MarketSurge powers the charts in this video.
The S&P 500 and the Nasdaq Composite are down 8% and 11% since their all-time highs. This is nothing alarming. The average SPY’s annual drop is about 14%. And yet, the declines in momentum leaders have been substantial. TSLA is down 50% from its all-time highs. At some point last week, NVDA was down 30% but managed to recover ⅓ of that. PLTR is down 30%, HOOD -41%, APP and RDDT are down 44%. VST is down 40%, VRT – 44%. GOOGL, AMZN, AAPL, and MSFT are down about 20%. MSTR and COIN are down about 45% from their 52-week highs. These are numbers that you typically see after prolonged corrections. The current one is only four weeks old. The drop has been steep and quick as tariff wars threaten growth, employment, and inflation. Without the Fed stepping in or the White House providing more clarity on their economic policy, the market will probably get spooked even more. If I had to choose, I would rather see another leg lower because this would set up the foundation for an epic bull market later this year or maybe next year. The more likely scenario is that calmer heads will prevail and we will see some form of a rally.
In the meantime, gold broke out to new all-time highs. Gold miners ETF, GDX is close to making a new multi-year high. Chinese stocks continue to gain ground. Most of the momentum stocks setting up above their 50-day moving average are currently Chinese ADRs.
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