Stock Market Plunges
What To Do Now!

by Ian Harvey

October 11, 2018

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Both the Dow and S&P 500 posted their biggest one-day drops since early February, while the Nasdaq notched its largest single day sell-off since June 24, 2016.

The Dow Jones Industrial Average closed 831.83 points lower at 25,598.74 as Intel and Microsoft fell more than 3.5 percent each. The Nasdaq Composite plummeted 4 percent to 7,422.05 as Amazon and chip stocks declined. It was the worst for the Dow and S&P since February.

The S&P 500 dropped 3.3 percent to 2,785.68, with the tech sector underperforming. The broad index also posted a five-day losing streak — its longest since November 2016 — and fell below its 50-day and 100-day moving averages, widely followed technical levels.

There are several reasons causing investor panic…..

  • Rising rate fears
  • A move out of technology stocks
  • Ongoing concerns about the stronger dollar and trade are being input into corporate guidance
  • Assumptions that NAFTA 2.0 was completed but the China tariff situation worsened more than expected.
  • Hurricane Michael made investors become concerned that this would cause an upset to the economy.

HANG IN THERE!

DON’T PANIC!

In any of these situations where the stock market crashes, dips and blips, it’s important for investors and traders to maintain perspective! Even though a drop of more than 800-points looks scary seems like the end-of-the-world, such declines are becoming more common, because the Dow itself has risen to record highs of nearly 27,000.

There is no bear market; as yesterday’s drop doesn’t come close to ranking as a market crash or even an official 5% correction. Even after Wednesday’s bloodbath, the Dow is up 3.6% this year; the S&P 500 is up 4.2%, and the Nasdaq has risen more than 7.5%.

The fundamental environment remains supportive of share appreciation. The concerns of rising interest rates are largely overblown. Much more of an increase in longer dated Treasury yields is not anticipated.

THE BULL MARKET CONTINUES!

Take advantage of what the market has to offer today.

Stock Options Made Easy memberships are here to help you ride the wave higher and profit from the market volatility!


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


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