Before I hit the charts and explain my thread from March 24th, a brief musical summary of the stock market in the first quarter of this year.
The classics never go out of style in music nor in stock market analysis.
While there were some insane people proclaiming things like what this Tweet said below, there is still a dark reality lurking behind the scenes.
If there is any indicator that the end of the world is on the way, that Tweet was it.
This might then beg the question of why did I issue the statements that I did on March 24th?
If one reviews the market action that day the entire system appeared to be on the precipice of an extraordinary decline due to banking system problems in Europe and the US. Futures were tanking and the world was uncertain what would happen next. I assumed that the normal course of action would happen where the serious money would liquidate their holdings and spend two weeks off in Nevis, Hawaii, or wherever and return after the Easter and Passover holidays.
And so on the open of the market they did. Then the serious money left the party. The algos and children took over and bid the market up with help from the PPT and all was well. That is all that happened folks, the shorts were squeezed out and everything was stable once again.
Except it is not.
On to the review of the the 1st quarter of 2023 in equities, which will hopefully cause some of the cyber-investing Fin-Twit community to take pause.
First off, the cheerleader indicator the NASDAQ Composite which roared up at the start of the year, started to correct and now is back in “bull” market territory.
In other words, the markets went no where on no volume and no commitment to a direction be it that of the bull or the bear.
The S&P 500 was a tad bit worse with only 8 stocks dragging it higher from February’s carnage:
The Dow Jones Industrial Average put on a show also, but all for naught:
Next up, the Russell 2000 which wasn’t invited to the party of the few and almighty last quarter:
Finally the largest index of them all, the Wilshire 5000:
The charts above demonstrate that they have the ability to juice markets still as needed, even in the face of upcoming layoffs, higher interest rates, persistent structural inflation, and problems in the junk bond markets starting to appear.
Perhaps this two year chart of the Wilshire 5000 should give everyone some pause:
The bear might just be sleeping in.
And if my calculations are correct, the bear will begin to return with a vengeance starting with some strong action on April 11th and really begin to roar loudly in May.