Subject: Re: Spy down another 4 percent,
"I'm not Jim, but this has the earmarks of a correction and not the beginning of a bear market."

Can it not be both? Starts with the correction, ends with the bear market for a long time. Posted 04/07/2025 11:41 PM


No, not generally.

A bull market ends when there are no more buyers remaining. For the first 1/3 of the bear there are only people gradually selling.

A sharp drop is people selling in a panic. That's trading on emotion, and emotions are fickle so they can turn on a dime and buy again almost as quickly.

I am writing this on 4/8/25, 30 minutes after market open.
Headlines from finance-yahoo:
* Dow jumps over 1,000 points as stocks make bid for rebound
* Nvidia leads Magnificent 7 rebound
* S&P 500 opens 3.4% higher
* Dow 30 +1300 (+3.4%)
* Nasdaq +619 (+3.97%)
* BRK-B +21.57 (+4.3%)
* QQQ +17.14 (+4.05%)

This is emotional buying.


"Trump has just reduced the future earnings of every single company in the world."

Here's another thing: In stock market news, the reasons that the talking heads give for a market move are almost always wrong and have no bearing. The fact of the move is right, but the reason is not.
post hoc ergo propter hoc

Addressing in reverse:
It was not a talking head, it was Jim (backed by good economic analysis) that I was paraphrasing.
Regardless of market moves, in the US economic reality as of today, tariffs = stagflation, regressive tax on consumption, dampened trade, dampened growth, very likely recession, possibility of depression.
The emotional buying stopped and reversed today. Buying has faded.
Regardless, as mentioned previously, bear markets can have violent brief rallies as people buy on the dip and the shorts cover. One swallow does not a summer make, but a severe drought of foreign-made goods will.