The market is plunging again.
And we believe this paragraph from BTIG strategist Dan Greenhaus (@danBTIG) really records the spirit well of exactly what’s going on:
Well, that was enjoyable! After such a long period without 1 % days, the S&P has now had a bunch, including five of the last 7 sessions. That, obviously, is little consolation to customers trying to find added volatility, but we’ll say this once again unequivocally: the tone included in customer conversations has actually moved meaningfully. Exactly what was when a presumed march greater for stock prices is now a (almost) assumed march lower. Sentiment has actually done a 180, and with just 26 % of the S&P and 17 % of the Russell 2000 trading north of the 50 dma, it’s hard to blame people.
It appears like a great time to advise customers of the number of thought “buying the dip” was an excellent strategy the last few quarters/years. That stated, we leave the technicals to Katie Stockton, but the Russell’s chart looks terrible and many customers believe upside catalysts look couple of and far between. Plus, as numerous have explained, the S&P is “just” 4 % off its highs, not a significant correction. Possibly. But it’s always darkest prior to the dawn, and in the middle of the darkness, it deserves remembering that dawn will once again arrive.
One month ago there were actually no bears left. Everybody had flipped bullish, and nobody could think of a good reason for stocks to go down.
And now, individuals cannot think about any ‘upside drivers,’ and everyone thinks the markets are going lower.
What’s interesting is that there’s no obvious change of stories. Sure China is slowing, and the European economy is stomach flopping. But so? How is that news? It’s not. It just becomes news and becomes substantial after the market sells off.