Update: while I do believe this is the start of a bear market. Tech has wiped off 1 Trillion in value over the last month and much of the tech sector is registering the most oversold readings in many years . So we are do for a big rally in the short term over the next several weeks probably (barring any crazy bad macro news).
I covered most of this a while ago....
https://www.teamblind.com/article/Close-to-the-Bull-Trap-phase-of-the-market-cycle-sNzEBUKZ
Trade War isn't ending anytime soon. This increases CPI (much more CPI increases coming next year). Tarriffs going up 250% in January. FED can't really back down...they can slow down a bit...but they are backed into a corner to some degree. They have 4.1 Trillion they have to dump into the market ontop of raising rates a bit. Trump's budget calls for a 1 Trillion + deficit per year...and the FED can't buy the debt up. All of these factors lead to higher treasury interest rates. Which makes the stock market much less appealing since there are much safer investment vehicles available that are now returning great guaranteed rates.
Beyond that...many companies in tech have been valued at 100x-300x multiples based on 150% YoY growth. Did you really think that would last forever? No company can grow 150% every year forever. Once growth slows the growth rate of the stock has to correct...extremely hard. If you are wondering NO we have not even gotten close to a full correction for the high growth sector yet.
Global markets in bear market. US market will enter a bear market fairly soon I believe. Tech led the way up and will lead the way down.
In the coming years...expect the the US treasury rates to impact the corporate debt market (bond market) which has ballooned. This will be the Big Short 2.0 (The Central Bank 0% Rate Bubble...The Poppening) and will cause the next financial catastrophe. I'll share insight on that in the future...but when that happens...look out. It could be worse than 2008...Hopefully not. Time will tell. In any case still have some time on that one. But it's time to pay attention.
The chart below is NVDA on a monthly time-frame. I have the volume profile up so you can see where the support is....we have a tiny bit of support at the $110 area...but most of the support is actually under $40. I'm showing you this chart to give you context for all the high growth tech companies who's stocks are up 100% YoY every year. When they go parabolic...they come down even faster. MY best guess on NVDA is that it pauses at $100 until the next ER...and then crashes down to $45. NVDA FAANG etc all great companies...but clearly their stocks were overvalued and now we're going to start to find out what the true value is. Price discovery can be painful. Good luck to all. Not financial advice.
comments
I am not trying to convince anyone. Everyone can invest their money how they see fit and as it suits their temperament etc.