Stocks Are Tumbling Again One Day After Getting Crushed. What History Says Happens Next. By Ben Levisohn Updated Feb. 25, 2020 12:20 pm ET / Original Feb. 25, 2020 12:13 pm ET Order Reprints Print Article Text size Spencer Platt/Getty Images 11:23 a.m.Ifthe rules of gravityapplied to the market, Monday’s big drop should lead to a nice bounce. Unfortunately, theS&P500 is nota rubber balland the rules of physics do not apply to stocks. Afterfalling 3.4% on Monday, the S&P 500 has dropped 1% to 3192.21. while theDow Jones Industrial Averagehas slumped 358.19 points, or 1.3% to 27,602.61, after tumbling 1031.61 points, or 3.6%. There are no new headlines about coronavirus, mind you. Just the usualdribs and drabs of goodandbad news. Instead, investors seems to be adding to the new reality that the disease is going nowhere—and might not be reflected in the market just yet.So much for the next-day bounce. S&P 500 IndexSource: FactSet Feb. 21noonFeb. 24noonFeb. 25noon315032003250330033503400 Curious as to what happens when the S&P 500 follows up a 3%-plus drop with another loss, we pulled the data from the last 20 years to see what returns were like over the next 60 trading days, or roughly three months. On the surface, the results aren’t bad. The S&P 500 followed a 3% drop with another decline 27 times during the past 20 year, and the index was higher two-thirds of the time 61 days later with an average gain of 4.2%. Not too shabby. However, nine total occurrences came during the 2008, and the S&P 500 fell over the next 60 days following seven of them. Wedon’t think we’re looking at another financial crisis, which makes us feel a bit better about what comes next, but only a bit. Six more occurred in 2001 and 2002, near what turned out to be the bottom of a brutal bear market following the internet bubble. While we may be staring at another tech bubble, we definitely are not at the end of a bear market. That leaves the final 11, all of which have occurred since the end of 2019—and all but two resulted in gains three months out. The worst loss was just a 5.6%. If we’re lucky, history will repeat itself. If not, watch out. Write toBen Levisohn atBen.Levisohn@barrons.com
%% Looks like SPY, QQQ going up again+ above 200dma/bull market; DAL sector mostly down............................................................................... B, But DAL is dumb enough to waste money on carbon credits
%% IWM+ DIA are already closed down below 200dma, LOL. Im still bullish on SPY+ QQQ; not DAL sector,its below 200dma also........................................................................ NOT a prediction ;about 77.7 minutes 'til close. DAL ,CeO admitted he's buying a billion bucks in carbon credits; market hates that , looks like.