Buy-the-Dip Traders Vanish When Needed Most to Shore Up Market
(Bloomberg) -- Equity bears have ripped the upper hand away from bulls as the S&P 500 Index tumbles toward its worst week since the February swoon, at least going by one measure.
Down 1.3 percent to 2,609 at 3:19 p.m. in New York, the S&P 500 was on course to finish below the midpoint of its intraday range for a 10th straight session. That would be an unprecedented streak of weakness, according to Bloomberg data that goes back to 1982.
While hardly a death knell for the nine-year bull market, the data signals a shift in the prevailing mentality among investors. For years, every dip in the S&P 500 was met with torrid buying that pushed the index back to fresh highs in no time. For the past 10 days at least, sell-the-rally’s taken hold.
It’s not hard to see why, with headlines bringing a barrage of jitter-inducing news, from escalating trade tensions to a potential acceleration in rate hikes and deep trouble in the once rock-solid tech sector.
The tendency to close below the session midpoint also has made bears the winner of a three-week battle over the market’s direction following the rapid snap-back from February’s swoon. The compressed trading band over that period has been broken, with the S&P 500 down almost 7 percent as it fell in eight of the past 10 days.
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