From the desk of Ian Culley @IanCulley
No one likes a bear market, except for the bears of course.
They haze the uninitiated, test market veterans, and remind everyone that assets can go to zero.
Not fun for most!
When we take a step back and assess all the data in front of us today, the outlook remains dismal for the overall market.
The New York Stock Exchange and the Nasdaq have posted more new lows than new highs for 31 weeks and counting. Leadership groups carry a defensive tone. Topping patterns continue to resolve lower. Support levels are being ignored and violated. Long story short, it’s ugly out here.
And it’s not only stocks… Bitcoin just booked its worst month and quarter in over a decade and bonds are having one of their worst years in history.
No wonder investor sentiment is in the dumps. It’s clear we are in the midst of a bear market.
They’ve replaced the comical “stocks only go up” memes with images of the grim reaper coming for our favorite names. Even memes aren’t as funny in a bear market!
Given the current environment, we continue to rely on two key areas of the market for insight: junk bonds and credit spreads. They both offer excellent information, particularly when markets are in turmoil.
Let’s revisit these areas today.
Spoiler alert: We probably have a rough road ahead! [Read more…]