Huge downside day for US markets today with the Nasdaq falling as much as -4.9% and the S&P 500 declining -2.7% overall.
My Base Case for this pullback has been a -10% correction since the S&P 500 was -2% off highs. We are basically there now with the SPX down -8.7% and reaching -9.5% at today’s lows. The Nasdaq is down -13.5%.
However, it is hard for me to call a bottom here without capitulation or really any signs of panic. Yes, sentiment is low (but I talked about why that is not an accurate indicator of extreme fear/panic for me).
Let’s take a trip down memory lane to the 2022 Bear Market Bottom.
This is what capitulation looks like.
Heavy selling.