Analyzing The Market Correction
The Standard & Poor’s 500 index fell into correction territory on October 26 by dropping more than 10% from its all-time high five weeks earlier.
Looking at the last six decades of modern history shows that recessions triggered bear markets, but not every recession was accompanied by a bear market..
Bear-market drops of 20% or more occurred during economic expansions, but most bear markets coincided with recessions.
Corrections of 10%, or even 15%, on swings in investor sentiment are not uncommon during bull markets.
The current bull market was marked by four corrections before the most recent one.
What caused it? Earnings expectations.
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