Today the S&P 500 officially went into a technical correction and broke below its 200 day moving average.
- Volatility on the VIX was above 36
- 10 Yr Treasury sunk to an all time new low of below 1.25%
Wall Street is in total freefall. How bad can it get? I don’t know, Bitcoin soared irrationally to over $19,000. In a frenzy, anything can happen.
Watching the markets I feel much like I did when I was once coerced into watching the movie World War Z. That was a painful 2 hours of nonstop zombie stupidity. Unfortunately the carnage in the markets will last much longer.
But I remain cynically optimistic, I encourage buying the dip as long as the economy isn’t headed for a long secular recession- I still think a recession is unlikely.
Today’s prices are about back to where they were in October 2019, when the Boogiemen were tariffs, recession and repo rates. How’d that work out? Just fine, you probably don’t even remember last year’s boogiemen. I suspect 6 months from now that things will be just fine too.
One thing that I find particularly interesting is how well Chinese Tech stocks are holding up. The CQQQ bottomed over COVID-19 fears on January 31, 2020. Since then, it’s been outperforming the S&P 500. I wonder who’s right. Will China retest those old lows or will the USA soon reach a bottom?
Just like World War Z, it’s painful to watch…so enjoy some popcorn while the world burns.