“Capitulation,” that’s what I heard a lot today. “Stocks have hit bottom,” was next.
Last time there was a real case of “capitulation” was in March 2009 when the SP 500 had been cut nearly in half. Today, the market is just a tad shy of it. But it was a chaotic day of alternating panic selling, forced selling, and panic dip-buying. And the dip buyers got their fingers burned.
The SP 500 plunged 5.3% at the open, and soon the dip buyers where all over it. By early afternoon it looked like they might push it into the green when the bottom fell out again. It closed down 3.94% for the day, 8.0% for the year, and 11.5% off its peak in May. So it’s finally and officially in a “correction” – defined as down 10% or more – for the first time since 2011, at least for a day.
The Dow had one heck of a ride from being down 1,000 points at the open to shooting up 500 points in minutes, working back toward the green before losing its grip. It ended the day down 3.6%, at 15,871. November 2013 was the first time it had hit that level. So folks