A Major Update on Markets: 2022 Edition

It’s been more than a year since I last posted on this blog, and it’s time to put thoughts on paper again.

For new readers, the archived reports contain a detailed background of my views over the last few years and information on my process & approach, which may be useful to your Investment process going forward. Best of luck.

Background: I’m a Portfolio & Fund Manager running a diversified Global Equity and Macro strategy. I also serve as Strategic Advisor to Global Funds and Family Offices, and have worked closely with Institutional Partners for over two decades. As an independent Advisor, my goal is to provide (1) critical and objective analysis, paired with (2) process-driven consistency and risk management. From time to time, I’ve shared a small fraction of my work on Twitter and this Blog – in an effort to show a unique, different angle to themes investors are focused on. If you’re an Institutional investor looking to add an Advisor to your process, and my work has helped you throughout the years, please reach out. Thanks for your interest and I look forward to meeting you.


Haven’t posted here in over a year so there’s a lot to cover, to build a foundation for the rest of this review:

  • I spent most of 2021 holding a constructive view on Equities, as outlined on Twitter early in that year (some examples here, here, here, here and here). I expanded those ideas in a detailed April 2021 review.
  • Despite receiving continuous pushback to my tweets all year, my constructive view on Equities proved to be mostly correct, as every small pullback triggered panic and renewed the “wall of worry”.
  • In particular, I’d like to highlight this chart from February 2021, which we’ll revisit later in this review and will be extremely important to discuss:


  • After a sharp correction in Quality Tech Stocks and Treasury Bonds in Q1 2021, I began accumulating Quality Tech exposure for a potential Tactical rally. I referenced these views in several tweets from March-April 2021: some examples here, here and here. At the time I also turned cautious on Energy. The subsequent rotation out of Energy and into Tech lasted much longer than I envisioned. Quality Tech rallied until year-end 2021, while Energy corrected sideways until early December 2021.
  • Still, by mid-July 2021 I began to view Bond Yields had fallen far too much, while many Energy/Materials Stocks got very oversold.
  • To make things even more interesting, in July 2021 the Fed Chairman actually said he didn’t know “what moved Rates”. I wrote this tweet for posterity. It was clear from that point on: the Fed was casually asleep at the wheel, especially if the long-delayed post-COVID global cyclical recovery was to finally take off (my firm and partners’ core view).
  • By mid-August 2021, I was accumulating a large Core Energy/Materials Stock book (some examples here, here, here and here). Simultaneously, I took every opportunity to warn of the risks of Bond Yields rising (some examples here and here).
  • I stuck with the Energy book despite the drawdown in November/December 2021 (“Omicron panic”), while highlighting once again the mass panic in markets (here and here).
  • 2022 started out strong for the fund, as we remained Core Long Energy/Materials for most of Q1 and avoided the collapse in Tech & Bonds.
  • My Core Models fired Tactical Buy signals throughout Q1-Q2 2022, which helped identify sharp 2-3 week Index rallies within the bigger downtrend. Ultimately however, none of those rallies had any lasting power, and rolled over to new lows.
  • By late April 2022, Core Models were on track for a bottom possibly around mid-May CPI/FOMC, as I tweeted here. Two weeks later, Core Models began turning up and market action was finally showing a significant improvement. Individual Stocks were also looking fairly strong. I was very Bullish for a Tactical 2-3 month rally in Stocks, regardless of the tape being a Bull or Bear Market.
  • The snapback rally did not begin in May 2022 as I thought. Stocks took another dive into June, triggering mass capitulation (here, here and here). I was fairly Long into that decline. It wasn’t fun, but (1) Core Models were constructive and (2) many Quality Tech Stocks were still holding above their May lows, despite the new lows in the Indexes in June. In fact, even the High-Beta Stocks which had led the Bear Market decline with enormous losses, were now starting to stabilize. This was an important clue as I shared here.

Stocks staged a powerful rally into mid-August, and I began to see Tactical concerns in Core Models, market Positioning, and Individual Stock action:


This has been an extremely difficult year for everyone, including myself. Risk-management remains critical, even more so when liquidity is this abysmal. Personally, I feel we’ve navigated well through some critical points, but could have done better in some others. The key as always is to stay in the game, not get discouraged and focus on what’s ahead.

In this section, I’ll share some reviews sent to Partners in recent weeks, with thoughts moving forward.

Before we begin, always remember:

  • Scenario-building exercises are extremely valuable IF one remains flexible and willing to adapt to all outcomes.
  • We can only ever work with information available today.
  • Keep an open mind, always.
  • If the winds change, adjust the sails.

Here we go…

Published August 20-21 2022
Stocks have likely peaked:
• This was a textbook rally from start to finish.
• Every core Signal has confirmed a Tactical Top.
• Stocks which led the rally turned down before the Indexes and are leading lower.
• Credit markets have turned down.
• Volatility has turned up.
• Every Macro tailwind from the last two months has turned into a headwind.
• The Dollar, Global Bond Yields and Oil/Energy confirmed new uptrends this week.

Core Equity pushed to extreme overbought this week.

Core Risk turned down from extreme overbought.

Meme Stocks had a final spike and reversed violently – this confirms an important Top. Important to note – this extreme speculative behavior is not usually seen at the start of a real Bull Market.

Every core Signal has confirmed a Tactical Top.

Stocks which led the rally turned down before the Indexes and are leading lower:

Every Macro tailwind from the last two months has turned into a headwind.
The Dollar, Global Bond Yields and Oil/Energy confirmed new uptrends this week:

Credit markets have turned down:

Volatility has turned up:

The next review contains some important information on markets from late August 2022. Specifically, there has been a lot of public discussion on whether we are in a new Bull Market.

I’ll try to present a different view, but first:

  • Yes, this could be a Bull Market.
  • It could also be a Bear Market in its final stages, with a retest of the lows or higher low at some point in Q3-Q4.
  • It could be a Bear Market which continues into next year and produces several more Bear Market rallies along the way.
  • Ultimately however, this Bull/Bear discussion may not matter all that much.
  • As with everything I share on Twitter and with Institutional Partners: below I’ve tried to offer a unique, different angle to themes that investors are focused on. I hope it will help you navigate these difficult times.

Published August 27-28 2022


The Global Bear Market may not be over yet.


Global Stock Markets with rising 200dmas (uptrends) never reached a Thrust.

Remember this chart from the top of this Blog post, which I tweeted in February 2021… here is the updated version:
• Prior Bear Markets ended when the percentage of Global Stock Markets in uptrends (rising 200dma) reached 98-100%.
• The chart is nowhere near that today…
• The last two months produced a weak bounce from 15% to 30%.
• Most Global Stock Markets remain in downtrends – it’s still a Global Bear Market for now.
• Most concerning – this indicator never got fully oversold at the June bottom…
• In fact – this Global Bear Market didn’t even get close to the oversold conditions seen in 1998, 2011, 2018… or even 2002, 2008, 2016, 2020… which dropped to zero.
• What if Global Stock Markets decline to a “real” oversold signal on this chart?

The High-Low Oscillator never reached a Thrust.
• Prior Bear Markets ended when the percentage of New Highs reached 98-100% – per the green boxes below.
• The chart is nowhere near that today…

Worse, the High-Low Oscillator just peaked at an area which topped historical Bear Market rallies (red arrow below).
• Even more concerning – this indicator never got fully oversold at the June bottom…
• This Bear Market didn’t even get close to the oversold conditions seen in 1998 or 2018… or even 2002, 2008, 2020… which dropped to zero.
• What if Stocks decline to a “real” oversold signal on this chart?

For comparison, other Indexes are much weaker:
• S&P Breadth is being held up by Defensives & Energy – but other Indexes don’t have this luxury.
• For example – below, the Nasdaq and NYSE Composites together represent thousands of Stocks.
• Prior Bear Markets ended when the percentage of New Highs reached 98-100%.
• There’s no evidence of a Bull Market at this time:

Another important indicator – the number of S&P Stocks down 20% has barely recovered.
• Prior Bear Markets in 2002, 2008 and even 2020 reached more than 90% of Stocks down 20%.
• Prior Bear Markets also ended with huge rallies – per the green boxes below.
• Similar to the prior charts, there’s no clear evidence of a Bull Market yet… and the 50% area seems to be acting as important resistance for now (horizontal line).
• Other Indexes look even worse (not shown).

Core Equity Models have a long way down.

Core Risk Models need a lot of work to the downside.

Flows have come a long way from the June bottom – and many key areas have seen a full reversal. For instance: Retail ETF Flows are spiking to extreme FOMO. There was no capitulation yet – not even close. What if the biggest risk is that the Bear Market is not over yet – and more Selling/Capitulation is needed to produce a “real” bottom?


Most of my Core Model signals are still in downtrends and haven’t reached the conditions for a “true” bottom in Stocks. Therefore I remain cautious for now.

Remember: these are extremely tough times and no one knows what comes next.

But thankfully we don’t have to know if this is a Bull or Bear Market.

Right now it sure looks more like a Bear than a Bull, but be prepared for all outcomes in the coming months.

Most importantly:

  • Be ready to adjust Tactically as markets and data oscillate between extremes.
  • Be flexible, patient, and above all else: avoid the herd consensus.

I strongly believe that the few investors who can avoid the countless pitfalls still ahead, will reap enormous opportunities on the other side.

As always: stay focused… one day at a time.

Good luck, and until next time,


Thanks for reading.

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