She Lost Control Again!
PTSD from Dec 2021 and August 2023
"Confusion in her eyes that says it all - She's lost control
And she's clinging to the nearest passer by - She's lost control
And she gave away the secrets of her past - And said, "I've lost control again"
And to the voice that told her when and where to act - She said, "I've lost control again"
JOY DIVISION, “She Lost Control Again”
The Market has sold off 3% since Friday.
Was it because Yellen lost control again of the long end of the yield curve? Was it because Powell finally admitted yesterday that inflation is sticky (it only took him three consecutive hot prints!)? Was it because Nuclear Apocalypse fears resurfaced? Or was it because the Indices were overbought?
The answer is probably “all of the above”. For the market, it triggered a PTSD that brought back memories of two recent events: December 2021 and August 2023. The “scary” part is that these events line up with the NDX chart I posted over the weekend in “Diary of a Madman”, whereby I warn that a “MACD sell-signal” triggered for the NDX and the previous times it happened was in Dec 2021 and August 2023. As per below:
The December 2021 event led to a 35% correction whereas the August 2023 led to a 10% correction eventually. Which one will it be this time? Let’s do a mini recap: