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Heeten Doshi Authored by Heeten Doshi, founder of Doshi Capital Management.

Anyone who is still bearish and calling for more downside is foolish. The selloff is overdone. To point to further declines from here is poor risk management.

With the Nasdaq 100 down 22% and S&P 500 down 13% for the year, the risk-reward is skewed to the upside. This is the worst start for the stock market in 80 years. The first time since going back to 1978 (as far back as I have data for treasuries) that both S&P 500 and Long-term US Treasuries are both down over 10% through the first four months of the year. Stocks did not drop this much even during Volcker's rule when he raised rates from 11.2% to 21.5% from 1979-1981. However, we also didn't have this much stimulus injected into the economy at that time.

Recessions do not happen overnight

Historically, non-recession corrections lead to a roughly 20% decline. We have come close to that mark already. At this point, anyone calling for the market to go lower is calling for an immediate recession and recessions do not happen overnight.

The market is afraid of the Fed hiking until the economy breaks. Even if that happens it is still one or two years away. At this point, the market is not pricing the probability of a recession but the certainty of one.

This is evidenced by the volatility for the S&P 500 as measured by the dai......................

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