Apple has been displaced as the most valuable company in the world. It is now Saudi Arabia’s Aramco.
What a difference a few months make. Here is the box score on major index declines since their November through January highs.
DJIA down 14.8% SPX down 18.75% NASD down 32%
The tech heavy NASD led the way up soaring to 16,750 (all numbers rounded by eyeballing the charts). The decline erases the entire advance from November 2020 to the high a year later. A one-third loss in six months is certainly heralding the bear market we have been discussing.
There are precedents for what is happening. From the NASD high of 5,000 in March 2000, he index fell to 3,000 in just three months. It rebounded 61% of the fall to 4,250, and then spent over two years sinking to 1,250. That erased 75% of the high. The 1929 experience was similar. A big drop occurred from the October high of 390 based on the DJIA to 198..60 by November 13, 1929. A rebound carried to 294.07 by April 17, 1930. It then began a slow collapse into July 8, 1932 at a mere 41.22.
The decline in the Industrials took out the February low this year. That suggests we have seen the final highs in most indexes. A rebound as in 2000 and 1930 should take us into the Fall of 2022.
The markets are quite oversold. The percent of NASD stocks over their 50 day moving averages has plunged to 7.9%. So 92% are below that measure. The same is true now, I count ten columns of new lows. This week there were 27 new highs and over 2,700 new lows, that is a factor of 100x to 1, wow.
Bear markets wipe out the excesses of the previous bull market. That is starting in the murky crypto currency markets. Losses run to the billions yet El Salvador continues to cling to Bitcoin as its legal tender.
Speaking of which, we now learn the US Government is distributing drug gear including crack pipes. $18 million worth of Meth was just seized at the border. The Administration reaction is to lift Article 42 which will increase border crossings.
The latest response to record high in all things energy is to halt offshore lease sales in Alaska, drawing criticism from that industry.
Bull markets float higher on positive mood. Negative mood is on the rise. For the first time in US History, the Supreme Court is surrounded by a fence. Shoplifting is apparently legal in California. Monstrous is the latest horror movie release. The Ukraine War began at the lowest point of the Russian stock market since 2008.
Use the upcoming rally to lighten up your holdings, it may be the last opportunity for some time.
