Friends
It was another case of basically sell everything today. Stocks were down, commodities were down (including oil and gold), crypto currencies were down. Only bonds rallied a little (yields down). Even this year’s winner the energy sector was down more than 8% for the day. Nasdaq is now down more than 25% for the year, well into bear market territory, while the S&P 500 is now down more than 16% for the year. Though bonds did rally today, the 20-year Treasury Bond is down more than 20% for the year. Again, I know little about Bitcoin and crypto currencies, but just looking at a graph it appears that Bitcoin is down more than 50% from last year’s highs. Are we setting up for a turnaround Tuesday? Given the indiscriminate type of selling, we might be getting close to another short-term rally, but of course this year’s Great Revaluation is likely to carry on for some time to come.
For the day, by the close the Dow Jones Industrial Average was down 653 points to finish the day at 32,245. The S&P 500 was down 132 points to close at 3,991. The Nasdaq Composite Index was down 521 points to close at 11,623. Gold was down $29 to trade at $1,853 per ounce, while oil was down $7.36 to trade at $102.41 per barrel WTI.
These 90% downside days are showing signs of heavy liquidation and should begin to wear themselves out. We look for signs of capitulation at moments like this and we might be getting there in the short run. Long term investors in the accumulation phase of life- don’t stop your periodic investments. Again, you make your money in a bear market, you just don’t know it at the time. Those of you who are fully allocated and in the distribution stage of your life- stay with the plan. Times like this should be accounted for in your plan. I know this is not pleasant, but we’ve been here before (me, many times) and we will get through this together.
Have a nice evening everyone.
