This is how the painful retesting process works.   It currently seems like nothing can go right for the market, yet this is what typically happens in the intermediate-term bottoming process playbook.  We have referred to this as the “slop, pop, and drop,” where the markets: (1) make an initial low highlighted by an extreme oversold condition with a peak in volatility, (2) then experience a sharp oversold bounce that recoups a significant part of the decline, and (3) ends with a retest of the low that brings demoralization and apathy.  Sure, there are fundamental reasons to put behind it all, but declines from periods of rampant optimism, historically low volatility, and an extreme overbought condition, become more about human nature – and we are in the thick of it.

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