The market has been caught in a quiet correction for nearly two months, its once-hot sectors now well chilled and investor ebullience coming off the boil. The question now is how it ends – with a whimper or a bang.
Since the Standard & Poor's 500 all-time intraday high of 2,400 on March 1 – the day after President Donald Trump made his crowd-comforting speech to Congress – the index is off only about 2 percent, and at its late-March low was down a modest 3.2 percent.
Yet by last week, nearly half of all stocks in the broad S&P 1500 were down at least 10 percent from their 52-week high, the popular bank sector remains down that much and economically attuned groups such as transportation and steel have lagged badly.
The market's behaved like a football team that keeps
Since around the time of the market high, the 10-year Treasury yield has ebbed to 2.2 percent from 2.6 percent, the CBOE S&P 500 Volatility Index (VIX) has climbed into the mid-teens from around 11 and the Atlanta Fed's GDPNow forecast model for first-quarter growth has tumbled to 0.5 percent from 2.5 percent. Investor attitudes have also run from excessive bullishness to a
This subtle but noteworthy change in market character means we're again at a point where market handicappers are asking whether the market's internal weakness has been dramatic enough, with enough "oversold" conditions popping up, to set up a strong rebound. So far, according to close students of tactical market clues, the answer is "Close, but not quite."