These days, it's a big ask for a few normal weeks without some crazy headlines plaguing the front page of the news. And we're feeling it in the markets for sure. The question on everyone's mind is whether we're in a new bear market or if this is just a blip in the primary uptrend. Well, we don't know… or at least, we don't know for certain.
Now, being honest, it all looks a bit shaky. If we take a look at U.S. stocks priced in real money, aka gold, we can actually see we're at a major crossroads that could signal a new secular bear market.
Elsewhere, the quits vs. layoffs ratio has completely decoupled from the market. Major warning signals are popping up all over the place if we're being objective. Of course, taking such a strong viewpoint from only two data points is a bit of a dangerous game, but regardless, caution is advised.
However, there's a very big 'but'. The indices might look horrible, but if we look at industry performance relative to the S&P 500, most have held up quite well. There are only two industries that are really struggling to cope: technology and consumer discretionary. Take a look below. I used February 19th as the starting point since that also marked the top in the S&P 500.
Obviously, this doesn't mean it's all rainbows and sunshine, but it's something to keep in mind. It's a good sign that most industries are staying relatively strong. After all, the heavy tech focus of the indices is worth considering.
One sector that's really caught my attention is insurance. It's held up incredibly well. If this market decides to recover again, this industry might be at the forefront of the next leg higher in the bull market. Take a look below at the ETFs I use to gauge the sector.
Trying to predict when the market will bottom (or if it even will anytime soon) is a losing game. It's an easy way to burn a lot of mental energy and come out worse off. Unless the signals of a bottom are so clear that it's obvious to a child, it's just not worth the effort. All we can do is take note of what’s holding up well and be ready. When the time comes, we’ll be in a fresh state of mind, no fear, no pressure, and hopefully with an intact account value. :)
So, what do you think? Where's the market headed? Feel free to drop a comment below or send me a message via the contact form here. I always love to hear from readers!