropped, and commodities continue to slide as the economy braces for a recession.
Where were you in 1970? That was the last time that the S&P 500 started the first half of the year with a 20% plus loss. (The Nasdaq is down 30%) Ouch! The good news... 1970 ended the year flat.
Year year Open Year High Year Low Year Close Annual % Change
1970 93.00 93.46 69.29 92.15 +0.10%
The bad news, the economy and the stock market didn't really bottom until about 1974 and there were major swings in the stock market the whole time so it was a market timer's market, and / or a dollar cost averaging market.
We are about four weeks in front of the next FOMC meeting where most are expecting another 0.75% rate hike, but if they do say something to the effect that they don't need to be so aggressive because of prices coming down on their own, the the market could find a bottom? The jobs report next Friday could be a big one as the Fed wants to see the unemployment rate go up as a sign that their rate hikes are working.
My prediction was that the market would see new lows all the way into August / September, but don't bet on that. That's just based on historical precedents and seasonality.
In the short term we saw a relief rally fail this week but it was a pre-holiday week and the end of a quarter so it's tough to judge. Everything could flip back next week because once again we are seeing some extremes in the indicators, while some are still only neutral. It's a bear market and making long bets (bets on stocks) is more dangerous. I know I can't help myself wanting to buy when the world can't sell fast enough, but the timing is very tough and catching the lows takes a lot of luck, and buying too soon can be painful if you're wrong.
I had raised some cash (G-fund) over the last two weeks but planned to sell more on any rally this week, but guess what? No rally yet this week. The market can be cruel."