Momentum Monday – The Selloff and Degeneracy Accelerate…Here Comes The Fear

Howard Lindzon Howie Town

13 hours ago

6 MIN READ

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Good afternoon/evening…

The plan was to get you a Momentum Monday newsletter early am (we shared a video with our thoughts and ideas as always if you scroll down and are subscribed on YouTube or Stocktwits), but the futures were up as was oil and that made no sense to me so I decided to sit on my hands all day and just watch the markets as I worked. I had no urge to buy anything. I am selling m

I don’t like/trust the slow motion crash right now. The selloff feels too orderly…

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The acceleration in selling spread to the semiconductor leaders today, but it won’t get Warren Buffett and his $400 billion excited. The US market resiliency since 2009 has likely created a false sense of security…

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Maybe Trump realizes that his ‘truths’ are not going to help prop up the markets and the long grind of war is a reality. I read (on the internet so it might not be true) that the average war is 3 years, so color me a skeptic for thinking this Middle East war resolves iiself quickly. Everyone is offering their ‘expert’ opinion on the Middle East and nobody’s opinion in the history of Middle East as been right. Extremists are crazy. Now they have drones, the Clause Code of chaos.

For markets to calm down we need MUCH lower oil prices and for the Middle East to be a place you can travel to, through and over. So rallies we will get, but I am not sure we get much more until there is more clarity.

As for other worries…it sure feels off the way the market is treating the acceleration of ‘bad’ degeneracy and the acceleration of ‘deglobalization’. I am all for the degenerate economy because humans across the globe like to ‘bet’, speculate and invest. Even Fred Flinstone had a gambling problem. My concerns last year and especially in late January were that the venture capitalists and Wall Street were providing endless supply for investors stupidity. From late January….

I call this phase of the degeneracy cycle ‘endless liquidity for your stupidity’. There is just too much supply of bets, options and products. The ‘stupid’ people are in abundance for now. The degenerate economy will not fade away but the poster children for degeneracy, Bitcoin, Robinhood, Coinbase, Uber, Doordash and Affirm ( $HOOD ( ▲ 1.05% ) $COIN ( ▲ 0.86% ) $AFRM ( ▲ 3.67% ) $DASH ( ▲ 1.93% ) )that have had nothing but good news and ‘growthy’ announcements and attention, only to see values drop 30 to 40 percent from their highs.

For the deglobalization trend, there is an opposite problem…not enough supply of companies and products to satiate the demand from investors that have figured this out. So, prices are spiking. You see it in gold, silver, european defense stocks, uranium, nuclear companies and oil stocks. Lewis believes this will soon spread to oil prices (the commodity), steel and other strategic supply chain areas as people and countries react to the deglobalization trend/theme. I will have him on the podcast again soon.

Robinhood and Coinbase are down another 20-30 percent since and the supply keeps coming. Kalshi just raised a fresh $ 1 billion on a $22 billion valuation and the landscape of prediction/betting companies continues to explode.

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Over on Stocktwits.com… the fear is accelerating. In early March the bullishness tilted to fear (steep crossover from green to red). Now that fear is spreading fast as the market drop accelerates.

We need this fear to create a bottom. The timing is not something I care to speculate on at the moment.

Enjoy your evening and the show is below…

Welcome back to Momentum Monday!

In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:

Market Overview and panic Selling
Commodity Strength: Energy and Chemicals
Geopolitical Impact and Troop Speculation
Sentiment Analysis: StockTwits Fear Levels
Tech Indices and Support Levels
Valuation Debates: $NVDA ( ▼ 1.4% ) and $HOOD ( ▼ 1.3% )

In This Episode, We Cover:

Market Overview and panic Selling (0:02)
Commodity Strength: Energy and Chemicals (2:00)
Geopolitical Impact and Troop Speculation (4:22)
Sentiment Analysis: StockTwits Fear Levels (5:33)
Tech Indices and Support Levels (8:21)
Valuation Debates: $NVDA ( ▼ 1.4% ) and $HOOD ( ▼ 1.3% ) (11:23)

Here are Ivanhoff’s thoughts:

The selling has accelerated. SPY is now below its volume-weighted average price since its April 2025 lows during the tariff war correction. We are in the midst of a different war now with even more serious consequences for the entire world – a potential energy crisis and stagflation. The next potential support for SPY is around 610.

It is rare to see the market panic and sell everything. Those periods typically don’t last long and are a precursor to bottoming. The major stock indexes around the world are already down 10-20% from their recent highs. Last week, we finally saw some elements of panic selling as even the last remaining momentum leaders started to crack. This is actually positive for the future prospects of the market. The sooner a potential crisis is priced in, the sooner the market will be able to see through the chaos and quickly determine the potential winners. Look at the price action in ZM, for example, during the Covid selloff in 2020. Back then, SPY went down 35% in less than two months. During that time, ZM made a new all-time high and gained 5x in the following seven months. There will always be winners and losers, and the market does a good job highlighting them.

Take, for example, the current crisis. The energy sector is having one of the best years in its history so far. So many, otherwise slowly moving and boring, oil and gas stocks have been making new all-time highs on a weekly basis. Many of the chemical-related stocks are also pushing to new highs as they benefit from shortages – MEOH, CF, DOW, CC, etc. The solar stock SEDG is also gaining notable relative strength – the longer this energy crisis lasts, the more people and countries invest in solar and nuclear. Obviously, when the market smells a potential end to this war, many of these stocks are going to take a serious haircut.

It is good to keep in mind that regulators have the same playbook for every serious crisis – they throw a lot of liquidity into the system. When that happens again, gold, crypto, and many stocks are likely to have their time of day again. Until then, it is important to protect capital, confidence, and stay in good trading shape.