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The 1-Minute Market Report - March 6, 2020

Erik Conley profile picture
Erik Conley


  • The 11-year bull market that began on March 9, 2009, had, up until then, been a dip-buyer's paradise. Not any more.
  • On February 19th, the ground shifted and the rally-sellers took control of the stock market.
  • This market could send the dip buyers on a painful ride just as it did in 2007-2009.

What happened last week, and what it may mean for the market in 2020.

Requiem for a Dip-Buyer

That clip from Animal House captures the level of panic we're experiencing with the ever-spreading COVID-19 virus. Up until February 19th, dip-buyers believed that all was well. The 11-year bull market that began on March 9, 2009, had, up until then, been a dip-buyer's paradise. Not any more.

On February 19th, the ground shifted and the rally-sellers took control of the stock market. There has been so much damage done to the dip-buyers, to companies that depend on travel & entertainment, and to the global economy that it could take several quarters, if not years, for things to return to normal.

Chart 1. The most recent market action

This chart (Fidelity) covers the most recent month for the S&P 500 index. A couple of things to note.

  • On the left side of the chart, as the market was making new highs, volume was relatively low.

  • The daily swings from high to low were relatively small.

  • After the last new high (the 5th green bar), things began to go south in a hurry. The wheels came off.

  • Note the increasing volume on down days, and weaker volume on up days. A lack of buying conviction.

  • Fridays are notably more weak than other days, indicating reluctance to hold stocks over the weekend.

  • There have been only 4 up days in the last 15. Normally there are 9.

  • Conclusion: there has been a seismic shift in the market, with rally-sellers now in control.

Chart 2. Percent of stocks above their 200-Day Moving Average

For the rest of the charts, I will use StockCharts.com. I don't think this chart needs much explanation. We're approaching the level last seen in December 2018. The market was down by 19.9% at

This article was written by

Erik Conley profile picture
Trader, analyst & portfolio manager, from 1975 - 2001. Former head of equity trading at Northern Trust Co. in Chicago. Now a private investor, founder of a nonprofit investor advocacy firm, and private investing coach. It gives me great satisfaction to teach retail investors the same skills and strategies that I used with my high net worth clients as a private wealth manager. It may be a cliche, but giving something back to the community is more rewarding to me than helping very rich people get even richer.

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Comments (18)

Orewash profile picture
The unique feature of this crisis is over dominance of ETF. Their liquidation sales will be bringing down all the market, not only the deadwood.
TonyValdez profile picture
I too am 100% confident a recession is coming. Just not this year. The economy was solid and this will pass. On a positive note, activity is already picking up in China and the impact is not expected to be long-term. Some good stocks on my watch list are looking attractive and I continue to buy more shares every two weeks for a good cost basis. I am not in the same place as others so riding this 11 year bull market and buying more shares on sale is kind of fun. Wishing everyone the best.
JGC67 profile picture

A full recession or just bear market?
Erik Conley profile picture
Tony, this requiem was written for you.
Orewash profile picture
read about an anchor effect. if you saw $320 for apple first than 299 is not necessarily a good price
Ronald Dwyer profile picture
Chart 2 gives a buy signal.

When the percent of stocks above their 200-Day Moving Average is below 30 percent, it was a very good time to buy. Have to wait at least six months for nice returns though.
Erik Conley profile picture
Requiem for another dip-buyer.
JGC67 profile picture
Erik Conley - "willing to step in and buy any time the market has the slightest hiccup. They don't wait for a 10% correction"

I'm alright buying on shorter dips in a long bull market, however, not any time there's a hiccup. Only if the price I want is reached and it's a really great company. i.e. Dividend Aristocrat

If we get a longer correction or a bear market, I keep cash in reserve for that too. It's the best plan for me, since I can't time the market.
Erik Conley profile picture
Requiem for yet another dip-buyer.
Buyandhold 2012 profile picture
"This market could send the dip buyers on a painful ride just as it did in 2007-2009."

Your words to God's ears.


Not painful at all.

What would be painful about a big sale in the stock market?

It would be sheer bliss.

Remember the good old days back in 2009 when stock prices were cheap?

Adjusted for dividends and splits, take a look at these 2009 stock prices compared to what they are now.

Apple: $11.07......now $288.95

Lululemon: $2.86.....now $218.55

Microsoft: $12.39.....now $161.57

Adobe: $16.70......now $336.77

Netflix: $5.16.....now $368.97

Sherwin Williams: $39.53....now $541.00

Roper: $38.41.....now $350.33

If I could pick up those 7 stocks at the prices they were back in 2009, I would sing:

"Happy days are here again
The skies above are clear again
Let us sing a song of cheer again
Happy days are here again."
Nick Ackerman profile picture
Yes, definitely agree with you here!
Grisby profile picture
Thee Fed has run out of ammunition to support these types of gains again.
Erik Conley profile picture
Exxon Mobil: $47.73... now $47.69
Sears: $34.50... now $0.20
Gamestop: $18.70... now $3.92
JC Penney: $18.37... now $0.60
GM: $28.20... now $28.69

Which stocks did you buy in 2009?
Grisby profile picture
The dip buying paradigm has become so ingrained that losses will likely be massive.
Djreef1966 profile picture
The suckers have to be flushed out, as always.
Erik Conley profile picture
Finally, somebody gets it.
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