A bullish sign: extreme negativity; DWAC: SEC Approval Unlikely for Trump Media Merger Deal; Wall Street A-Listers Fled to Florida. Many Now Eye a Return; My prediction about the omicron peak was exactly right

1) Following up on Friday's thoughts on the market pullback, the negativity out there has reached very high levels, which is usually a bullish sign. (As a reminder, I'll be going on camera with my colleagues Enrique Abeyta, Berna Barshay, and Herb Greenberg tomorrow at 8 p.m. Eastern time to talk more in-depth about our outlook for 2022 – make sure to register to attend this free event here.)

My friend Doug Kass of Seabreeze Partners sent around some interesting charts yesterday, which have him venturing back into the market...

The Nasdaq is off to the worst start to a year in its history – and that includes the dot-com bust and The Great Recession of 2008-09:

2022: -13.1%
2008: -11.5%
2016: -10.7%
2009: -8.6%
1996: -5.1%

The Nasdaq correction is over 17.5%, the fourth-worst correction since The Great Financial Crisis. At 65 days, it's already longer than the average post-Great Financial Crisis correction of 53 days:

... The number of Nasdaq Index issues down by more than 50% from their 52-week highs has risen to 42%. Since the 2008 financial crisis, only March 12-April 8, 2020 saw more Nasdaq stocks cut in half:

Small growth stocks (measured by the iShares Russell 2000 Growth ETF, IWO) have declined by an astonishing 17% in the last 13 trading days, far more than the iShares S&P 500 Value ETF (IVE):

... The Hulbert Sentiment Index is at the most bearish reading since March 2020:

I think Doug is right that we're approaching a bottom, especially now that the pandemic is receding (see below), so it's time to start buying your favorite stocks...

2) But there are still plenty of stinkers that should be avoided, such as my Dirty Dozen...

Here's a spot-on Seeking Alpha article by Phillip Braun, a professor of finance at Northwestern's Kellogg School of Management, on one of the worst stocks I've ever seen in my career: DWAC: SEC Approval Unlikely for Trump Media Merger Deal. Excerpt:

• The SEC is investigating the merger deal between Trump Media and Technology Group and the Digital World Acquisition Corp. SPAC.
• It has been reported that DWAC and Trump Media had merger talks prior to DWAC's IPO, which is illegal.
• The anecdotal evidence indicates to me that the SEC will most likely reject the merger deal.
• If you are not already invested in DWAC or DWACW, stay away. If you are invested, sell.

3) Following up on Thursday's e-mail, in which I wrote that New York is the greatest city in the world, this Bloomberg article rebuts the nonsense that everyone here is fleeing to Florida: Wall Street A-Listers Fled to Florida. Many Now Eye a Return. Excerpt:

The reality is more nuanced – much more.

Only a small percentage of Manhattanites moved permanently to Florida last year. And as vaccinations stir fresh hope that the pandemic's end is near, ebullient talk of South Florida drawing Wall Streeters en masse is already beginning to fizzle.

Dan Sundheim, founder of New York-based hedge fund D1 Capital Partners, will very likely leave Palm Beach and return to his Park Avenue home, according to a person familiar with his plans. David Tepper, who moved back to New Jersey from Miami last year, is staying in his home state for now, even though he and wife just bought a $73 million Palm Beach mansion.

"The main problem with moving to Florida is that you have to live in Florida," said Jason Mudrick, who oversees $3 billion at Mudrick Capital Management and has resided in Manhattan for more than two decades.

"New York has the smartest, most driven people, the best culture, the best restaurants and the best theaters," he said. "Anyone moving to Florida to save a little money loses out on all of that."

4) I continue to closely follow the pandemic and send updates to my coronavirus e-mail list roughly once a week (to join it, simply send a blank e-mail to: cv-subscribe@mailer.kasecapital.com). Here is the lead item in the e-mail I sent last night, which has important – and highly positive – implications for our economy and the stock market...

Nearly a month ago, in my December 30 e-mail on Predictions for 2022, I wrote:

I think the omicron variant will prove to be the end of the pandemic, as I wrote in last Wednesday's daily: I have increasing confidence that the pandemic will soon be over:

Based on eight more days of data since my December 14 e-mail entitled, Will the pandemic soon be over?, I have a higher degree of confidence (perhaps 70%, up from 50%) that my theory is correct that "the omicron variant, rather than being a global nightmare, may actually soon lead to the end of the pandemic, morphs into something akin to the seasonal flu in the next month or two."

That said, the huge omicron-driven surge of cases that's already happening in the Northeast, Puerto Rico, Ohio, Illinois, Hawaii, Wisconsin, and Florida is going to spread across the U.S. in the next few weeks – breaking all prior records – which is going to freak everyone out. But then cases will peak, likely in mid-January, and hospitalizations will remain under control, thus transforming the pandemic to an endemic.

Sure enough, on January 14 cases peaked at just over 800,000, more than triple the previous record, and are now plunging rapidly, as you can see in this chart (source):

In the rest of my e-mail, which is posted here, I discuss the following topics:

• Two CDC reports on the benefit of both vaccines and prior immunity
• South Africa and Australia show the benefits of both types of protection
• Study on the duration of protection
• Israel study on fourth doses
• South African scientist thinks she may have solved the mystery of long COVID-19
• Empty NYC testing sites
• Dr. Katelyn Jetelina reports
• Karma
• Novak Djokovic
• Articles 

Best regards,

Whitney

P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.