Onto the second act: stock market quarter in review

With just a week left in the quarter we need to start preparing for Q2 and Q3.

In mid January, entering MLK weekend, when everyone was getting very excited about a bullish engulfing on the weekly and how great it was going to be and how we were going to 7,000 immediately and how the Trump trade was clearly long the megacaps and chill I wrote the below bearish note. Proclaiming that the megacaps were ready for a bad down turn, calling out Tesla as a huge underperformer specifically. Apple to 215. Nvidia being weak (even prior to Deepseek crash) and how the AI trade at least domestically clearly felt done.

Its clear now in hindsight that the megas were over owned and at risk of a dumping. The question is now, what happens next? Are they cheap enough to buy? What is on sale in this ‘bear’ market. More on those quotes in a second. And how should we hedge for any potential mistakes. Market pullbacks by their very nature have to be quick, as human psychology works against long term crashes without accompanying economic damage, only allowing valuation to cause a greater than 20% market pullback twice in the last 90 years. With the year to date heat map looking like this, let’s talk about what the next few weeks of market mayhem might look like.