Dow Jones Just Did Something Unseen Since 2008… And It’s Not Good

  • The Dow Jones wiped out a 900 point gain and closed lower on Tuesday, a whopping intraday reversal not seen since the 2008 crisis.
  • The recent ‘relief rally’ is fading as the focus shifts to dire economic data and corporate earnings this month.
  • Health experts say we may have to impose lockdowns again in December if the coronavirus comes back.

The U.S. stock market is battling rollercoaster levels of volatility. Yesterday, the Dow Jones Industrial Average (DJIA) made a round-trip of almost 2,000 points – something it hasn’t done since the 2008 financial crisis.

The Dow Jones soared almost 900 points at yesterdays open, before wiping out the entire day’s gains to close 963 points lower than its intraday high. | Source: TradingView.

The wild volatility suggests we may not have carved out the bottom of this rout yet. When this last happened in October 2008, the stock market was still five months from its lowest trough. Instead, the recent bounce is likely just a ‘bear market rally’ according to JP Morgan analysts.

There is reason to be cautious as this looked to be a relief rally ahead of next week’s start of Q1 earning season and before data reveals the depth of the virus impact.

The long-term reality of living in a world with coronavirus is beginning to set in on Wall Street. In one particularly dire warning, Dr. Janis Orlowski, chief health care officer of the Association of American Medical Colleges, said this morning we should prepare for more lockdowns at the end of the year.

We have to prepare ourselves to go through a similar exercise in the fall, in the late fall.

Dow swings higher after Tuesday’s wild ride

The Dow Jones opened with a bang, rising more than 300 points despite suffering a mixed futures session. The delay of the European stimulus had a negative effect in the early hours, but the index later recovered.

As of 9:46 am ET, the Dow had gained 311.08 points or 1.37% to trade at 22,964.94.

The Dow opened to triple-digit gains after…

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