Investors will start to realize the economy is not recovering in August, I said. As result, the stock market will break sometime in August or September, I said. It will likely experience an even bigger plunge as an October surprise, I said, because something about October loves a Halloweenish surprise for stocks.
The bull gets ripped to shreds
The post-COVID market put in its last peak right as we shifted from August into September. September was recognized as a generally bad month for stocks. Stocks took another plunge in October, diving almost 2,000 points on the Dow in the final week, making October an even worse month for stocks than September was. Two months in a row of back-to-back declines.
While October’s surprise did not run as deep or surprising as I was thinking we’d see, it nevertheless was enough to break a few records.
Zero Hedge referred to it as “Shocktober,” claiming stocks had experienced their worst pre-election plunge in history. It was also their worst drop since the horrendous March 2020 crash where one had to look back to events like 1929 to find a crash that went deeper though not steeper.
September and October experienced week after week of drawdowns. The few good weeks in the mix were not enough to offset the much worse bad weeks.