Have We Reached the Bottom Yet?

(7/20/22) We haven't seen investors THIS negative since 2008--does this suggest we're nearing a market bottom? This is not then: We're running the highest inflation rate in 40-years, the Fed is tightening its balance sheet AND hiking interest rates. What do the technical charts tell us? Markets are oversold by two standard deviations from the 50-WMA--but not as bad as in May, or March 2020, or in early 2016, pre-Brexit. The MACD indicator is very low and starting to turn positive. Other oversold indicators are behaving similarly and starting to turn up as well. This COULD set up for a decent, tradable rally. A longer perspective, back to 1994, illustrates market behavior following the Dot-com crash of 2000, the financial crisis of 2008, Brexit in 2015-16, the March 2020 pandemic sell-off, and the Fed taper tantrum of 2018--all compared to the bear market sell-off we're experiencing now. It is key to note the declines are smaller in magnitude going forward--but over-sold indicators did not register extremes like we're seeing now. So, yes, we could be seeing the starts of an intermediate term bottom in the market--but it's still too early to jump into the market with both feet.
Hosted by RIA Advisors' Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton
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