Retail Investors Are Still Too Cool for School

ARKK hit a low of $33.74 this morning--Its COVID crash lows were $33.00. 

And, yet, we have the VIX red and the opening dip in the broad market off a hot CPI print getting bought up. 

History suggests that we are nowhere close to the sort of widespread fear, panic, then despair necessary for a true bear market bottom. Thus, any bounces should continue to be viewed as mere pauses or intermissions from the ongoing bear in order to squeeze out bears and suck in a new batch of bottom-calling longs before the eventual next leg down. It simply is how Wall Street goes--All of the too-cool-for-school bulls who think they can "diamond hand" a loaded portfolio invariably succumb to the grizzly bear attacks once they become more frightening. 

My base case, as shared to Members of late, has been a variation of a range in the market into the holidays before a new leg down in early-2023 which may very well bring in actual fear. Of course, I am open to capitulation beforehand, and we do have possible black swans in England, Ukraine, China, etc.. 

But if bears back off into earnings season we may very well get that range. I like that way energy stocks are holding up early on, and will likely be looking back there for longs if we avoid a rollover now. 

Finally, I would avoid assuming any retail stock is an inflation hedge, as some suggested Costco. 

COST is a world class retailer with a dominant brand. However, the stock priced in years of perfection already, and is now sporting a clear major top, below.