Contrary to the common belief that the equity market correction started in February, the downturn actually originated last fall. It was driven by tightening financial liquidity, which first impacted the most speculative assets like cryptocurrencies and high-growth stocks.
A simple yet effective technical indicator for market direction is the year-over-year price comparison. A sharp decline in the prior year suggests the current market will likely struggle to find support for a similar period, providing a rough timeline for a potential bottom.
A key sign of a market bottom is when the sell-off expands beyond speculative assets and significantly impacts the 'best stocks' and major indices. This final phase of capitulation is often triggered by a major external shock, like a war, indicating the correction is nearly complete.