09May10:38 amEST

You Fell Victim to One of the Classic Blunders

Bear markets are notorious, in their relatively early stages, for creating a narrative as to why a certain bearish outcome simply cannot happen. Many market payers, due to prior conditioning of the bull market (especially this one) assume the former glory leaders like the "FAANG" gang will roar back to new highs as inflation recedes and growth slows, leading to the prior goldilocks period of slow growth amid low inflation where growth stocks thrived. 

But those days are not coming back anytime soon. And once market players accept that, we should finally, and ironically, see the outright fear and panic necessary to form a durable bottom. However, we are not there yet, even with today's selloff. Note the VIX, for example, is still below the highs from earlier this year. But I am still looking to see the likes of AAPL and TSLA crack hard, what with their market cap size and how well they have relatively held up to other tech leaders. 

Moreover, MasterCard and Visa are finally cracking a bit today despite both names having rallied in recent weeks after earnings. Those earnings rallies are long gone, now, though the long-term steep charts have barely budged. That should change soon, as there is plenty of air below.

With inflation likely to stay high for the foreseeable future even when it arbitrarily "peaks," and The Fed laughably behind the inflation fighting/tightening curve, I do not expect the prior goldilocks era of mega cap growth names to come back anytime soon, meaning years. 

The next cyclical bull run we see should very likely be led by energy, commodities at-large, material names, and defensives. Until then, be on the lookout for the trillions hiding in the former mega cap leaders to keep unwinding lower. 

It's OK to Be Wrong; It's No... Not Every Safe Stock is Safe...


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