When is it safe to start buying stocks again? We're not there yet, but these are the six signs to look for

Big stock market drawdowns like the current one often end with a selling frenzy, called capitulation.

“We have evidence of some capitulation, but probably not enough to call it a significant bottom,” says Doll.Investors buy put options when they’re bearish. They buy calls on a bet that stocks will rise. So, the overall put/call ratio tells you how scared investors are. Higher means more fear. Leuthold Group chief investment officer Doug Ramsey calls this his “desert island sentiment indicator.”

Look for a spike in the number of stocks getting trashed Verdict: The low is in — tradable bounce ahead. The upshot: “There’s a 95% chance we have seen capitulation for a tradeable bounce,” concludes McDonald. It could create a 20%-30% upside move.He cites two reasons. First, most investors are down a lot, and they just want their money back.Next, the Federal Reserve is going to “break something” with its aggressive rate hikes. Likely candidate: Something in the commercial real estate market.

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12 stocks to consider for the next leg of the bull marketOPINION: We don’t know when a new bull market will begin, but it’s not too early to start building your buy list when it rallys again, columnist Mark Hulbert writes. *rallies 🤔 But I like playing everything is red. We do know. When the Fed starts easing again. How hard is it to follow Rule Number One: Don't fight the Fed?
Source: MarketWatch - 🏆 3. / 97 Read more »