Yesterday’s drop of nearly 10% in the S&P 500 (SPX) was the biggest one-day drop since the 1987 market crash and had the market down 26.9% from the peak just three weeks ago. It cannot be stated enough this has become a human nature-based event, and the panic low this week should kick off the intermediate-term bottoming process like what took place following the market crashes of 1987 and 2011 (Figures 1 & 2). We believe there are three stages of behavior when the market crashes:

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