Clearly, the market has not reached an oversold level enough to bring in the buyers. As we wrote last Friday, the bottoming process can feel really awful, and this one – like every real correction – does. The hardest thing to do when prices appear to be collapsing, is to step back and believe the fundamental backdrop points to higher prices. Remember, corrections only feel healthy – before you are in one. If you remember in September, the atmosphere was the opposite of today…the market had reached an extreme overbought, the VIX was meandering around 12, and the majority of newsletter writers polled by Investors Intelligence were bullish. As we said yesterday, the market is at a level of oversold that generally surrounds a bottom, and while not perfect at pinpointing the low, our indicators suggests a bounce should be near.
Past performance is not a guarantee of future results. Index returns are unmanaged and do not reflect the deduction of fees and expenses. All data points are sourced from Bloomberg as of 10/24/18 unless noted otherwise.
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