For the second day in a row, stocks collapsed into the close on extremely broad and systematic selling.
Although breadth wasn't as bad and new lows did not expand, it was a very discouraging action after a strong start. For a while this morning, it looked like a powerful oversold bounce was building, but stocks were starting to roll over at midday, and the selling picked up steam all afternoon.
There was some relative strength in a few places like growth stocks (as seen in the ARK Innovation fund (ARKK) ), but in many cases, the bounce not only failed, but Wednesday's lows were undercut. Biotechnology (as seen in the iShares Biotechnology (IBB) ) and small caps (in the Russell 2000 fund (IWM) ) were good examples, as both hit new 12-month closing lows.
Although this action is about as bad as it gets, the indexes still have not met the definition of a bear market, which is a drop of 20% from highs. The business media is hung up on that meaningless metric, and, as a result, they fail to report on how poor this market has been for so long. This is already a bear market regardless of what the indices might be doing, and anyone that actively trades is well aware of that fact.
The good news is that the corrective process continues to progress. We have no choice but to let it play out. The faster it happens, the faster we will move to a "good" low and start the next cycle.
This is some of the worst market action you will ever experience, and there is no way to know how much longer it may last, but if you keep some cash ready, you will be in a great position to eventually profit.
Have a good evening. I'll see you tomorrow.