{"id":73530,"date":"2025-04-03T17:08:21","date_gmt":"2025-04-04T00:08:21","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=73530"},"modified":"2025-04-08T23:05:23","modified_gmt":"2025-04-09T06:05:23","slug":"finally-oversold-but-so-what","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2025\/04\/03\/finally-oversold-but-so-what\/","title":{"rendered":"Finally Oversold! … But So What? – The Market Breadth"},"content":{"rendered":"\n

Stock Market Commentary<\/strong><\/h2>\n\n\n\n

Today was a brutal day in the stock market. The only good news I can report is that market breadth finally dropped into my official oversold territory. However, “so what?” sounds like an appropriate question to ask in the face of deepening market angst over tariffs. For example, a headline from Yahoo Finance read that today was the worst market event since 2020<\/a>. On the flip side, Bloomberg reported that “Retail Traders Step In to Buy as Others Flee in Tariff Rout<\/a>“: <\/p>\n\n\n\n

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“Through the first three hours of trading, retail investors were net buyers of $2.8 billion in stock, the second highest level on record since JPMorgan Chase & Co. began tracking the data a decade ago, according to Emma Wu, the bank\u2019s global quantitative and derivatives strategist. The buying ranged from ETFs to single stocks, with ETFs tracking the S&P 500 seeing the same level of inflows as Nvidia and Tesla Inc. combined…Meanwhile, hedge funds dumped global stocks at the fastest rate in 12 years in March, according to Goldman Sachs Group Inc. data.”<\/p>\n\n\n\n

At least I understand why the market kept selling off and closed at the lows. Market makers are likely going to try to shake these stubborn buyers out of their positions at lower prices.<\/p>\n<\/blockquote>\n\n\n\n

Anyway, I have long wanted better data on the selling dynamics in the market. “Everywhere” I turn, the advice to retail traders and investors is consistent: do not panic<\/strong> (including here). \u201cBuy the dip\u201d has become standard advice, and now, in extreme situations, it becomes \u201cextremely buy the dip.\u201d This approach has worked well in the past, so I understand the near automatic buy responses.<\/p>\n\n\n\n

Still, I am wary despite the market triggering bullish oversold conditions for me. When I see nearly every financial personality on YouTube and social media repeating the same advice\u2014stick to the plan, buy quality companies, etc…\u2014I question who exactly is doing the selling if everyone is supposedly holding and buying. Some may blame algorithms or market makers manipulating stocks, but someone is on the other end\u2014even if the robot is selling on behalf of a human.<\/p>\n\n\n\n

I am a contrarian by nature, so I feel at odds with wariness at such an extreme in market fear. I am keeping an eye out for any evidence that this<\/em> time is indeed different. For example, in my last blog post, “Time for a Tariff Crash Trading Plan<\/a>“, I outlined reasons to stay alert to the possibility that this moment marks a true change in the global economic structure. If the U.S. is indeed restructuring the global economic order, then the odds for massive downside risks remain salient. <\/p>\n\n\n\n

And of course, conditions on the ground could change rapidly. One day the U.S. could flip the switch and claim it wants a return to normalcy…which of course would be hard to believe or trust at this point. <\/p>\n\n\n\n

Jamie Dimon’s “get over it” soundbite on tariffs two months ago at Davos did NOT age well!<\/p>\n\n\n\n

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