Suitably Flip

Okay, Okay, I'm Awake

Well, despite another final-hour tumble, which dragged the Dow below 13,000 for the first time since April, we still have yet to see the recent sell-off earn its upgrade to official "correction" status, though it's now just a rounding error away.

Since the market topped out on July 19th, the Dow has pulled back 8.1%, the Nasdaq Composite 9.6%.  Not pictured (I only have two Y axes to play with) is the S&P 500, which has come down 9.4% since its peak.

Earlier in the session, Wall Street appeared poised for an up day, as this morning's mild retail inflation report seemed to inspire confidence in the increasingly prevailing wisdom that the Fed will cut rates by as much as half a point in its September policy meeting.  But by mid-afternoon, the credit boogieman was back on the brain and fretful selling resumed.

If you're panicking, quit it.  We may have a ways yet to fall (though if I had to guess, I'd guess we've seen the bulk of it, so long as there are no gargantuan, truly destabilizing credit market surprises yet to emerge), but we're still up somewhere between 15% and 25% over the last twelve months, even after having pulled back 8-10% in the last few weeks.  If we shed another few percent as we plow through this historically weakest part of the trading year and wring our hands awaiting the Fed's next policy statement, not only will it still fail to constitute a significant market downturn, but it should offer some unusually compelling bargain hunting opportunities for less flappable investors.

Previously:  Wake Me In Another Few Hundred Points

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Okay, Okay, I'm Awake

Well, despite another final-hour tumble, which dragged the Dow below 13,000 for the first time since April, we still have yet to see the recent sell-off earn its upgrade to official "correction" status, though it's now just a rounding error away.

Since the market topped out on July 19th, the Dow has pulled back 8.1%, the Nasdaq Composite 9.6%.  Not pictured (I only have two Y axes to play with) is the S&P 500, which has come down 9.4% since its peak.

Earlier in the session, Wall Street appeared poised for an up day, as this morning's mild retail inflation report seemed to inspire confidence in the increasingly prevailing wisdom that the Fed will cut rates by as much as half a point in its September policy meeting.  But by mid-afternoon, the credit boogieman was back on the brain and fretful selling resumed.

If you're panicking, quit it.  We may have a ways yet to fall (though if I had to guess, I'd guess we've seen the bulk of it, so long as there are no gargantuan, truly destabilizing credit market surprises yet to emerge), but we're still up somewhere between 15% and 25% over the last twelve months, even after having pulled back 8-10% in the last few weeks.  If we shed another few percent as we plow through this historically weakest part of the trading year and wring our hands awaiting the Fed's next policy statement, not only will it still fail to constitute a significant market downturn, but it should offer some unusually compelling bargain hunting opportunities for less flappable investors.

Previously:  Wake Me In Another Few Hundred Points