Wall Street Has Not Been This Wrong Since 2008

Wall Street was once again, predictably, caught completely by surprise and off guard by the ongoing plunge in the market.

The chart below shows the point delta between the average sell-side consensus S&P500 forecast and the actual level of the S&P500. Clearly, the Delta has never been greater.

(Click on image to enlarge)

Of course, with the S&P well in the 2,000 point range, the point difference reflects the absolute (high, for now) level of the S&P500.

What about on a ratio basis? Well, here too the delta has exploded in recent weeks, although it is still just shy of the record spread achieved during the financial crisis.

(Click on image to enlarge)

What does this mean? Absent a sharp and quick rebound in the coming weeks, expect Wall Street, which only recently came out with their euphoric 2019 market forecasts, to admit they were all wrong and to start slashing their forecasts for the coming year, adding even more downside pressure as plain vanilla funds no longer have sell-side analysts target to hide behind.