The Bear-Market Rally in Stocks, Bonds, Mortgages Wiped Out: Why This Nails the Parallel to the Dotcom Bust | Wolf Street

The Nasdaq closed about 2% above its June low. During the two-month rally, it had soared by 23%. Many of my Imploded Stocks that are now trading for a few bucks, had shot up by 50% or more, and a bunch of them doubled, before re-imploding after mid-August.

The bear-market rally happened even as the Fed had already embarked on the most aggressive tightening cycle in decades, and had started quantitative tightening, meaning shedding Treasury securities and mortgage-backed securities.

Many of us in our illustrious comments on Wolf Street had been expecting a rally. And I drew parallels to the bear-market rally during the dotcom bust. During that rally, which lasted less than two months, from May 27 through July 17, 2000, the Nasdaq jumped by 33% without ever getting back to its old high. Ultimately, the Nasdaq collapsed by 78%.

The Bear-Market Rally in Stocks, Bonds, Mortgages Wiped Out: Why This Nails the Parallel to the Dotcom Bust | Wolf Street