Where are we with this down trend in the markets?

Here is what the Nasdaq looks like right now: UGLY

Same for the S&P500, very close to a -20% from the peak which would take it to an official “bear market” (not there yet):

The game is still all around inflation, with the FED saying that they’ll keep raising interest rates and taking away money from the system till inflation will be under control.

Now, inflation is at 8.3% over the last 12 months in the US. The good news is that the April contribution was the lowest since Oct 2021 and there was an important deceleration. This is not enough. We need to see energy prices calm down which is not happening yet. See OIL prices below: not horrible, but no downtrend either.

So uncertainty is the keyword. Are we heading into a recession as we try to curb inflation? If so, more pain is ahead. If the next inflation cues/data keeps improving, then the FED will change to a less tightening policy and the market can reverse towards the upside.

What is good instead?

• Companies valuations are getting cheaper and now we start to be in the fair valuation zone, broadly speaking;

• The smallest companies are showing more resilience vs big companies as they have been beaten way harder at this point and here many big opportunities will be found as soon as the trend starts reversing;

• Companies are healthy and increasing investments;

• Credit conditions are still healthy

What am I doing?

I’ll be watching, mostly.

In the free 10XPOT [link] only $SWAV and $KLIC look like they have found a “floor”. In the SMALL BETS 10XPOT we have many more companies showing like they have found a floor.

I will share it here when I decide to add to the POTS again.

Some good inflation data would surely help.

Let’s stay patient. As we’ll get to the “other side” amazing opportunities will present.

Read my “zoom out” post for context if you haven’t yet.

Have a beautiful weekend!

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Important: Informational purposes only.This is not investment advice. Consult a licensed financial advisor before making any investment decision.