It’s officially a bear market, as major indices dive another 5% BY ANNE SRADERS March 11, 2020 1:10 PM EST Both the Dow Jones Industrial Average and the S&P 500 dipped into bear markets on March 11, 2020.ANDREW KELLY—REUTERS Investors can't catch a break. On Wednesday, the Dow closed in a bear market, down over 5% (and down 20% from its intraday high last month), while the S&P 500 closed down nearly 5%. At midweek, markets have been on an exhaustingly volatile path, as major indexes plummeted over 7% on Monday, recovered up around 5% on Tuesday, and down about 5% on Wednesday. Markets are like "a chicken with its head cut off," said Harris Financial's Jamie Cox. "We’ve never seen [the Dow] go from an all-time high to a bear market this fast" since the index's inception in 1896, notes LPL Financial's Ryan Detrick. (A bear market is defined as a 20% drop from a recent high.) Right now, "The market has no barometer, it has no wind vane because there are so many mixed signals," Cox tellsFortune. It's those mixed signals that are pummeling portfolios this week. Markets have been oversold many times in the past few weeks, and volatility(often measured by the Cboe Volatility Index, or the VIX index, which tracks fear on the Street) is running rampant, with the VIX in the upper 40s and 50s (indicating high volatility for the near-term). Even a Fed rate cut (and the potential for another next week) hasn't stopped the market from its long plunge lower. Now, analysts are saying that fiscal stimulus is "probably going to be needed to help us stem this sell-off," LPL Financial's Detrick tellsFortune. As analysts watch markets fall, those like Detrick remark what "a screeching halt our economy is going to come to in the second quarter—literally almost every hour, it looks like things are getting worse," he says. Harris Financial's Cox cites the lack of fiscal measures and spotty coronavirus testing as "bad decisions" that "we’re sort of fighting through ... at a time when it was already going to be difficult for markets," Cox says. "The basic debate regarding the path of U.S. equities in 2020 involves whether COVID-2019 will lead to a proverbial 'V-shaped' or 'U-shaped' downturn," analysts at Goldman Sachs wrote on Wednesday. But even as debate ensues, Goldman estimates the S&P 500 will end the year at 3,200 points (compared to the roughly 2,740 points it closed on Wednesday). That 3,200 point-mark for the S&P 500 makes sense to Cox, "As the shock occurred and shut everything down, the resurgence of turning everything on is going to have a classic V-shape, so we’re on the downswing right now." LPL Financial's Detrick also sees "drastically weak" economic data for the 2nd quarter, but expects a bounce in the second half of the year and isn't willing to cry recession yet for 2020. Although we've entered a bear market in at least two indexes, Harris Financial's Cox maintains the message is still clear for investors: "Selling your stocks now may be the most expensive investing mistake of your career." https://fortune.com/2020/03/11/stock-market-coronavirus-bear-market-official-dow-jones-sp-500/
And everyone thought that since it was "an election year" that markets were guaranteed to be up....fuxking fools!!!
You can only say that now as being a good short candidate if it gets back up there but so much technical breaks have been done that there are not going to be new highs for at least 2 years or more. I'm leaning on many years before this market is back, so many retirees are now reminiscing of 2008-2009. They will never ever be back in this market after what just happened and that's a fact. They wont care one way or another about stocks after with collapse. Just 3weeks ago markets made new highs, now in comple bear mode. Nope they aren't coming back and new highs are years away...
I'm leaving open the possibility. 1. There is usually "one bigger dip before the final high"... though this decline seems too large to be identified as that. 2. The big bottoms trend line since 2009, is still intact. 3. Assuming the 12/2018 low to be the start of a 5th wave, it doesn't look complete without one more push up. How do we get that? Maybe some good news on the virus plus Fed pumping? I dunno. Of course the 5th wave can be truncated rather than run to exhaustion... as may be the case this time... but that kind of thing is more likely to happen on the downside. Not pounding the table for this, of course.
The Shanghai composite recovered nicely after their coronavirus panic. They're back to nearly early January highs.