There was a very brief spike in the first few minutes of trading, but it fizzled out quickly, and the indexes undercut Tuesday’s lows. The indexes have not yet tested the lows of the year, but they are having a difficult time resisting the downward tug. New 12-month lows are over 400 names again, with Amazon ( AMZN) , Apple ( AAPL) , and Tesla ( TSLA) the most prominent names on the list. Much of the selling is being attributed to investors locking in tax-losses, but many investors don’t have any substantial gains in 2022 so they don’t need the losses.
The more likely cause of the selling is to wipe the slate clean and start fresh once the calendar turns over. What is most unusual about this action is that it is so lopsided right now. We have not seen any meaningful upside volatility. It has just been very dreary selling, and there is no relief from the gloom right now.
I’ve been trading for about 25 years, and I believe that 2022 has been the most difficult market that I have encountered. The bear markets in 2008-2009 and in the early 2000s were very challenging, but certain areas of the market have been in downtrends since early 2001 and still are not showing any signs of a major bottom. There have been some counter-trend bounces to trade, but the Fed has been a major roadblock and looks to stay that way for a while. I’m optimistic about the trading that lies ahead, but it will be a tough slog before the bear market eventually ends.
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