{"id":8515,"date":"2018-02-16T07:30:50","date_gmt":"2018-02-16T12:30:50","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=8515"},"modified":"2018-02-16T07:30:50","modified_gmt":"2018-02-16T12:30:50","slug":"the-stock-markets-next-move-3","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-stock-markets-next-move-3\/","title":{"rendered":"The Stock Market\u2019s Next Move"},"content":{"rendered":"

When the market was in the midst of a vicious selloff last week, I commented to my Delta Report<\/em> subscribers that the technical conditions had reached oversold levels that had only occurred (to my recollection anyway) two previous times in my 35-year career in the markets. Once was after the crash in 1987. The other time was in August 2011.<\/p>\n

It makes sense, therefore, to go back and take a look at the market action following each of those previous two events in order to get an idea of what we may be in for this time around.<\/p>\n

Take a look at this chart of the S&P 500 from 1987\u2026<\/p>\n

\"\"<\/p>\n

The S&P 500 collapsed 95 points during the 1987 crash. It took a couple of days for the market to claw its way higher and recover about 30% of the points lost.<\/p>\n

Then the S&P fell back to retest its low. That retest was followed by another rally attempt that recovered 30% of the lost points. But the real bottom of the market didn\u2019t happen until about six weeks later when the S&P made a slightly lower low.<\/p>\n

Now, here\u2019s the chart of the S&P 500 for 2011\u2026<\/p>\n

<\/p>\n

This time, the S&P 500 collapsed 220 points. It took about six days for a bounce to take hold and recover 30% of the points lost. Then, the market sold off and retested the lows. That retest was followed by an even stronger bounce attempt which recovered almost 50% of the decline. But the final bottom didn\u2019t occur until early October \u2013 two months after the initial collapse. That\u2019s when the S&P 500 made a slightly lower low.<\/p>\n

The Volatility Index (VIX) stayed elevated during that entire two-month period in 2011. And, if my memory serves, the 1987 version of the VIX (which was structured differently back then) stayed quite elevated as well.<\/p>\n

If we use these two examples as roadmaps, then we\u2019re likely in for a six- to eight-week period of sustained volatility. The S&P 500 should retest last Thursday\u2019s closing low (2581) a couple of times. And we should get some significant bounce attempts off of those retests.<\/p>\n

As of mid-day yesterday, the S&P 500 had recovered about 50% of its decline. If history is any sort of a guide, then we\u2019re pretty darn close to the end of this bounce.<\/p>\n

Next week could be a bit rough.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

What do you see ahead for the stock market? Are you taking advantage of the correction or steering clear?<\/p>\n

As always, feel free to send in your trading stories, questions, and suggestions right here<\/a>\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Let\u2019s look at the last two times the market made a move like this\u2026<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-8515","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/8515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=8515"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/8515\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=8515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=8515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=8515"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=8515"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=8515"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=8515"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=8515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}