Don't panic!

This was the note I sent to my Family before opening this morning.

Even though I was sure a snap back rally could start any moment, I didn't expect such a huge turnaround today: S&P crashed by 140 points at its worst during the day but ended with a 12 points gain!

Unbelieve but also showed how the market is often doing during an extreme panic!! My portfolio got killed by nearly 20% at the intraday worst point to end up with 20% gain. 

I shared a few trades with my Family today betting for an oversold rally and this TQQQ did the best for me just within hours:

I'm also betting on a fast fading of VIX for now. So far so good😇

Of course, it is too early to be too happy as you never know what the market will do these days. Having said that today is the first day in the past week or so that the market didn't sell off towards closing but rather jumping high. At least this is a good bullish sign, suggesting a true turnaround may be coming!

Here is the note from a friend: 

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There's panic in the air, and blood in the streets.

Financial assets are getting crushed…

The S&P 500 is down more than 8% so far in 2022. Treasury bonds are down 3%. Bitcoin has lost 21%. And, Cathie Wood's ARK Innovation Fund (ARKK) – the most widely touted ETF of the past two years – has given up all of its gains from 2021 and half the gains from 2020…

Folks are bearish.

Last week, the American Association of Individual Investors (AAII) reported that the percentage of survey respondents looking for a rally in stocks over the next six months was just 21%.

Those looking for a decline topped at 46%. That's the lowest percentage of bulls, and the highest percentage of bears in 18 months.

That means we're probably not too far away from the start of a rally.

Investor sentiment is a contrary indicator. When everyone else is bullish, it's usually a good time to be cautious. And, often the best time to put money to work is when everyone else is bearish.

Nobody was "buying the dip." Most folks were buying puts and betting on even more downside in the days ahead.

Of course, anything can happen. Maybe those put buyers will be right, and the financial markets will continue to get crushed this week.

But, the stock market typically does not reward popular trade.