BFTR - Bear Market Update
- The tech-heavy Nasdaq had rallied 19% since June 16 and remained -21% since November.
- The widely-benchmarked S&P 500 was +10% from June and -13% from its January 3rd peak.
- Central banks are tightening, and the macro backdrop is deteriorating at an accelerating pace.
As of yesterday’s close, the economically sensitive small-cap Russell 2000 index had bounced 15% from June 12 and remained -22% from its October 21, 2021 high. The tech-heavy Nasdaq had rallied 19% since June 16 and remained -21% since November. Canada’s resource and bank-heavy TSX was +7% since July 14’s low and -11% from its March 30 peak.
With Nasdaq 100 net speculative long positions (CME futures and options) back to the year’s highs (Rosenberg Research), a lot of speculative short trades have covered, and the latest bounce is running out of buyers once more (as highlighted below from my partner Cory Venable).
The widely-benchmarked S&P 500 was +10% from June and -13% from its January 3rd peak. The bounce since June 16 achieved the 4155 level that Cory had defined as a potential failure area for this latest bear market rally (shown below).
Meanwhile, central banks are tightening, and the macro backdrop is deteriorating at an accelerating pace with negative momentum in home sales, housing starts, prices paid, corporate revenue, earnings, GDP, commodity demand, hours worked, job cuts and financial liquidity worldwide. Capital defence remains the dominant objective.
Disclosure: No positions.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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Bear Market Update