Stocks are down ferociously at midday today, with the S&P 500 Index down 3.8%, the Dow Industrial Average down 2.7% and the Nasdaq Composite down 4.5%. This follows a large-scale and widespread and relentless selloff that for the Dow and the S&P 500 started on the second trading day in January; and for the Nasdaq in November. By this morning, the Nasdaq was down nearly 20% from its intraday high in November.
By Friday at the close, the S&P 500 Index had dropped through the 200-day moving average, and combined with a huge mega-boom of the type stocks had experienced after March 2020, is not a common occurrence, and in the past has been followed by serious selloffs and crashes. By this morning, after the steep losses, the S&P 500 Index was down 12% from its high. This all came in the span of three weeks, with each week having been a loser.
The Nasdaq and the Russell 2000 fell into the negative for the 12-month period, having surrendered all of their gains plus some that they’d obtained over the prior 11 months (gray line). The Dow is still up 10.7% (brown) and the S&P 500 is up 12.8% (purple) for the 12-month period, having surrendered in three weeks about half of their huge gains of the prior 11 months (index data via YCharts):Stocks Better Bounce Soon or Else I’ll Have to Revise the WOLF STREET Dictum, “Nothing Goes to Heck in a Straight Line” | Wolf Street