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March 2022 Monthly Outlook - 'THE' Bottom or 'A' Bottom

March 01, 2022

I need to start this report out with applause for the people of Ukraine.  In the face of overwhelming odds, they are doing the biblical David proud in facing their Goliath. 

The world has really rallied around Ukraine in their fight for their freedom and democracy overall.  Our prayers are with everyone in Ukraine and everyone who has family and friends in that region of the world.

As for how the Ukrainian invasion affects the US economy and financial markets, I expect the impact to be relatively minimal since both Russia and Ukraine together account for just about 2% of global market-based GDP (gross domestic product).  There could be some spillover effects in the commodities markets as Russia produces 11% and 17% of global oil and gas, and Ukraine is a major producer of  raw materials (iron, steel, mining products, agricultural products).  Most of those go into the European Union, but any interruption will lead to higher prices for those commodities globally.

The situation in Ukraine creates uncertainty, which the financial markets really do not like.  Volatility reached extremes on Thursday 2/24, when the invasion began.  Regardless of the ultimate outcome in Ukraine, the trends that were in place prior to the invasion, specifically the tightening of financial conditions and concerns about inflation in the US, remain in place.  These trends are headwinds for the financial markets.

This week will be instructive about those issues as Federal Reserve Chairman Powell will be reporting to Congress on Wednesday and Thursday and the February jobs report comes out on Friday.

Overall, I believe we are in a downtrend that is likely not over yet. See the chart below.  Notice how over the last year, each time stocks pulled back they bounced back up off of an upward sloping trend line.  Even when stocks dipped below that trend line in October 2021, they quickly rebounded back up and through the trend line. 

That strength in stocks changed dramatically in January, when not only did the S&P 500 not bounce off the trend line, it continued to fall and the trend line itself is now sloping downward.  Also notice how when stocks tried to rebound in early February they topped out at the red line 2 times –  well below the previous trend line.

So the question is, was the low of 4,115 the S&P 500 hit on February 24th  “THE” bottom or was it “A” bottom?

While we have seen big bounces off the lows in January and February, there hasn’t been enough buying to push the market back above the trend line.  This leads me to believe these bounces are just oversold bounces in market trending bearishly and the February 24th was just “A” bottom on the way to getting to a level that will ultimately be “THE” bottom.

Recognizing the market will do what it wants to do, we have been investing small portions of the cash we raised back in early January on the days when the market takes big dips. We will wait until we are reasonably confident the downtrend is ending before jumping back in fully.

"There is nothing more painfully bullish than a bear market rally." David Keller, CMT

We hope you find this outlook informative.  Please feel free to share it.


Best regards,



March Calendar of Events   (comments and additions for future months are always welcome)

March is Women’s History Month.  Please says thanks to all the important women in your life.

March 8th                       International Women’s Day

March 13th                    Daylight Savings begins – Spring forward

March 17th                    St Patrick’s Day

March 20th                    Spring begins in US 


Sources:  David Keller. CMT,,



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