Stocks Fall Sharply On October 4 As Fundamental Shifts Begin To Take Shape

Stock market virus fear or bull and bear economic crisis and sick financial health as a business recession concept or metaphor for uncertainty in the economy investing sentiment in a 3D illustration style. 

S&P 500 (SPX)

Stocks finished the day lower, with S&P 500 down about 1.3% and the Qs down about 2.1%. It is hard to say that sell-off is picking up steam yet, despite being down almost 5.5% from its highs. Given the size of the advance over the past year and a half, a 5.5% drop is not a big deal. The S&P 500 is now about 4% from its 200-day moving, a level that many people will watch but offers little if any support on a historical basis. The S&P 500 has generally cut right through the 200-day moving average during actual periods of market worry such as 2015/16, 2018, and 2020.

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Now the 200-week moving average is a different story, with it only failing meaningful during the 2008 meltdown and the 2020 covid meltdown. But if we are heading to the 200-week moving average, we have merely brushed the decline’s surface because that average is somewhere around 3,200.

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There are fundamental reasons for the recent decline in the market; this isn’t a technical adjustment being made. There are multiple issues with this market, such as high valuation, a Fed that is due to become less friendly, slowing GDP growth, slowing earnings growth, and the potential for a disappointing earnings season. Not to mention the index isn’t even oversold yet, so there is a good chance we see 4,240 in the coming days. Once we fell below 4,306 today, the index was unable to rise back above it. I go through all of the fundamental shifts in the video below.

Video Length: 00:10:13