Preserving Capital in a Challenging Environment


Back on December 31, 2021, our Chief Market Strategist Tom Bowley penned a ChartWatchers article titled "It Could be a Very Rough Start to 2022". Boy, was he right! In fact, look at the two charts below, showing the performance of both the S&P and NASDAQ since Tom's prescient call and as they hit their respective bottoms.

As you can see, from December 31, 2021 to their respective lows, the S&P gave up almost 14% and the NASDAQ gave up 20%. But that doesn't tell the whole story. Instead, as we've seen, some stocks like Shopify (SHOP) gave up a whopping 70% over just a few months.

SHOP wasn't alone, There have been a TON of growth tech stocks that suffered huge losses; SHOP simply shows what many charts have looked like during the vicious market rotation.

Finally, last week, traders realized that the selling in stocks like SHOP had gone too far. As a result, those that have been hit the hardest were scooped up last week, though still remaining well below their respective highs before the carnage began.

So now what? Well, since Tom has done a masterful job of guiding our members through these tumultuous times -- including correctly predicting a major bounce into Friday's options expiration -- he's decided to conduct a "Market Update" webinar this Wednesday, March 23 at 4:30 PM EST. This timely event is FREE for all members of the EarningsBeats and StockCharts communities and you can learn more by clicking here. You really don't want to miss this one, as Tom will be discussing how Cyclical Bear Markets unfold, how to spot Potential Bottoming Signals and more.

Every trader wants to make money, no matter the market environment. The key is having the knowledge to know when to get aggressively long or short or simply sitting on the sidelines. Sitting on the sidelines can get mighty boring, but if it has the intended effect of preserving precious capital, it should most definitely be considered as an option.

At your service,

John Hopkins

Subscribe to ChartWatchers to be notified whenever a new post is added to this blog!
comments powered by Disqus