Bear Market Lindzon …What Next?

I was working at Stocktwits HQ yesterday afternoon during the meltdown and the office and streams were of course buzzing. It was fun to see the crew keep their sense of humor. When we started Stocktwits we wanted to keep our brand educational, fun and irreverent. Losses are not funny, but the community is about sharing ideas, getting smarter and helping people learn the language of the markets.

The entry to the office sets the tone:

Now to the markets…today was just nasty.

My friend Michael Batnick said it best about yesterday’s market:

Today was one of those days where we’re reminded what it feels like to lose money. We know this is what we signed up for, but it doesn’t make dealing with them any easier when they happen. All of the red dots in the plot below felt like it was the end of the party. One of them, maybe this one, will in fact be the final hurrah.

The S&P 500 experienced its twentieth -3% day since the bear market ended in 2009. The NASDAQ-100 experienced its eighth -4% day. Today was not fun.

If you panicked and sold today, you still had a good year as the S&P is still up 5 percent and today’s S&P prices just bring us back to July

Another friend Frank Zorilla is dead on with this:

Keep your cool, what’s done is done. There’s no ROI in whipping yourself, buckle down and move ahead.

Ivanhoff reminded me that in nasty down markets, stocks tend to move together, so avoid them and if you must trade, use the indexes. This is always good advice.

I made a few mistakes by nibbling on stocks and will have to regroup tomorrow.

I was having dinner last night with Charlie Bilelo and we were reviewing the last few weeks and all the negative signals he was sharing in the stream (housing stocks crushed, rising rates, rising oil, destroyed emerging market stocks, and poor breadth). In hindight, today was inevitable.

As Charlie said to me…Now, we are in it and nobody really knows. We will see.

Last week after Ivanhoff mentioned he was getting short stocks in our ‘Momentum Monday’ weekly episode, I switched my Twitter handle to Bear Market Lindzon. I wish I had also shorted stocks, but I am wired to be long.

On October 6th my inner voice was telling me to ‘sell stocks’ but I did not.

Some of the carnage today:

Goldman Sachs at 52 week lows

Blackrock at 52 week lows

Momentum Stocks breached their 200 day average (first time since 2016)

Airlines at 24 month low (one year ago, American Airlines CEO sais they would never lose money again…)

That 3x leveraged homebuilder stock with the cutesy ticket symbol $NAIL….down 61 percent.

I don’t plan on doing much today, but will be on Stocktwits sharing my thoughts, watching the action and taking action if the right opportunities do present themselves. I have my lists with my levels prepared.

PS – While I was stuck in meetings, Ivanhoff made a mid week ‘Momentum Monday’ episode (watch here). He took a few funny pot shots at me and laid out some ideas and offered some context for what’s happening in the markets.

Also published on Medium.