Are Bearish Investors Coming Out of Hibernation?

Are Bearish Investors Coming Out of Hibernation?

Posted On February 24, 2023 10:10 am

I have been bearish since May 2022. However, I have to admit that the early 2023 evidence did increase the odds of a potential return to a bull market. That party is over!

Let’s discuss the increasing evidence that bears are ready to come out of hibernation with much more downside to follow. And yes, this will come hand in hand with a trading plan to stay on the right side of action.

Market Commentary

Plain and simple, stocks rallied on a false premise to start 2023.

That being some signs of moderating inflation that could lead the Fed to end their rate hiking regime earlier than expected. This soft landing scenario compelled more investors to believe that bottom was already established and time to bid up stocks for the birth of the next bull market.

The Fed whole heartedly repudiated this idea at the February 1st meeting. They saw inflation as too sticky with no plans to change their hawkish course with higher rates in place through year end.

Bulls were clearly huffing aerosol paint cans at the time because…

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