Will the S&P Slip into a Bear Market?
Stocks continue to fall this week. The Dow and S&P fell over 1% again yesterday, continuing Friday’s big sell-off. Just as we hinted regarding gold…there’s no “new news,” just continued debt and leverage crises around the world. The S&P opened down this morning about 0.2%
Thus, the S&P is now over 13% off its April highs – well into correction territory and marching toward another bear market.
We’ll be watching the S&P extra close around 1,035 (it’s at 1,050 now). That level would mark a 15% fall from its highs. Recent S&P research declared that since 1946, 80% of the time the index has fallen 15%, its gone on to a technical bear market – a drop of 20% or more.
In short, if the S&P falls over 15%, there’s a high probability it will fall much further.