VIX measure level of fear in market.
In 2018 Fed announced it will hike rates, market plunged VIX hit 29.9...the plunge was not small it was around 20%(?) over 2 weeks.
Recent plunge is around 2 weeks and yesterday fear was very high. Guess what level was the VIX....yes 29.9 same as 2018.
I expect the Nasdaq to go lower due to over valuation. If it does not it is not so interesting and will just go sideways as there is little to move it higher.
I don't expect it to plunge sharply anymore but to gradually weaken down to disappointment in earnings.
The bubble stocks like Zoom, Gamestop, Quantum scape, etc and ARK related stock have deflated a lot with falling 60-80% but these have not hit bottom. Using the 2000 Nasdaq bubble burst and crash the bottom can be 2 yrs away and many of the stocks will go bankrupt and disappear. Things like space stocks which were hot 1yr ago can just go to zero as they struggle to raise money to patch losses.
For me I am waiting for Nasdaq to reach 10k-12k level to look more closely at the good ones that were previous overvalued. NVIDIA, Adobe are good companies but too expensive to buy.
My purchases before this plunge Intel and Micron have done fairly and are positive as other stocks have negative returns in the same period.
The Dow is not overvalued and stocks on this index will be strong beneficiaries of US infrastructure spending, oil recovery and rising demand as the economy emerge from pandemic. I just don't see much downside even as rates goes up it is countered by the US economy depressed sector recovering.
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Tough markets brings out the tough investor in you.
If you give in to fear despite good investment decisions made earlier, you give away your future returns.
If you have views and comments please post and discuss.
I, being poor, have only my dreams; I have spread my dreams under your feet; Tread softly because you tread on my dreams.