Panic Selloff Begins? Will the Recession Trade Really Happen?

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04-04
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The Fear and Greed Index dropped to 8 yesterday, with its lowest point in May 2022 reaching 3.


orange line is fear and greed index; gray line is S&P 500 performance

$S&P 500(.SPX)$ companies lost a combined $2.4 trillion in market value during Thursday’s selloff on Wall Street, marking their biggest one-day loss since March 16, 2020, when the onset of the COVID-19 pandemic sent global markets into a tailspin.

Following the tariff storm yesterday, the market now faces the challenge of March’s non-farm payrolls (NFP) report and unemployment rate today.

The market expects no major surprises in the March jobs report, forecasting 140,000 new jobs, an unemployment rate of 4.1%, and average hourly earnings rising 4% YoY, all within long-term trends. However, mass layoffs at DOGE could introduce uncertainty.

Should you buy the dip amid extreme fear, or wait for today’s data before making a decision?

Does a Trading Recession Mean an Actual Recession?

Since the 21st century, trading recessions have only led to actual recessions three times:

  • 2001 (lasted 8 months)

  • 2007-2009 (lasted 18 months)

  • 2020 (lasted 2 months)

Analysts believe that this year’s outlook remains pessimistic for several reasons:

  1. US stock valuations remain high. If the market continues pricing in a recession, the current decline may not be nearly enough.

  2. A bear market under Trump’s presidency is highly probable. Given such high valuations, a bear market is likely to occur at least once during Trump’s four-year term. If that’s the case, it might as well happen sooner rather than later—allowing Trump to shift the blame to Biden. A market drop early in his term is also preferable to a crash right before reelection.

  3. A mild recession could force the Fed to cut rates early, preventing a severe economic downturn. This makes a moderate recession in the second half of the year increasingly likely. Since capital markets price in expectations, Q2 stocks may remain under pressure.

JPMorgan Chief Economist say global recession risk rises from 40% to 60% this year.

Market Selloff: Is Nvidia a Buy at $100?

The entire market has plunged, and Nvidia is now at a critical $100 level—is this a buying opportunity?

$NVIDIA(NVDA)$ was down 33% from its high of $153.13. However, the last time Nvidia peaked at $346 (pre-split) in 2021, it declined 68% to $108 before bottoming out.

Now, with voices emerging that the semiconductor bull run is over, is the current correction far from enough?


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Market Loses Steam? Is This Rebound Over?
The US stock market saw a third biggest surge as Trump stated that he has authorized a 90-day tariff suspension for countries that do not take retaliatory actions. Statistically, some of the best-performing days in stock market history have occurred during bear markets. Of the Nasdaq’s top 25 trading days, 22 happened during periods of crisis: the dot-com bust, the 2008–09 financial meltdown, or early COVID days. -------------- How do you feel about we are witnessing the history? Did you profit from this epic rebound? Is market losing steam and the rebound over?
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Comments

  • Shyon
    04-06
    Shyon
    The Fear and Greed Index dropping to 8 is a strong indicator of extreme panic. While the market is bracing for the March jobs report, history shows that extreme fear often marks the start of opportunity. I’m watching the data, but I also believe great entries rarely feel comfortable.

    Nvidia hitting $100 caught my attention. It’s down 33% from recent highs, and some are questioning if the semiconductor rally is over. But we've seen this before—back in 2021, Nvidia dropped over 60% before rebounding. I still believe in its long-term role in AI and chips, so I see this as a chance to start accumulating, even if more volatility comes.

    There’s no doubt recession risks are rising, and the short-term outlook is shaky. But whether it’s a trading recession or a real one, I’d rather position myself early than wait for perfect clarity. Fear creates opportunity—especially for those thinking long term.
    @Tiger_comments @TigerStars @Daily_Discussion @TigerGPT @Tiger_SG

  • icycrystal
    04-04
    icycrystal
    @Shyon @rL @GoodLife99 @Universe宇宙 @koolgal @LMSunshine @HelenJanet @Aqa @SPACE ROCKET @TigerGPT

    The Fear and Greed Index dropped to 8 yesterday, with its lowest point in May 2022 reaching 3.

    $S&P 500(.SPX)$ companies lost a combined $2.4 trillion in market value during Thursday’s selloff on Wall Street, marking their biggest one-day loss since March 16, 2020, when the onset of the COVID-19 pandemic sent global markets into a tailspin.

    Following the tariff storm yesterday, the market now faces the challenge of March’s non-farm payrolls (NFP) report and unemployment rate today.

    Should you buy the dip amid extreme fear, or wait for today’s data before making a decision?

    Now, with voices emerging that the semiconductor bull run is over, is the current correction far from enough?

  • koolgal
    04-05
    koolgal

    🌟🌟🌟I have not seen such Fear and Panic in the markets, not since Covid days.  Almost everything is in the red and it can really be scary .  However it is times like this that we need a deep breath and decide what our next action would be.    

    As a long term investor, I will stay invested and continue to dollar cost average my favourite stocks and ETFs .  

    As Warren Buffett likes to say "When there is Fear in the markets, it is time to be greedy ."

    @Tiger_comments  @TigerStars  @CaptainTiger  @TigerClub  @Tiger_SG  

  • Aqa
    04-06
    Aqa
    President Donald Trump’s vengeful and impetuous Tariffs has started the April storm that sent the global markets into a tailspin. We are now sailing into an era of uncertainty. A bear market under Trump’s presidency is highly probable. He is not going to stop the recession coming. Investors are now extremely careful and in fear. Fear does creat buying opportunities. Do look into the market carefully when invest. Do due diligence before each trade. Good luck🍀 Thanks @Tiger_comments @icycrystal
  • MHh
    04-04
    MHh
    I think panic selling has begun. It is always better to lock in profits. However, for me I would prefer to wait before I make any trade. I would prefer to buy the dip at a later time as I feel that the market still has more to go down. I might nibble a bit if the price is really tempting. I would definitely prefer to stick with ETFs that are less volatile instead of individual stocks. The recession trade will definitely happen if countries retaliate but I believe most leaders would hold it as a trade war wouldn’t benefit their countries. Most would engage in a dialogue with trump which is what he wants and when he reduces the tariffs, the market should lift again. The key question is we don’t know when this would happen and what the other countries would do. It is also a possibility that countries outside of the US can rearrange their trades and trade amongst themselves without the US. Afterall, the Chinese market is bigger than the US and they are resource rich too.
  • vuvence IX
    04-05
    vuvence IX
    Because of the recent bull run, stocks fell from a good height. I think President Trump wants this reset done with ASAP. He knows there will be pain. He has had tariffs on his radar since the 80's. This is not ideology, not some progressive social experiment. This is all about US hegemony for the next 500 or so years.
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