Is The Stock Market Hurricane Over?

It sure feels like the seas have calmed and our first hurricane in over 10 years is over. However, before we "float all boats" going all in on this ocean, let's take a look at a these two key points from previous hurricanes:

1. Does being up 38% from the bottom, 2192 on March 23, 2020, mean that the hurricane is over?
  • As stated earlier, both previous hurricanes had multiple High Tide moves greater than 20%. The Tide we are either in or just ended is up 23%. This is right in line with 5 tides in the previous hurricanes that were up 22%, 23%, 24% (twice) and 25%.
2. Does being only down 10% since 3394, the start of the hurricane on February 28, 2020, mean that the hurricane is over?
  • At the current 3036 level, the S&P is down 10% since the start of the hurricane (98 days before today). The Great Recession was down only 9% at the 221 day mark and the Dot-Com Bubble was also down 11% on day 313.
Deciding when to sail (buy) is a challenge but hopefully history helps us manage our emotions and avoid unsustainable optimism. The winds (VIX) are still strong around 28 knots, patience is key.

Fair winds and following seas!

Trading Tide Levels (at the time of the post):
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This is for informational purposes only and the information provided does not encompass all possible or probable outcomes and nothing posted here is an indication of future results. Nothing in this blog is a guarantee or promise of future investment returns and investing in stocks or bonds carries risks including losing your entire investment. I do not recommend, advocate or endorse any third-party links, resources or advertisements of any kind. Any investment decisions are recommended to be in conjunction with a Certified Financial Planner, a comprehensive and personal financial plan and all other components that make up your own financial situation.


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