Wednesday, October 10, 2018

DJIA down 800 points, but no reason to panic

The Dow30 dropped about 3% today, which is just over 800 points. Seems like a lot in one day and it is. Not the biggest drop ever in terms of percentage. You have to realize the Dow reached a new high just last week. 

I had reported yesterday before market open a weakness in the market. 

A market correction is 10 percent and a bear market is considered when a market drops 20 percent from its high. We're only about 5 percent off the highs. 

The Dow would have to drop a total of nearly 2,700 points to reach correction level. Still have about 1,300 points to get to that level. The chart below shows we're not even as low as the market was on July 30 of this year. 

It's hard to say what will happen in the next few days. Right now (11 PM CDT) the futures market has leveled off at about 25,300, so it seems for now the selling has stopped. Same with the SP500 and NASDAQ.  Will have see what happens early tomorrow. 

The drop in equities looks like investors moving into safer assets, like money markets, etc. Gold was up some, but has also leveled off in the futures markets. And that same money may move back into the market. Time will tell. 

Professional investors will look for buying opportunities if this proves to be just a small move downward. 

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