7 Chart Analysis of Market Woes, S&P 500 Sets 2 Day Record
Investors have been caught blinded by the market this week after seeing critical support levels all but crumble beneath the markets own weight. The last two days of consecutive distribution have resulted in over 10% market wide losses and a two day record loss for the S&P 500.
The last two days of damage for the three major indices as of the close today ends up as such:
- S&P 500 two day return = -12.42%
- NASDAQ two day return = -11.27%
- Dow Jones two day return = -10.36%
Charts Below (Click Chart For Full View):
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The S&P 500 has seen the worst losses due to its focus in financial stocks. Bears holding the Ultra Short Financials ETF (SKF) though are feeling pretty good with its close at a record $262.45. Also the Ultra Short S&P 500 ETF (SDS) closed at a record $127.97 today.
What makes today’s collapse even more significant is the fact that the S&P 500 has officially closed below the lows of the 2002 bear market. Both the NASDAQ and Dow Jones remain above their respective 2002 lows. To show this we have monthly charts of all three indices:
- S&P 500 Monthly January 1996 – Nov 2008
- NASDAQ Monthly January 1996 – Nov 2008
- Dow Jones Monthly January 1996 – Nov 2008
Charts Below (Click Chart For Full View):
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And if moving ever closer to (or in the S&P 500’s case surpassing) the 2002 bear market multi year lows, there is a two day record to be recognized. With the S&P 500 closing down 12.42% in two days history must take investors all the way back to 1987 to see this broken, or 21 years ago.
In the middle of October 1987 all three market indices plummeted. The S&P 500 went from 298 to 226 in two days which was a loss of 24%. Let’s hope this record remains intact.
Click to View Full Chart of the 1987 Crash
Where we go from here is anyone’s guess. Very few investors imagined the market would ever be where it is right now. The losses thus far from market peak in 2007 to today now stand as such: the S&P 500 is down -52%, the NASDAQ is down -54%, and the Dow Jones is down -47%.
We can’t help but wonder if any investors are betting that the next great depression is in our country’s future. Compare the current crash with the 1930s crash and see what you think.
