The rapid plunge is raising alarm bells on Main Street too, with worries that the US economy may be losing steam following a strong recovery from the depths of the brief pandemic-induced recession.
According to data from research firm Bespoke Investment Group, the Nasdaq has plummeted more than 20% in the past 30 trading days. A drop of that magnitude has only happened 11 times before… and nine of those declines were “associated with recessions,” according to Bespoke.
Bespoke analysts said in another report earlier this week that the Nasdaq 100, or so-called QQQs, is off to the worst start for any year, ever.
Still, there are hopes that a bottom may soon be in sight. Bespoke analysts said that “prices can remain oversold … for an extended period of time, but they don’t stay that way forever.”
Investors are waiting for so-called capitulation, the moment where it seems like everyone has finally thrown in the proverbial towel. When sentiment is seemingly at its lowest, that might be time to finally start buying again.