IMO, until the public stops looking for a bottom, the markets still have a long runway to maximize pain.
As in all major panics, there are a confluence of events that drive the surge. Then blind-side issues start their confluence of events which purge all of the wild hope and speculation, then the moderately hopeful and, finally the stodgy investors. All get crushed and the common wisdom shifts from FOMO to Never Again!
The current confluence of events causing the beginning of a purge seem to be: Crypto questioning; world-wide pandemic which is seemingly ceaseless in mutations; War in one of the bread-basket areas; resource nationalization; onshoring of manufacturing; high prices of the factors of input leading to higher end user prices; the specter of famine; the reversal of 30-40 years of declining cost of money; polarization both domestically and internationally; the surprise lock down of one of the world’s cheapest manufacturers (China); increasing risk of serious conflict spreading; economic warfare; cyber warfare capabilities that include may diverse targets (infrastructure among them); instant global communication being weaponized; the rising risk of internal conflict due to food scarcity and high fuel costs; decades of low interest rates leading to major malinvestment (the force of damage is yet to be fully recognized); droughts in the major food growing areas not in a state of war; the potential for defaults because of massive debt loads on all levels which were only bearable in low rate environments; decreasing affordability of home ownership as bank rates rise.
I liken the current confluences to mountain State rivulets combining to form white-water rivers. We are, IMO, still in the head-water area and approaching the standing waves and we’re body surfing instead of being in a durable raft.
What other factors will also be added? Will passive investing save the day or will people putting money into 401k plans decide that they cannot keep throwing their money into a declining market, nor can they afford to have any money going into savings because they need every dime to meet the current monthly necessities?
The term paradigm change just doesn’t seem to do justice to either explaining the process nor in predicting how much change will have to occur before the new paradigm is established.