The Stock Market Might Really Be in Trouble

I expected to see a reversal upward in stocks this morning. Instead, it was a bloodbath–a continuing bloodbath. This was the heat map as of about noon central time:

Everything got crushed except for Dollar General and T-Mobile, basically.

Now, stocks have begun ramping upward over the past half hour or so:

But the tech-heavy Nasdaq is still close to 20% off its all-time highs, and all the indexes are very oversold. The S&P was at the low point down over 10% from its all-time highs.

And who knows if this ramp will last or be viciously sold–like every other attempted rally over the past few weeks has been.

It’s not just US stocks getting crushed, either:

  • Germany is down 3.7%.
  • The Euro Stoxx 50 is down over 4%
  • France is down 4%
  • Britain is down 3%
  • The Russian market is down over 8%

Obviously a lot of this has to do with the escalating situation in Ukraine.

Brandon has apparently decided he’s going to send more US troops to the region and escalate:

And then we’ve got the rate hikes looming as well.

The Fed will meet tomorrow and provide some more clarity on its rate hike schedule this year.

With the markets in free fall, it makes it less likely the Fed will hike–at least aggressively, that is.

But inflation is still roaring, so it seems like the Fed is stuck between a rock and a hard place. If they hike, it probably accelerates the market crash and sends us hurtling toward a recession. If they don’t hike, inflation likely continues unabated and maybe even gets worse.

Personally, I bought the dip this morning. Some of these stocks were oversold to a laughable extent. Just ridiculously oversold.

I feel like an idiot for buying the dip, but after the past decade or so, I have become conditioned to buy the dip. I’m Pavlov’s dog. I see a dip, and I buy it. And I will continue buying dips until doing so doesn’t work anymore.

This current market selloff, however, does feel different from past selloffs. It feels like there’s real panic and fear gripping the markets right now, and I think there’s a good chance that when we do rally from these lows, the rally could be viciously sold off.

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