Waiting for a correction… to buy at good prices?

Basically, since the April turbulence, the market has been steadily moving higher, and there hasn’t been a more significant correction up to today.

Looking from May (to skip April volatility), the S&P 500 fell 2.7% at the end of May, then 2.4% in early August, and in the current correction the maximum drawdown is only 1.33%. See Figure 1.

Similarly for the Nasdaq 100: since May we’ve had drawdowns of -2.5%, -1.44%, -2.54%, and the current -1.47%. See Figure 2.

Slightly larger drawdowns in the same period were recorded by the semiconductor manufacturers index (SOX): -5.21%, -2.61%, -4.49%, -5.09%, and the current -0.72%. See Figure 3.

Only when moving to individual stocks there are larger drawdowns… for example, in Oracle’s case the current drawdown is -13.7% — see Figure 4.

China’s Alibaba had a maximum drawdown in early July of as much as -22.5%! But the current drawdown is only -2.57%. See Figure 5.

Tesla in early June: -21.55%. Currently only -0.54%. See Figure 6.

SK Hynix (the Korean producer of memory chips used in AI) max drawdown -18.33%. Current drawdown -6.79%.

Japan’s Tokyo Electron (among other things, equipment for chip production) recorded a maximum drawdown of a record -28.82%, but the current stands at just -5.26%.