To put this pull back in perspective, we didnt even fully give up all the gains from October. Thats only 3 months of gains and thats one big reason I think we have much further to go. Sure, we will get some rallies that make everyone think the tide has turned but they will be suckers rallies and only very smart and very few traders will profit while the majority will lose their shirts. How about a pull back to the highs just BEFORE the pandemic as a point of reference? Stock go up to extreme levels and stocks drop to extreme levels.
It's really the FANG-ey type stocks that are holding this market up. If you look into the small cap space, there are tons of companies that are already down -50% or more from their all-time highs. If anything, I would guess some of these small names are well oversold and due for a bounce...I'd be very nervous about holding the oligopoly tech stocks though, as they really haven't even bled yet.
Tech stocks are way down but yes, I expect pain all year, with fake rallies to further bleed retail out of the market. And the recovery could be tepid for another year or so, until inflation is no more. Of course we could have war with Russia over Ukraine and/or war with China over Taiwan, in which case we'll be in the dumpster until it/they end.
This is assuming all the gains from before the pandemic until now are all bubbles. That's not really true. We did create some value. The economy did not completely shut down. People still worked, some even worked onsite. People still produced things. The gains might not be as big as what we have experienced, yes so we will have some pullback but it wouldn't be all the back to the level just before the pandemic.
Over a 40-year time period, all stock market crashes are just pull-backs. Over periods of 39 years or less, be long when the market is in an uptrend, be in cash when its not. Exit any share whose price pulls back 10%.
You are in for a rough year expecting all this to happen in a strong economy with growing corporate earnings. Maybe ask yourself why there are supply chain issues, and what happens when they are solved.
We just seem to see the same kind of traders make the same kind of mistakes on a perpetual loop for many years. They get just another excitement on any correction to keep them on their misguided mission for many years. How many accounts literally ended between 2012-2017 out of sheer embarrassment of their absurd claims on here ? If markets turn I'll pivot. The myth on here is bullish traders on the up trends can't do so they'll eat all downside. This hasn't been the case for me I've made money on every correction since 2009 simply by timing my exits/entries to miss a portion of the down side. Took me quite a few years to develop these kind of instincts wish I had them in the 1990s ( career and kids were a distraction from focusing on that though at the time ).
Supply chain issues are manufactured by the shipping lines that lost tons of money in the first year of covid and are now getting compensated by holding backs ships, with a wink from the US government because shipping lines are national security and no one wants them to go out of business. I can also tell you for a fact that truckers are hard to come by because those failing drug tests are entered in a national database and can't be hired. Trucking companies simply can't find drivers who aren't dopped up. In fact, supply chain companies which all have stringent drug testing and firing policies simply cannot find labor because so many fail dope tests. Welcome to the land of bright and brighter. Supply chain issues will miraculously disappear when shipping lines have recouped their losses.
I don't really see this as a booming economy, as much as it is a massively over simulated economy by the Fed. I expect earnings will collapse as fed stimulus and inflation effects and labor costs take a big chunk. The economy looked like a boom because of the huge stimulus given by most first world governments sloshing around most every industry. VicBee addressed the supply chain issues the way that I also see them.