The meme stock frenzy may now be coming to a close, as those who bought in head for the exits ahead of a declining economy and a dropping market.

25% of single-stock retail positions in the S&P 500, and 50% of single-stock retail positions in the Nasdaq 100 accumulated since Jan 2019 have now been divested, according to Goldman Sachs data. Also, call options volumes have reversed roughly 70% of their gains since the beginning of 2019 to November 2021, when Bitcoin and tech stocks were peaking.

John Marshall, chief of derivatives research at Goldman Sachs noted, “While historically retail investors have bought the dip, this time they haven’t.”

Wall Street had become fascinated with what was called the “boredom market hypothesis,” which supposed many who normally would not have been in the market were trapped home with nothing to do, and focused their energy on the markets. As a result, the market began to be moved by the whims of a group of novices who were only passing through the market, but whose influence was real and tangible in day to day trading. As a result of this flood of new traders, stocks began an impressive rise.

In the process, these traders flooded social media and online forums, feeding each other information and tips. It was from this collective that major events like the Gamestop short squeeze, and AMC Entertainment arose, in the process dealing major blows to big name short sellers who had taken up carefully thought positions opposite those stocks.

Now the market has turned, however, and a recession is on the horizon, leading many of these traders to head for the exits. TD Ameritrade’s retail investor behavior measure shows they have been reducing stock exposure all year.

Eric Johnston, head of equity derivatives and cross asset at Cantor Fitzgerald said, “The way that they’re likely going to be trading going forward is likely selling dips as they try to protect any gains that they may have or reduce further losses. We can no longer count on the individual investor to be a backstop for this market.”

In an April survey of over 1000 of its retail customers, Charles Schwab found that 57% had a bearish outlook on the market for Q2 2022. That was an increase of 29% from the previous year. The primary driver of that sentiment was the higher cost of living, followed by geopolitical issues.

Chris Gaffney, president of world markets at TIAA Bank said, “Consumers are pulling back. We’re seeing most investors sit this out, which is probably smart, sitting out the volatility.”