Bear Market Has Entered its Final Stage?Take Chances Please

Do your know the Five stages of Grief of bear market?

As of market close on Thursday,$S&P 500(.SPX)$ ,$NASDAQ(.IXIC)$$DJIA(.DJI)$ 's YTD are -18.66%, -27.04%, -15.37% respectively.

The market are digest the probabilty of FED's rate hike in 100bps, although the consensus of forcast still at 75bps rise in September 21st.

Citi's U.S. economist's base rorcast is a 75 bps hike, but he noted 100 bps is also a possibility.

Bank of America U.S. economist also expect a 75bps rate hike this month. He also predicted that the updated forecast would point to an increased risk of a hard landing.

The talk of a hawk-to-dove Fed policy has also died down, and Wall Street strategists also believe the bear market will be more difficult to defuse.

Tech stocks fell sharply on Thursday, led by technology stocks, and some traders believes that the bear market has entered its final stage.

Cited from one Hedge Fund Trader i've know, He said, often the end of a bear market is a continuous heavy-volume slump of the giants stocks. On Thursday, $Direxion Daily Technology Bull 3X Shares(TECL)$ led the decline. This scene is actually relatively rare for many months, it is almost the last round of wave of every long bear trend.
Institutions always want cheaper chips, and depressed sentiment is a mirror image of the middle (bottom) of big swings. When everyone in the market bet the bear of market, which has been last for many months, such as now, then the coming bottom will be the starting point of a big round of gains.

According to this veteran trader friend, is the current bear market really in its final stages?

The market psychology of bear markets generally follows a five stages similar to what psychologists call grief - denial, anger, bargaining, frustration, and acceptance--by Elisabeth Kubler-Ross in her 1969 model for coping with terminal illness.

Here's how they fare in the stock market:

  • Denial: At this initial stage, the prevailing view is that stock market weakness is nothing more than a buying opportunity. Far from being angry (see next phase), investors are rather optimistic, as the market correction provides an opportunity to buy stocks at a cheaper price than if the bull market continued.
  • Anger: Denial is getting harder to sustain as the market correction becomes too severe. Investor sentiment eventually turned into anger, who complained about the unfairness of the pullback. A hallmark of this stage is when investors view pullbacks as a personal insult -- as if the market cares if you or I lose money.
  • Bargaining: At this stage, investors redirect their energies to figuring out if they can maintain their lifestyle while their portfolios take a hit; retirees recalibrate their financial plans. Investors promise to forgo luxury cars or European vacations -- the fat in their budgets -- as long as they don't need to cut spending.
  • Depression: As the market continues to slide, people realize that spending cuts aren't enough. There will be major changes in lifestyle. Close to retirees working longer than originally planned; retirees returning to work.
  • Acceptance: In the final stage, investors throw in the towel. They surrendered to the bear market and stopped even imagining when it would end. They see any sign of a stronger market as a "fool's rally," enticing the gullible to lose more money on the next dip.

According to the above five psychology, how do you feel?

Macroscopically, under the macro factors of the Fed raising interest rates, the strong global harvest of the US dollar, the geopolitical crisis, the energy crisis, and the repeated epidemics dragging down the economy, the pessimism in the stock market does not seem to have dissipated.

However,Winston Churchill was working to form the United Nations after WWII, he famously said, “Never let a good crisis go to waste”.

Investor Warren Buffett once said that I was born in a bear market. Know that Buffett's performance in a bear market can be described as perfect.

During the first oil crisis in 1973, the S&P 500 index fell 13%, and Buffett achieved a positive return of 5%; in 1974, the S&P 500 continued to fall by 20%, while Buffett achieved a positive return of 6%; During the second oil crisis, the S&P 500 index fell 8%, and Buffett achieved 32% performance; in 1981, Paul Volcker took "shock therapy" to suppress inflation, raising interest rates rapidly by nearly 10%, the S&P 500 fell 7%, Buffett The yield was 31.8%, outperforming the broader market by 38.8%.

Before and after the financial crisis in 2008, Buffett increased his assets in industries such as industry, energy, health care, and optional consumption. It was also at this opportunity that Buffett made further adjustments and improvements to the degree of diversification and anti-risk capabilities of the portfolio.

There are actually ways for investors to make money in a falling market: for example, buying put options, or buying bearish ETFs, etc.

Recommend to Read:

Prepare to Hedge The Market Crash? Check These 4 Strategies

SPX Outlook & All Tickers/ETFs to Hedge the Down Market

# US Stocks Opportunities

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • Drakar
    ·2022-09-18
    definitely worth to pick up at the lowest. manage the quantity to allow further dive and holding power. patience will be rewarded
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  • Vjy
    ·2022-09-17
    Hope, it is not very late, and Great rule to implement in coming days

    "Rate hikes will challenge the stock market over the next 6-12 months. Anyone looking at this investment period should consider reducing the proportion of equities and increasing the weighting in cash, bonds and commodities."

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  • Newbie Tiger
    ·2022-09-18
    Let's hope so. Anyone has any idea if this will affect HSI positively?
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  • DJ90
    ·2022-09-18
    there's always a Santa rally, tho I believe this year it will be late, as last year's was
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  • HSTew
    ·2022-09-17
    I think now people are starting to believe that the bear is actually taking over the bull and no denial.
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  • 88wlam88
    ·2022-09-18
    Every crisis is an opportunity in disguise!
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  • Braight
    ·2022-09-18
    Hope can catch bottom
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  • SandDust
    ·2022-09-18
    I don't think the worst is here
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  • Desna10
    ·2022-09-18
    Bad idea.... stocks goes down because interest goes up..... why? cos it makes more sense to buy treasury bills and saving bonds.... risk free .... u throw into stock market.... u help the big guys to exit
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  • Furore
    ·2022-09-18
    seems to be the start of bear
    may last for another 2 quarters
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  • Ironbark
    ·2022-09-19
    Nice summary, However I think your timeline as to where we are currently is optimistic. Likely the market has been too buoyant. More downside risk to come
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  • Peter H
    ·2022-09-18
    好👌🏻
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  • Vgreen
    ·2022-09-18

    [Miser] [Miser] [Grin] [Wow] [Wow] 

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    • Vgreen
      [USD] [USD] [Allin] [Allin] [Call] [Call]
      2022-09-18
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    • Vgreen
      [Allin] [Allin]
      2022-09-18
      Reply
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    • Vgreen
      [Miser] [Miser] [Evil] [Evil] [Like] [Like]
      2022-09-18
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  • Ruiqing
    ·2022-09-18
    悲观时要看到希望,吸纳好公司的股票
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  • The_scalper
    ·2022-09-19
    There is more downside risk & not the time too be buying stocks with earning guidance slowing US just starting to gather pace. FedEx Is good example
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  • Mushizana
    ·2022-09-19
    ok thanks
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  • Iamboon
    ·2022-09-19
    Thanks for sharing. Waiting
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    • gstrader
      nice
      2022-09-19
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  • aunteenat
    ·2022-09-19

    Interesting 

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  • gcchan90
    ·2022-09-19
    killing me softly
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  • PE24
    ·2022-09-18
    thanks for sharing
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