THE BIG IDEA
One day, years ago when The Prime Wave had a corporate 9-to-5 job, my colleagues and I were eating lunch in the company cafeteria as we usually did. The lunch I had bought turned out to be rather lackluster and I mostly just pushed the food around on the plate.
My manager noticed this and asked if I was feeling ok. I replied that I was ok, just not feeling particularly hungry. He smiled and said “Not hungry enough!”
That way of thinking describes the stock market these days.
For a couple weeks now we have been in conditions that often provide for a solid bounce higher in the stock market. Yet, we are still far from extreme levels that are a slam-dunk signal to push all your chips into the pot.
The mood of the market is solidly bearish, but is it bearish enough?
Is the market so negative that there is nowhere to go but up? Probably not. A lot of smart people are betting on Donald Trump negotiating a peace deal with himself and allowing the economy to reset back to where it was six weeks ago. Nobody wants to miss out on the stock market rocketing higher if/when that happens.
But maybe we need more people to give up on that happening to finally reach a bottom. Sentiment is pessimistic, but perhaps not pessimistic enough.
The chart above plots the percentage of respondents who are bearish from the weekly AAII sentiment survey. There are more people than usual in the bear camp, but not a panic-level amount.
Meanwhile, the professional fund managers are also turning bearish. Their collective exposure to the stock market is lower than it has been in a long time, but not nearly as low as at the depths of the 2022 bear market.
So we find ourselves in some kind of a bear purgatory. The environment is bearish enough that the path of least resistance is up. However, things can still spiral to more extreme levels.
Maybe both can be true. Most bear markets contain numerous bullish bursts along the way. If it turns out that we really are in the early stages of a bear market, it would be perfectly normal to get a nice tradable rebound now.
It is a time to be a buyer. Just be ready to accept a quick, small profit. We’ll let the market tell us if it is hungry enough for anything more than that.
SEEN ON THE INTERNETS
This week’s Seen On The Internets comes from an options trader named Ed Corona, who publishes the Options Oracle newsletter. His weekly market recap for this week is titled “The Market Tried… But It’s Not Ready Yet”.
He noted that the Mag 7 stocks all got uniformly whacked last week, and that money is not necessarily leaving the market. It is simply moving to other corners of the market.
The money quote from his latest post might be “This market isn’t broken… but it’s definitely not in a strong position either.”
Long story short, here’s how Corona sees things currently:
Most likely, those three things will all happen together if they happen at all.
NUMBERS ONLY
$850 billion | The “Magnificent 7” stocks lost cca. $850 billion of their collective market value last week. |
24.1% | Even the boring stocks are not being spared. Shares of washing machine and refrigerator maker Whirlpool are down by 24% in the last month. |
44.0% | Despite the ongoing selloff in the market, 44% of S&P 500 stocks are still above their 200-day average. |
SWINGEX INDEX
As of market close on: 27 March 2026
Swingy says: Be on the lookout for a solid rebound. But we gotta watch out for those Trump-branded banana peels.
Learn more about how the Swingex Index works here.
WATCHER
Stocks highlighted here each week are not recommendations to buy or sell. They are provided as ideas for swing traders to follow up on with their own research.
GOOGL (Alphabet): In a strongly oversold market, you could pick almost any stock for a quick reversion to the mean trade. We’ll go with Alphabet, better known to you and me as Google.
GOOGL went down nearly 9% in a week and a big part of that appears to be due to the “sell what you can, not what you want” attitude on Wall Street these days. A change in the market’s mood can undo much of that loss.
Also, we see that the shares have spent much of the past week below the lower Bollinger band and doing that often leads to at least a short-term reversal.
One concerning issue with the stock is the emerging pattern of weak volume on up days compared to down days. This tells us that a good rally in the shares may be met with more selling.
A fast 5-10% jump may be in the cards but don’t get too greedy.