Market trends continue to drop due to investor concerns about geopolitical events, record inflation, rising interest rates, slowing housing, plummeting auto sales, increasing retail inventories, expanding consumer credit and pending layoffs.
Even stocks that had previously held up or remained strong now seem to be showing signs of topping and breaking down. This is normal behavior for a bear market trend where the initial wave of vulnerable markets takes a hit that then causes traders to shelter their remaining cash in more robust markets. But as losses mount and their capital diminishes, traders eventually are forced to liquidate even their strong market assets to meet margin calls and raise needed cash.
As we review the following market trends, we quickly realize that the best option for most traders is to simply go to cash, watch and wait.
Berkshire Hathaway Down 25.34%
- Berkshire Hathaway (NYSE:BRKa) (NYSE:BRKb) was one of the few companies in the early part of Q1 2022 that bucked the downtrend and had remained strong.
- By the end of Q1 2022, BRK had put in a top that was greater than 200% of its COVID 2020 low.
- Now, as we approach the end of Q2 2022, BRK has lost 25.34% and is down 10.34% year-to-date.
QQQ NASDAQ 100 ETF Down 33.16%
- Invesco QQQ Trust (NASDAQ:QQQ) put in its top at the very end of Q4 2021 primarily due to rising inflation and the strong U.S. dollar.
- After its initial Q1 2022 drop of 21.6%, QQQ had a rally back up, which was a 61.8% correction to put in a lower top.
- Now, as we approach the end of Q2 2022, QQQ has lost 33.16% and is down 30.98% year to date.
Russell 2000 Index Down 32.23%
- The Russell 2000 index (comprised of 2,000 small-cap companies) put in its top at the very end of Q4 2021 due to rising inflation and the strong U.S. dollar.
- After its initial Q1 2022 drop of 20.93%, the Russell had a rally back up, which was a 38.2% correction to put in a lower secondary top.
- Now, as we approach the end of Q2 2022, the Russell has lost 32.23% and is down 25.81% year to date.
Bitcoin Down 71-87%
- Bitcoin put in its final top at the very end of Q4 2021.
- Bitcoin had a 68-day rally back up, which only corrected about 35% of its initial down move to put in a lower secondary top.
- Now, as we approach the end of Q2 2022, Bitcoin has lost 71.87%.
