In our April 16 post, “From Bubble to Bloodbath,” we noted the S&P 500 ($SPX) was already down 10% YTD, after falling nearly 19% from the 2025 peak of 6100 to a closing low of 4982.
This 40-year trading veteran (along with other market observers) called it: a bear market had arrived.
Within two days — after another 2% drop — US equities staged a near-5% rally.
WTF is going on?
For those of us trading since the turn of the century, the answer is partly historical: bear markets have become progressively shorter. Whether during the GFC or the pandemic, the Fed was first blamed for selloffs, then credited for bailouts. Meanwhile, the “Battle of the Transformers” — algorithm-driven trading — fuels rapid selloffs and even faster rebounds. (Anyone remember the Flash Crash of 2010?)
More context:
- Since 2000 through YTD 2025, the S&P 500 has seen 17 years with intrayear drawdowns of 10% or more.
- Only 6 of those years closed lower: 2000, 2001, 2002 (DotCom Bubble), 2008 (GFC), 2018 (Fed tightening crash), and 2022 (Inflation bear).
- 17 of those years ultimately posted positive returns.
- 2025 remains undecided.
Factoid fans, take note:
No prior year has seen Wall Street analysts flip their year-end forecasts so violently — from “up 10%+” to “down 10%” within a three-month window.
Now, 98% of the Street that slashed SPX targets to 5400–5800 will likely flip again — with $SPX just 3%-5% below the “best case” targets pitched by the top 10 banks earlier this year.
Major drawdowns since 2008:
| Year | Max Intrayear Drawdown (%) | Context |
|---|---|---|
| 2008 | -57% | Global Financial Crisis |
| 2009 | -28% | Post-crisis volatility |
| 2010 | -16% | Flash Crash, Eurozone crisis |
| 2011 | -19% | US Debt Ceiling & S&P Downgrade |
| 2018 | -20% | Fed tightening, December crash |
| 2020 | -34% | COVID pandemic crash |
| 2022 | -25% | Fed hikes, inflation bear |
| 2025 | -19.5% | Post-2024 blowoff retrace |
Outcomes:
- 3 ended down: 2008, 2018, 2022
- 3 ended up: 2009, 2010, 2020
- 1 ended flat: 2011
And of course, none of those years featured a sitting US President personally driving market volatility, while simultaneously launching a full-scale trade war.
Now, after a 15%+ rebound from the early April lows, who would be shocked if Wall Street strategists are considering yet another narrative pivot.
That said, we rarely embrace histograms or “past history”, and we discount technical analysts who now want to reference “The Zweig Thrust” (which suggests ‘the technicals’ are pointing to a resurgence in a bullish set up) when visibility is so opaque. Said a different way, as expected, this earnings season is kicking off with a common theme from corporate CEOs and CFOs: “We are holding back guidance and not prepared to provide forward earnings projections simply because the compound effects of the Tariff War, coupled with less than optimistic economic outlooks with respect to a Tariff-induced Recession on the US Economy makes it impossible for us to forecast.” Not exactly inspiring.
Main Street Bulls Trounce Institutional Investors in April.
Notwithstanding an easy to grasp “less than sanguine setup”, according to data from Fidelity and Schwab, retail investors were either large net buyers of stocks throughout the April Showers, while hedge funds and other institutional managers were liquidating long positions. Now that April is proving to be an up month for stocks, and have bounced 15%+ from the Liberation Day lows, the notion that retail investors represent “dumb money” has once again been dispelled.
The fact is, the universe of retail investors has grown 10-fold in recent years, and their access to information, and their ability to decipher a range of data points is on par with nearly any or all of the geniuses working for Wall Street firms. More to the point, the ‘dumb money’ has been trained to deploy funds during ‘panic’ moments, and truth be told, that strategy has worked on a pretty consistent basis.
We don’t know. But it’s fun to observe the streams on X that have arm chair quarterbacks with crystal balls continue to tout and shout. Including a fellow by the name of David Hunter aka DaveHcontrarian who back in January 2023 had predicted a ‘market meltup that would take the $SPX from 4000 to 6000 before June!” Well, $SPX did reach $6000 24 months later (not 6 months later). And every week, since the beginning of 2025, including this week, Hunter insists “$SPX will surpass $7500 within months!” He adds that “once that rally meets my target (certainly before year-end), equity markets across the globe will suffer a 50%-60% crash.” Who doesn’t love financial porn?
Whether the ‘Buy-The-Dip’ philosophy has a shelf life of a more than a few weeks during the current cycle of uncertainty remains to be determined. Anyone who claims to be able to predict what might happen in three months, no less than 3 hours is in need of medication.
Instead, this outlet prefers to embrace insight offered by a select few un-conflicted folks (e.g. former JPM strategist Marko Kolanovic, Neil Azous of Rareview Capital, and FO manager Michael Kramer of Mott Capital who collectively have near-on 100 years experience and each combine macro analysis, true fundamental analysis and a sprinkling of technical indicators to form their short, medium and longer-term views.
Prescient or Piped into the President?
Thomas Peterffy, the 80-year-old billionaire founder of Interactive Brokers, is not just a long-time Trump supporter (vocally and financially); he’s also a fellow Mar-A-Lago member.
Peterffy, who built Timber Hill before launching IBKR, has made a number of prescient market calls over decades. In early April, while SPX was clawing its way off the mat, Peterffy hit the airwaves proclaiming:
“This is the greatest buying opportunity of my entire career!”
This came less than 24 hours before Trump’s surprise announcement — a 90-day pause on new tariffs (“Liberation Day”) — which ignited a 6% SPX rally over six sessions.
Coincidence?
Editor’s Note:
One of us has known Peterffy for over four decades and briefly served as a senior IBKR executive (and crafted their now-famous slogan). No accusation is made that Peterffy was tipped by anyone at Mar-A-Lago. We’ll also refrain from speculating whether Secretary of Commerce Howard Butt Lick might be more prone to… “monetizing information” obtained over Sunday brunch.