Happy 1-Year Anniversary Bear Market

JC Parets
February 24, 2022

This month marks the one year anniversary of the top in stocks.

And more specifically, I mean the top in the internals of the U.S. Stock Market. Remember, that's the best things were, and it's been a painful deterioration ever since, particularly for most U.S. Index Fund investors, growth investors and most individual U.S. stock pickers.

The new highs list these days is loaded up with ADRs, Metals stocks, Staples and Energy. Most of the other stocks have been struggling. Not all of them are down, but many are sideways at best.

This chart really tells the story of what's been going on. We discussed it on Tuesday night's call:

This is the High Beta / Low Vol ratio, Aussie / Yen and Copper / Gold all measures of risk appetite, or risk aversion in many cases. Currently, they're just sideways messes.

Hot mess has been a great way to describe the stock market for quite some time now, about a year as it turns out. See: Hot Mess, A Definition

A year ago is when the new highs list peaked, biotech peaked, all things Cathie Wood peaked, the IPO Index peaked, the Nasdaq Advance-Decline line peaked, Chinese Internet, I can go on and on.

But more importantly, one name bucking the trend, that looks to be resolving higher from this mess, is Wesdome Gold Mines. I like the big base, and I really like the relative strength compared to all those miserable looking gold charts.

The risk vs reward is very well-defined too. I like that.

Also, this continues to look like the trade of a generation.

They say that you shouldn't kick someone when they're down. But actually, that's the best time to kick someone, while they're already down.

That's how I view this trade. A lot of those American index investors, who bought into the whole "Passive" investing scam, have way too much exposure to Growth and Tech, and almost no exposure to Natural Resource stocks, particularly energy.

This looks like the pain trade to me, simply because of the unwind in positioning.

Americans don't own energy. They own growth. Take a look at the weightings of your favorite US Indexes. It's pretty obnoxious really.

I still believe this is one of the better trades in the market. It's working and we're likely still in the early innings.

We went over these and how we're playing it on last night's call:

Mid-Month Conference Call Review

We ripped through 157 charts and two tables last night during the February 2022 Mid-Month Conference Call.

That's a lot of information. And we covered a lot of opportunities too. We don't intend sessions like these to replace your process but to complement it.

ASC Premium Members can click here to access the video recording and the accompanying slide deck.

Not an ASC Premium Member? Click here to learn more about how to get involved.

 

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