Why Did the Market Plunge?

Unless you've been on vacation for the past 3 months, then you're aware that U.S. stocks suffered a major market plung in the fall of 2018.   As we close out this year, it's a good time to reflect on what happened and what actions you can take.

To start things off, here's a link to an article in the Washington Post.  The article talks about the market plunge.  It covers "10 simple questions about the stock market plunge".

Click here to read the article from the Washington Post.

For those of us who use chart analysis, the handwriting was on the wall several months ago.  Here's a daily chart of the S&P-500:

The purple "cloud" on the chart is one of my own indicators.  It's a combination of indicators and you can see how price moved below that cloud around October 1st and, for the most part, has struggled to move back above it.  You'll also notice a green box that showed our recent market bounce.  That box is based on some Fibonacci math that I won't go into right now.

This chart, plus other tools I use to navigate and interpret the market, led me recommend many stocks as shorts during this period.  The old saying "the trend is your friend" is true.  But first you have to know the trend.  And, if you get caught on the wrong side of a market plunge, like the one we're seeing now, then it can be very expensive as your stock holdings lose value over time.

One way to keep abreast of the market is to subscribe to services by various analysts.  Find someone you trust and try their services.  You might enjoy becoming a more active investor and using some of your own equity for making personal trading choices.  I have such a service (of course) if you're interested.  it's called "Bears & Bulls".  If you're interested in seeing a short 12-minute video about that service, then just click here.

I hope you've enjoyed this brief discussion about the U.S. market plunge.  On this web site, you'll find plenty of free articles about trading.  For example, just look to your left and click on the "Stock Trading Articles" for a partial list.