Market Turbulence – Flash Update

From: Taber Kosmala

#1 This is Normal
We a re in the midst of the third 10% correction of this bull market. This is a normal occurrence. In fact, on average over the past 100 years, 10% corrections happen every 14 – 15 months; however, 10% down in 4 days is unusual. 10% down moves in just 4 days has happened 9 times in the past 80 years. In all but one instance, a retest or lower move occurred subsequent to the rapid decline. The table and chart below capture both patterns. Gap low, bounce, retest, stimulus, and then higher 3, 6 and 12 months out as panic/algorithmic/block selling subsides.

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