Oops. Stocks fell through a key support on Tuesday and it looks like some recent momentum has now petered out. The new line in the sand for the S&P 500 SPX seems to be 3,900. Whether Santa eventually comes or not is still to be determined, with Mr. Claus perhaps postponing a decision until next Tuesday’s CPI release.
But what’s clear is that the U.S. stock market is still in a bear market. And with that in mind, equity strategists at BNP Paribas mined 100 years of crashes to try to determine what’s next. However, 2002 is quite representative of recessionary crashes. That bear market was more than two years in length, with a drawdown of 50%, and a 29 percentage point peak-to-trough move in the VIX VIX . A typical recession bear market is 1.5 years in length, with a median drawdown of 38% and a median peak in the VIX of 40.5.
In a neat bit of analysis, BNP recreated the VIX VIX , which CBOE introduced in 1993, to cover the last 100 years. Usually, volatility peaks at or before the market trough. The market After Tuesday’s slump, U.S. stock futures ES00 NQ00 edged lower. Oil futures CL.1 fell, and the 10-year yield TMUBMUSD10Y was 3.54%.
Yea let’s take TA levels from market watch 😂😂
Yeah, but Campbell’s soup is up 40% in a year.