Annualizing rips & dips on the market or a particular stock or sector provides little to no useful or predictive value. E.g.- QQQ fell 24% in 2.8 months off the Oct 1st high so that would be an annualized loss of over 100% & obviously, that didn’t mean much but if anything, it shows that from extreme moves in one direction often come extreme moves in the opposite direction. As such, one can take the view that the next move will be a sharp mean reversion to the downside or they can take the other side but I think it would be very hard to image, even in the most optimistic scenario, that the stock market continues to advance at the same rate it has for the past several months.

The technicals were pricing in the Q4 plunge for a quite some time & eventually, they played out. However, right now, the daily charts & even the weekly charts aren’t remoted close to being as bearish as they were back leading into Oct ’18. The expectation for another major leg down is more so based on the bearish developments of the weekly & monthly charts last fall which indicated that the Q4 drop may have likely been just the first leg down in a much larger correction/bear market.

However, I will say that we have seen a high rate of bearish technicals (wedge & trend line breaks following divergent highs, bearish candlestick patterns, etc..) recently & I remember the same time back in Q1 2008.