State of the Stocks Bear Market

By: Nadeem_Walayat

Stocks put in a bottom of sorts Friday, but this is NOT THE Bottom where my existing view is to expect a Dow bottom during August at an approx level at 29,600, which is pending my next in-depth analysis. So 32,200 puts the Dow about 9% away from a probable bottom that would result in a 25% peak to trough bear market so we are about 2/3rds the way through this bear market in terms of price.

My strategy is to BUY during the DECLINES at NEW lows and then seek to sell a fraction of what I bought during corrective rallies, which has the effect of lowering my average buying price, with target sells typically for gains of 15% to 30% above where I bought, for instance a fraction of AMD buys will be sold at around $110 and $120 and similar for most stocks where what I sell is dependant upon how much I hold and where I bought.

The bottom line is that we are having a bear market rally, it would be nuts to try and ride the bear market rally by actually buying it once its underway, the best strategy is to accumulate during the sell offs and if a rally materialises to sell some of what one bought to drive average buying prices lower.

I am not even going to try and guess how high this bear market rally will go as they tend to be very volatile and short lived as we have recently seen the AMD stock price can be up 10% one day and down 10% the next! So I just take what the market giveth, if it gives a strong rally to sell into then I take that to reduce exposure a little, if it gives new bear market lows in target stocks then I buy more to continue building my positions though given the collapse in sterling that is not straightforward. For instance here is what the Google stock price looks like year to date for US investors vs UK investors. Where buying Google during late January was just as good as buying at recent lows. so the bear market experience is not quite the same for UK and US investors,

The buffoons in the government and at bank of England are hell bent on sending sterling to parity to the US dollar by fighting 10% inflation with a joke 1% interest rate! All whilst there is a growing clamber for the government to hand out even more free money to people because of the cost of living crisis without any of the fools realising that the cost of living crisis is a function of the government handing out FREE MONEY! So the more the government prints the higher inflation will go ! Thus we in the UK have no choice but to KEEP CALM and CARRY on BUYING US AI TECH STOCKS given sterling's downwards death spiral and thus we could very easily see Google and most AI tech's soon trade at STERLING NEW all time highs, as 11% in these markets equates to barely 2 or 3 days of strong upwards price action!

The bottom line is that this bear market has further to go where low multiple stocks with growing earnings offer downside protection whilst retaining upside potential of exposure to AI mega-trend and derivatives thereof.

This article is an excerpt from my recent exensive analysis of the state of the stocks bear market and more AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? that was first been made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

Most recent analysis -

• Dow 2022 Stock Market Trend Pattern
• AI Tech Stocks Name of the Game, Climate Change Housing Market Impact and the Next Empires
• Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally
• AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant?
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Whilst my recent in-depth analysis is - UK House Prices Three Trend Forecast 2022 to 2025, where I pealed away every layer of the UK housing market I could think of to arrive at a high probability of trend forecast, no following of the consensus herd here! Whilst completion of my extensive analysis of the US housing market is imminent.

UK House Prices Trend Forecast 2022 to 2025

THE INFLATION MEGA-TREND
WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING
High Inflation Forecast for Whole of this Decade Due to Rampant Money Printing
Fed Inflation Strategy Revealed
Russian Sanctions Stagflation Driver
RECESSION RISKS 2023
UK Debt Inflation Smoking Gun
Britains' Hyper Housing Market
UK Population Growth Forecast 2010 to 2030
UK House Building and Population Growth Analysis
UK Over Crowding Ratio
Overcrowding Implications for UK House Prices
UK Housing Market Affordability
UK House Prices Real Terms Sustainable Trend
UK House Prices Relative to GDP Growth
UK House Prices Momentum Forecast
UK House Prices and the Inflation Mega-trend
Lets Get Jiggy With UK INTEREST RATES
Is the US Yield Curve Inversion Broken?
UK house Prices and Yield Curve Inversions
Interest Rates How High WIll they Go?
Work From Home Inflationary BOOM?
Formulating a UK House Prices Forecast 
UK House Prices 2022 to 2025 Trend Forecast Conclusion
Peering into the Mists of TIme
Risks to the Forecasts
US House Prices Trend Forecast 2022-2024

So if you want immediate access to a high probability trend forecast of UK house prices, with US and global housing markets analysis to follow soon then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

My Main Analysis Schedule

• UK House Prices Trend Forecast - Complete
• US House Prices Trend Forecast - 85%
• Global Housing / Investing Markets - 60%
• US Dollar / British Pound Trend Forecasts - 0%
• Stock Market Trend forecast into End 2022 - 0%
• High Risk Stocks Update - Health / Biotech Focus - 0%
• How to Get Rich - 85%
• 
• Gold and Silver Analysis - 0%
• State of the Crypto Markets

Again for immediate access to all my work do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

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Your analyst BUYING the panic selling falling knives.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2022 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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